FLORIDA 240 LICENSE EXAM LATEST
COMPLETE ACTUAL EXAM REAL QUESTIONS AND
WELL ELABORATED ANSWERS (CORRECT
VERIFIED ANSWERS) LATEST UPDATED VERSION
|ALREADY GRADED A+ (FULL REVISED EXAM)
The stated amount or percent of liquid assets that an insurer must have on hand that
will satisfy future obligations to its policyholders is called: - ANSWERReserves
An insurance applicant MUST be informed of an investigation regarding his/her
reputation and character according to the: - ANSWERFair Credit Reporting Act
A nonprofit incorporated society that does not have capital stock and operates for the
sole benefit of its members is known as: - ANSWERA fraternal benefit society
What I the name of the law that requires insurers to disclose information gathering
practices and where the information was obtained? - ANSWERFair Credit Reporting Act
Who elects the governing body of a mutual insurance company? -
ANSWERPolicyholders
A group-owned insurance company that is formed to assume and spread the liability
ricks of its members is known as a: - ANSWERRisk retention group
What type of reinsurance contract involves two companies automatically sharing their
risk exposure? - ANSWERtreaty
What year was the McCarran-Ferguson Act enacted? - ANSWER1945
Which of these describe a participating life insurance policy? - ANSWERPolicy owners
are entitled to receive dividends
At what point must a life insurance applicant be informed of their rights that fall under
the Fair Credit Reporting Act? - ANSWERUpon completion of the application
Which of the following requires insurers to disclose when an applicant's consumer or
credit history is being investigated: - ANSWER1970 - Fair Credit Reporting Act
,What type of reinsurance contract involves two companies automatically sharing their
risk exposure? - ANSWERTreaty
A group-owned insurance company that is formed to assume and spread the liability
risks of its members is known as a: - ANSWERrisk retention group
All of the following are considered to be typical characteristics describing the nature of
an insurance contract, EXCEPT: - ANSWERBilateral
The part of a life insurance policy guaranteed to be true is called a(n) -
ANSWERwarranty
Statements made on an insurance application that are believed to be true to the best of
the applicant's knowledge are called - ANSWERrepresentations
Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first
six months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of
unequal values reflects which of the following insurance contract features? -
ANSWERAleatory
When must insurable interest be present in order for a life insurance policy to be valid? -
ANSWERWhen the application is made
A life insurance arrangement which circumvents insurable interest statutes is called: -
ANSWERInvestor-Originated Life Insurance
Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of
the following contractual elements? - ANSWERLegal Purpose (Insurable Interest)
Who makes the legally enforceable promises in a unilateral contract? -
ANSWERInsurance company
A policy of adhesion can only be modified by whom? - ANSWERinsurance company
When third-party ownership is involved, applicants who also happen to be the stated
primary beneficiary are required to have: - ANSWERinsurable interest in the proposed
insured
Which of these is considered a statement that is assured to be true in every aspect? -
ANSWERWarranty
Which of these require an offer, acceptance, and consideration? - ANSWERcontract
If a contract of adhesion contains complicated language, to whom would the
interpretation be in favor of? - ANSWERinsured
, Insurance contracts are known as _____ because certain future conditions or acts must
occur before any claims can be paid. - ANSWERconditional
Insurance policies are offered on a "take it or leave it" basis, which make them: -
ANSWERContracts of Adhesion
In regards to representations or warranties, which of these statements is TRUE? -
ANSWERIf material to the risk, false representations will void a policy
Which of these arrangements allows one to bypass insurable interest laws? -
ANSWERInvestor-Originated Life Insurance
In an insurance contract, the insurer is the only party who makes a legally enforceable
promise. What kind of contract is this? - ANSWERunilateral
Which of these is NOT a type of agent authority? - ANSWERprincipal
E and F are business partners. Each takes out a $500,000 life insurance policy on the
other, naming himself as primary beneficiary. E and F eventually terminate their
business, and four months later E dies. Although E was married with three children at
the time of death, the primary beneficiary is still F. However, an insurable interest no
longer exists. Where will the proceeds from E's life insurance policy be directed to? -
ANSWERIn this situation, the proceeds from E's life insurance policy will go to F.
When must insurable interest exist for a life insurance contract to be valid? -
ANSWERInception of the contract
Life and health insurance policies are: - ANSWERunilateral contracts
A policy of adhesion can only be modified by whom? - ANSWERinsurance company
At what point does an informal contract become binding? - ANSWERWhen one party
makes an offer and the other party accepts that offer
What is the consideration given by an insurer in the Consideration clause of a life
policy? - ANSWERPromise to pay a death benefit
What is the consideration given by an insurer in the Consideration clause of life policy? -
ANSWERPromise to pay a death benefit to a named beneficiary
Insurance policies are considered aleatory contracts because: - ANSWERperformance
is conditioned upon a future occurrence
Taking receipt of premiums and holding them for the insurance company is an example
of - ANSWERfiduciary responsibility
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