FLORIDA 2-15 INSURANCE LICENSE EXAM LATEST

FLORIDA 2-15 INSURANCE LICENSE EXAM LATEST

300 QUESTIONS AND CORRECT

ANSWERS WITH RATIONALES AGRADE

Which of the following constitutes an insurable interest?

• the policyowner must expect to benefit from the insured's death
• the policyowner must expect to suffer a loss when the insured dies or becomes disabled
• the beneficiary, by definition, has an insurable interest in the insured
• the insured must have a personal or business relationship with the beneficiary - ANSWER>> B.

Insurable interest requires the policyowner to benefit from the insured's continuing to live or enjoy good health or to suffer a loss when the insured dies or is disabled.Which of the following statements describes the parol evidence rule?

• a written contract cannot be changed once it is signed
• an oral contract cannot be modified by written evidence
• a written contract cannot be changed by oral evidence
• an oral contract takes precedence over any earlier written contract - ANSWER>> C. The parol

evidence rule states that when parties put their agreement in writing, all previous verbal statements come together in that writing, and a written contract cannot be changed or modified by parol (oral) evidence. 1 / 4

Which of the following factors determines whether policy dividends will be paid on a participating policy?

• reserves and experience
• expenses and claims costs
• interest and benefits
• premiums and renewability - ANSWER>> B. If expenses and claims costs are less than expected,

dividends are likely to be paid.A licensed agent legally represents

• the insurer
• the applicant/insured
• the state insurance department
• himself or herself - ANSWER>> A. An agent is an individual who has been authorized by an

insurer to be its representative to the public and to offer for sale its goods and services.All of the following statements regarding policy replacement are correct EXCEPT

• replacement involves convincing a policyholder to lapse or terminate an existing policy and to

purchase another 2 / 4

• interrupting one cash value insurance plan to begin another could cause serious financial problems

for the policyowner

• even if the customer wants to replace his or her existing policy, an agent can effect a policy

replacement only by following the replacement regulations in the agent's state

• premiums for the replacement policies are generally lower than premiums for the existing policies

they replace - ANSWER>> D. The new policy will probably be at a higher premium rate because it will be based on the insured's then-attained age.With regard to insurable risks, which of the following statements is NOT correct?

• only pure risks are insurable
• an insurable risk must involve loss that is within the insured's control
• insurers will not insure risks that are catastrophic in nature
• an insurable risk must be measurable - ANSWER>> B. To be insurable, a risk must involve the

chance of loss that is fortuitous and outside the insured's control.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?

• August 9
• August 10 3 / 4

• August 21
• August 24 - ANSWER>> C. 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

• warranties
• affirmations
• representations
• declarations - ANSWER>> C. 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?

• adhesion
• unilateral
• conditional
• / 4