FLORIDA 2 15 EXAM PREP COMPLETE
QUESTIONS AND VERIFIED ANSWERS
◉ 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. 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. 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. 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: 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. 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. 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: 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. 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
QUESTIONS AND VERIFIED ANSWERS
◉ 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. 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. 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. 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: 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. 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. 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: 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. 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
