FLORIDA 2-15 INSURANCE LICENSE EXAM LATEST ACTUAL EXAM QUESTIONS AND CORRECT AND VERIFIED ANSWERS |AGRADE|NEW!!

FLORIDA 2-15 INSURANCE LICENSE EXAM LATEST ACTUAL EXAM QUESTIONS AND CORRECT AND VERIFIED ANSWERS |AGRADE|NEW!!
In the insurance business, risk can best be defined as:
A. sharing the possibility of a loss
B. uncertainty regarding the future
C. uncertainty regarding financial loss
D. uncertainty regarding when death will occur - ANSWER C. The concept of insurance
developed from the need to minimize the adverse effects of risk associated with the
probability of financial loss.
Which of the following risks is insurable?
A. pure risks
B. gambling
C. speculative risks
D. investing - ANSWER A. Only pure risks are insurable because they involve only the chance
of loss. They are pure in the sense that they do not mix both profits and losses. Insurance is
concerned with the economic problems created by pure risks.
Buying insurance is one of the most effective ways of
A. avoiding risk
B. transferring risk
C. reducing risk
D. retaining risk - ANSWER B. Buying insurance is one of the most effective ways of
transferring risk. Through the insurance contract, the burden of carrying the risk and
indemnifying the financial loss is transferred from the individual to the insurance company.
Which of the following best describes the function of insurance?
A. it is a form of legalized gambling.
B. it spreads financial risk over a large group to minimize the loss to any one individual
C. it protects against living too long
D. it creates and protects risks - ANSWER B. The function of insurance is to safeguard against
financial loss by having the losses of few paid by the contributions of many who are exposed
to the same risk.
All of the following are elements of an insurable risk EXCEPT
A. the loss must be due to chance
B. the loss must be predictable
C. the loss must be catastrophic
D. the loss must have a determinable value - ANSWER C. One of the criteria for an insurable
risk is that it NOT be catastrophic. A principle of insurance holds that only a small portion of a
given group will experience loss at any one time. Risks that would adversely affect large
numbers of people or large amounts of property - wars or floods, for example - are typically
not insurable.
The amount of money an insurer sets aside to pay future claims is called
A. a premium
B. a reserve
C. a dividend
D. an accumulated interest - ANSWER B. Reserves can be defined as the amounts that are
set aside to fulfill the insurance company's obligation to pay future claims. The reserve is
compiled from past premium payments and interest.
Which of the following constitutes an insurable interest?
A. the policyowner must expect to benefit from the insured's death
B. the policyowner must expect to suffer a loss when the insured dies or becomes disabled
C. the beneficiary, by definition, has an insurable interest in the insured
D. 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. a written contract cannot be changed once it is signed
B. an oral contract cannot be modified by written evidence
C. a written contract cannot be changed by oral evidence
D. 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.
Which of the following factors determines whether policy dividends will be paid on a
participating policy?
A. reserves and experience
B. expenses and claims costs
C. interest and benefits
D. 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
A. the insurer
B. the applicant/insured
C. the state insurance department
D. 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.

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