©SIRJOEL EXAM SOLUTIONS 2024/2025
ALL RIGHTS RESERVED.
Florida 240 License Exam Questions And
Answers
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: - Answers✔Reserves
An insurance applicant MUST be informed of an investigation regarding his/her reputation and
character according to the: - Answers✔Fair 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: - Answers✔A fraternal benefit society
What I the name of the law that requires insurers to disclose information gathering practices
and where the information was obtained? - Answers✔Fair Credit Reporting Act
Who elects the governing body of a mutual insurance company? - Answers✔Policyholders
A group-owned insurance company that is formed to assume and spread the liability ricks of its
members is known as a: - Answers✔Risk retention group
What type of reinsurance contract involves two companies automatically sharing their risk
exposure? - Answers✔treaty
1|Page
, ©SIRJOEL EXAM SOLUTIONS 2024/2025
ALL RIGHTS RESERVED.
What year was the McCarran-Ferguson Act enacted? - Answers✔1945
Which of these describe a participating life insurance policy? - Answers✔Policy 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? - Answers✔Upon completion of the application
Which of the following requires insurers to disclose when an applicant's consumer or credit
history is being investigated: - Answers✔1970 - Fair Credit Reporting Act
What type of reinsurance contract involves two companies automatically sharing their risk
exposure? - Answers✔Treaty
A group-owned insurance company that is formed to assume and spread the liability risks of its
members is known as a: - Answers✔risk retention group
All of the following are considered to be typical characteristics describing the nature of an
insurance contract, EXCEPT: - Answers✔Bilateral
The part of a life insurance policy guaranteed to be true is called a(n) - Answers✔warranty
Statements made on an insurance application that are believed to be true to the best of the
applicant's knowledge are called - Answers✔representations
2|Page
, ©SIRJOEL EXAM SOLUTIONS 2024/2025
ALL RIGHTS RESERVED.
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? - Answers✔Aleatory
When must insurable interest be present in order for a life insurance policy to be valid? -
Answers✔When the application is made
A life insurance arrangement which circumvents insurable interest statutes is called: -
Answers✔Investor-Originated Life Insurance
Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the
following contractual elements? - Answers✔Legal Purpose (Insurable Interest)
Who makes the legally enforceable promises in a unilateral contract? - Answers✔Insurance
company
A policy of adhesion can only be modified by whom? - Answers✔insurance company
When third-party ownership is involved, applicants who also happen to be the stated primary
beneficiary are required to have: - Answers✔insurable interest in the proposed insured
Which of these is considered a statement that is assured to be true in every aspect? -
Answers✔Warranty
Which of these require an offer, acceptance, and consideration? - Answers✔contract
3|Page
, ©SIRJOEL EXAM SOLUTIONS 2024/2025
ALL RIGHTS RESERVED.
If a contract of adhesion contains complicated language, to whom would the interpretation be
in favor of? - Answers✔insured
Insurance contracts are known as _____ because certain future conditions or acts must occur
before any claims can be paid. - Answers✔conditional
Insurance policies are offered on a "take it or leave it" basis, which make them: -
Answers✔Contracts of Adhesion
In regards to representations or warranties, which of these statements is TRUE? - Answers✔If
material to the risk, false representations will void a policy
Which of these arrangements allows one to bypass insurable interest laws? -
Answers✔Investor-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? - Answers✔unilateral
Which of these is NOT a type of agent authority? - Answers✔principal
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? - Answers✔In this situation, the
proceeds from E's life insurance policy will go to F.
4|Page
ALL RIGHTS RESERVED.
Florida 240 License Exam Questions And
Answers
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: - Answers✔Reserves
An insurance applicant MUST be informed of an investigation regarding his/her reputation and
character according to the: - Answers✔Fair 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: - Answers✔A fraternal benefit society
What I the name of the law that requires insurers to disclose information gathering practices
and where the information was obtained? - Answers✔Fair Credit Reporting Act
Who elects the governing body of a mutual insurance company? - Answers✔Policyholders
A group-owned insurance company that is formed to assume and spread the liability ricks of its
members is known as a: - Answers✔Risk retention group
What type of reinsurance contract involves two companies automatically sharing their risk
exposure? - Answers✔treaty
1|Page
, ©SIRJOEL EXAM SOLUTIONS 2024/2025
ALL RIGHTS RESERVED.
What year was the McCarran-Ferguson Act enacted? - Answers✔1945
Which of these describe a participating life insurance policy? - Answers✔Policy 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? - Answers✔Upon completion of the application
Which of the following requires insurers to disclose when an applicant's consumer or credit
history is being investigated: - Answers✔1970 - Fair Credit Reporting Act
What type of reinsurance contract involves two companies automatically sharing their risk
exposure? - Answers✔Treaty
A group-owned insurance company that is formed to assume and spread the liability risks of its
members is known as a: - Answers✔risk retention group
All of the following are considered to be typical characteristics describing the nature of an
insurance contract, EXCEPT: - Answers✔Bilateral
The part of a life insurance policy guaranteed to be true is called a(n) - Answers✔warranty
Statements made on an insurance application that are believed to be true to the best of the
applicant's knowledge are called - Answers✔representations
2|Page
, ©SIRJOEL EXAM SOLUTIONS 2024/2025
ALL RIGHTS RESERVED.
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? - Answers✔Aleatory
When must insurable interest be present in order for a life insurance policy to be valid? -
Answers✔When the application is made
A life insurance arrangement which circumvents insurable interest statutes is called: -
Answers✔Investor-Originated Life Insurance
Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the
following contractual elements? - Answers✔Legal Purpose (Insurable Interest)
Who makes the legally enforceable promises in a unilateral contract? - Answers✔Insurance
company
A policy of adhesion can only be modified by whom? - Answers✔insurance company
When third-party ownership is involved, applicants who also happen to be the stated primary
beneficiary are required to have: - Answers✔insurable interest in the proposed insured
Which of these is considered a statement that is assured to be true in every aspect? -
Answers✔Warranty
Which of these require an offer, acceptance, and consideration? - Answers✔contract
3|Page
, ©SIRJOEL EXAM SOLUTIONS 2024/2025
ALL RIGHTS RESERVED.
If a contract of adhesion contains complicated language, to whom would the interpretation be
in favor of? - Answers✔insured
Insurance contracts are known as _____ because certain future conditions or acts must occur
before any claims can be paid. - Answers✔conditional
Insurance policies are offered on a "take it or leave it" basis, which make them: -
Answers✔Contracts of Adhesion
In regards to representations or warranties, which of these statements is TRUE? - Answers✔If
material to the risk, false representations will void a policy
Which of these arrangements allows one to bypass insurable interest laws? -
Answers✔Investor-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? - Answers✔unilateral
Which of these is NOT a type of agent authority? - Answers✔principal
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? - Answers✔In this situation, the
proceeds from E's life insurance policy will go to F.
4|Page
