FLORIDA 2-15 INSURANCE LICENSE EXAM LATEST 2023-2024 REAL EXAM 200 QUESTIONS AND CORRECT ANSWERS WITH RATIONALES |AGRADE

FLORIDA 2-15 INSURANCE LICENSE EXAM LATEST 2023-

2024 REAL EXAM 200 QUESTIONS AND CORRECT ANSWERS

WITH RATIONALES |AGRADE

On August 9, Albert made an application for life insurance that his agent submitted

a day later without a premium payment. On August 21, the insurer issued the

policy as applied for and on August 24, the agent delivered the policy and collected

the initial premium. On what day was the contract offer made?

A. August 9

B. August 10

C. August 21

D. August 24 - ANSWER- C. Rationale:If an applicant does not submit an initial

premium with the application, the applicant is inviting the insurance company to

make a contract offer. The insurer can respond by issuing a policy (the offer) that

the applicant can accept by paying the premium when the policy is delivered.

All statements made by an applicant in an application for life insurance are

considered to be

A. warranties

B. affirmations

C. representations

D. declarations - ANSWER- C. Rationale:Most states require that life insurance

policies contain a provision that all statements made in application be deemed

representation not warranties. A representation is a statement made by the

applicant that the applicant believes to be true. A warranty is a statement made by

the applicant that is guaranteed to be true. If an insurance company rejects a claim

on the basis of a representation, the company bears the burden of proving

materiality.

Which of the following legal terms indicates that a life insurance contract contains

the enforceable promises of only one party?

A. adhesion

B. unilateral

C. conditional

D. aleatory - ANSWER- B. Rationale:Insurance contracts are unilateral in that only

one party - the insurer - makes any kind of enforceable promise.

Which of the following types of agent authority is specifically set forth in writing

in the agent's contract?

A. express

B. implied

C. apparent

D. personal - ANSWER- A. Rationale:Express authority is the authority a principal

gives to its agent. Express authority is granted by means of the agent's contract,

which is the principal's appointment of the agent to act on its behalf.

Assume a home catches fire after it is struck by lightning and the fire destroys its

structure and contents. By insurance definition, the fire is

A. the risk

B. the hazard

C. the peril

D. the proximate cause - ANSWER- C. Rationale:A peril is the immediate specific

event causing loss and giving rise to risk. When a building burns, fire is the peril.

What constitutes "consideration" for a life insurance policy?

A. application and initial premium

B. agent's commission

C. adhesion feature of the contract

D. policy's benefits - ANSWER- A. Rationale:Consideration is the value given in

exchange for the promises sought. In an insurance contract, consideration is given

by the applicant in exchange for the insurer's promise to pay benefits, and it

consists of the application and the initial premium.

Statements made by an applicant for life insurance that are guaranteed to be true

are

A. warranties

B. material statements

C. representations

D. declarations - ANSWER- A. Rationale:A warranty in insurance is a statement

made by the applicant that is guaranteed to be true. It becomes part of the contract

and, if found to be untrue, can be grounds for revoking the contract. Warranties are

presumed to be material because they affect the insurer's decision to accept or

reject an applicant.

Which of the following insurance companies is owned by its policyholders?

A. service insurer

B. stock insurer

C. reinsurer

D. mutual insurer - ANSWER- D. Rationale:Mutual insurers are owned by the

policyholders. Anyone purchasing insurance from a mutual insurer is both a

customer and an owner.

With regard to life insurance, all of the following statements are correct EXCEPT

A. all individuals are considered to have insurable interests in themselves

B. spouses are automatically considered to have insurable interests in each other

C. a creditor has an insurable interest in a debtor

D. insurable interest must be maintained throughout the life of the contract -

ANSWER- D. Rationale:Insurable interest is required only when a contract is

issued; it does not have to be maintained throughout the life of the contract nor is it

necessary at the time of claim.

A life insurance company is organized in Orlando where it maintains its home

office. In Florida, the company is classified as

A. a domestic company

B. a local company

C. a foreign company

D. a preferred company - ANSWER- Rationale: A. An insurer is termed

"domestic" in a state when it is incorporated in that state.

A life insurance company organized in Illinois, with its home office in

Philadelphia, is licensed to conduct business in Wisconsin. In Wisconsin, this

company is classified as

A. a domestic company

B. an alien company

C. a foreign company

D. a regional company - ANSWER- C. Rationale:A foreign company operates

within a state in which it is not chartered and in which the home office is not

located.

To whom does the cash value of a life insurance policy belong?

A. policyowner

B. insured

C. insurer

D. beneficiary - ANSWER- A. Rationale:The accumulation that builds over the life

of a policy is called the "cash value," and it belongs to the policyowner, who may

or may not be the insured.

Frank is the insured in a $40,000, 5-year level term policy issued in 2003. He died

in 2009. His beneficiary received

A. nothing

B. $20,000

C. $40,000

D. the cash value of the policy - ANSWER- Rationale:A. In this case, the insured

died after his term policy had expired. As a result, his beneficiary received nothing.

All of the following statements regarding assignment of a life insurance policy are

correct EXCEPT

A. to secure a loan, the policy can be transferred temporarily to the lender as

security for the loan

B. the policyowner must obtain approval from the insurance company before a

policy can be assigned

C. the life insurance company assume no responsibility for the validity of an

assignment

D. the life insurance company must be notified in writing by the policyowner of

any new assignment - ANSWER- B. Rationale:Policyowners actually own their

policies and may do with them as they please. They can even give them away, just

as they can give away any other kind of property they own. Nevertheless, they

must notify the insurance company in writing of any transfers of ownership

(assignments). The company must then accept the validity of the assignments

without question.