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Florida Life and Health Insurance Exam
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Florida Life and Health Insurance Exam
- The transfer of risk from one party to another through a legal contract.
Answer: Concept of insurance
- The larger the number of risks insured in the same risk pool; the more predictable losses
become.
Answer: Law of Large Numbers
- An immediate, specific event that causes a loss.
Answer: Peril
- An unintended, unforeseen reduction, or destruction of financial or economic value.
Answer: Loss
- Creates an increased possibility that a peril (a cause of a loss) will actually occur.
Answer: Hazard
- Is any event that causes a loss.
Answer: Occurrence
- Risk is defined as the potential or uncertainty for loss.
Answer: Risk
- A situation in which either profit or loss is possible, not insured.
Answer: Speculative risk
- Issues very small face amounts, such as $1,000 or $2,000. Premiums are paid weekly and
collected by debit agents. They were designed for burial coverage.
Answer: Industrial life insurance
- Life insurance of commercial companies not issued on the weekly premium basis. It is
made up of several types of individual life insurance, such as temporary (term), permanent (whole).
Answer: Ordinary life insurance
- Insurance written for members of a group, such as a place of employment, association, or a
union. Coverage is provided to the members of that group under one master contract. The group is underwritten as a whole, not on each individual member. One of the benefits of group life coverage is usually there is no evidence of insurability required.
Answer: Group life insurance
- Life insurance that pays a death benefit if the policyholder dies within a specific time
period but has no remaining value at the end of this time. 2 / 3
Answer: Term life insurance
- Sometimes called straight life insurance or ordinary life insurance; can provide lifetime
insurance coverage; in this case, fixed premiums are paid for life; pays interest on the cash value portion with a guaranteed minimum interest rate during life of the contract.
Answer: Whole life insurance
- Cover the lives of two individuals and saves on premium costs by averaging the ages of
the two insureds. Joint Life Survivor or Last Survivor policies only pay the death benefit upon the death of the last insured person. For example, say B and M purchase a joint life survivor policy. If B were to die first and then M died 10 years later, no benefits would be paid out from the policy until M died. A Joint Life and Survivor policy covers two lives but only pays benefits after the death of the last insured.
Answer: Joint survivor or last survivor life policies
- Pays a monthly income from the date of death of the insured to the end of the preselected
period.
Answer: Family maintenance policy
- Combines Whole Life insurance with a Decreasing Term Rider also written on the same
person.
Answer: Family income policy
- Whole life insurance policy, but you can change your policy as your needs change. You can
change your premium payments to increase or decrease coverage.
Answer: Adjustable life policy
- Incorporates flexible premiums and an adjustable death benefit. The in- vestment gains
from a Universal Life Policy usually go toward the cash value. The policy owner can use the cash value to manipulate the flexible aspects of a universal life insurance policy. A customer who wants a policy that gives them the most options and the most control would be looking for a Universal Life Policy. Universal policies use gains to fund the cash value and give the policy owner options for flexible premiums and adjustable death benefits.
Answer: Universal life insurance policy
- Life insurance in which the benefits are a function of the returns being generated on the
investments selected by the policyholder.
Answer: Variable Life Insurance
- Combines most of the features, benefits, and security of traditional life insurance with the
potential of earned interest based on the upward movement of an equity index.
Answer: Equity index universal life insurance
- The equity amount or "savings" accumulation in a whole life policy.
Answer: Cash value
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