FLORIDA INSURANCE 2-14 EXAM (2025/2026)
LATEST |COMPLETE QUESTIONS AND VERIFIED
ANSWERS (GRADED A+) DETAILED ANSWERS!!
Insurance - (ANSWER)Financial protection against loss or harm - An arrangement
by which company gives customers financial protection against loss or harm such
as theft or illness in return for premium payments.
Life Insurance - (ANSWER)Is based on actuarial or mathematical principles and
guarantees a specified sum of money upon the death of the person who is
insured.
Annuities - (ANSWER)Provide a stream of income by making a series of payments
to the annuitant for the annuitant's lifetime or for a specifically designated period
of time.
Risk - (ANSWER)Uncertainty regarding loss; the probability of loss occurring for
an insured or prospect
Speculative Risks - (ANSWER)Involve the possibility of loss and gain. (Not
Insurable)
Pure Risks - (ANSWER)Involve the possibility of loss only. (Insurable)
Peril - (ANSWER)Cause of risk (when a building burns, fire is the peril)
,Hazards - (ANSWER)The source of danger
Physical Hazard - (ANSWER)A hazard being of physical nature.
A person being treated of cancer, the disease is the physical endangerment.
(Blindness & deafness)
Risk Avoidance - (ANSWER)Occurs when individuals evade risk entirely. "If you
don't drive, then you avoid getting in an auto accident."
Risk Reduction - (ANSWER)Takes place when the chances of loss are lessened.
Changing a lifestyle to minimize a known risk.
Risk Retention - (ANSWER)Being aware of the risks involved and taking
precautions for financial protection. Auto policy's deductible is an illustration of
risk retention
Risk Transference - (ANSWER)The act of shifting the responsibility of risk to
another in the form of an insurance contract.
Adverse Selection - (ANSWER)Refers to the tendency for those individuals who
present less favorable insurance risk to seek or continue insurance to a great
extent than other risks.
Insuring Pure Risk - (ANSWER)Loss must be due to chance
,Loss must be definite and measurable
Risk must be predictable
Loss must NOT be catastrophic
Exposure to loss must be large
Loss exposures must be randomly selected
Mutual Insurers - (ANSWER)Participating policies
Owned by policyholders
Vote for directors and trustees
Directors and management have control
Typically higher rates
Assessment Mutual Insurers - (ANSWER)Prohibited in Florida
Pure Assessment Mutual Company - (ANSWER)Don't pay premium and total loss
is divided among members
Lloyds of London - (ANSWER)NOT considered an insurance company
- An association of individuals and companies that individually underwriter
insurance.
Fraternal Benefit Societies - (ANSWER)Must be nonprofit, have a lodge system,
and offer insurance to its members only
, Home Service Insurer - (ANSWER)Insurer that offers relatively small policies with
premiums payable on a weekly basis.
Captive Agents - (ANSWER)A.k.a. Career agents
Works for only one insurer and sells only that insurers products
Independent Agents - (ANSWER)Is self-governing and actually works for himself.
This affords him the versatility to represent several insurers and their different
insurance products.
Special Agents - (ANSWER)Usually not license and don't sell insurance. Assist
insurance companies field representatives.
Career Agency System - (ANSWER)(GA) - Build sales staffs and agents are treated
as employees. They are recruited and trained. A principal of the company
supervises agents.
Personal Producing General Agency System - (ANSWER)(PPGA) - The agent
supplies his own working environment. Agents hired by a PPGA are considered
employees of the PPGA, not the insurance company, and are supervised by the
regional salary.
LATEST |COMPLETE QUESTIONS AND VERIFIED
ANSWERS (GRADED A+) DETAILED ANSWERS!!
Insurance - (ANSWER)Financial protection against loss or harm - An arrangement
by which company gives customers financial protection against loss or harm such
as theft or illness in return for premium payments.
Life Insurance - (ANSWER)Is based on actuarial or mathematical principles and
guarantees a specified sum of money upon the death of the person who is
insured.
Annuities - (ANSWER)Provide a stream of income by making a series of payments
to the annuitant for the annuitant's lifetime or for a specifically designated period
of time.
Risk - (ANSWER)Uncertainty regarding loss; the probability of loss occurring for
an insured or prospect
Speculative Risks - (ANSWER)Involve the possibility of loss and gain. (Not
Insurable)
Pure Risks - (ANSWER)Involve the possibility of loss only. (Insurable)
Peril - (ANSWER)Cause of risk (when a building burns, fire is the peril)
,Hazards - (ANSWER)The source of danger
Physical Hazard - (ANSWER)A hazard being of physical nature.
A person being treated of cancer, the disease is the physical endangerment.
(Blindness & deafness)
Risk Avoidance - (ANSWER)Occurs when individuals evade risk entirely. "If you
don't drive, then you avoid getting in an auto accident."
Risk Reduction - (ANSWER)Takes place when the chances of loss are lessened.
Changing a lifestyle to minimize a known risk.
Risk Retention - (ANSWER)Being aware of the risks involved and taking
precautions for financial protection. Auto policy's deductible is an illustration of
risk retention
Risk Transference - (ANSWER)The act of shifting the responsibility of risk to
another in the form of an insurance contract.
Adverse Selection - (ANSWER)Refers to the tendency for those individuals who
present less favorable insurance risk to seek or continue insurance to a great
extent than other risks.
Insuring Pure Risk - (ANSWER)Loss must be due to chance
,Loss must be definite and measurable
Risk must be predictable
Loss must NOT be catastrophic
Exposure to loss must be large
Loss exposures must be randomly selected
Mutual Insurers - (ANSWER)Participating policies
Owned by policyholders
Vote for directors and trustees
Directors and management have control
Typically higher rates
Assessment Mutual Insurers - (ANSWER)Prohibited in Florida
Pure Assessment Mutual Company - (ANSWER)Don't pay premium and total loss
is divided among members
Lloyds of London - (ANSWER)NOT considered an insurance company
- An association of individuals and companies that individually underwriter
insurance.
Fraternal Benefit Societies - (ANSWER)Must be nonprofit, have a lodge system,
and offer insurance to its members only
, Home Service Insurer - (ANSWER)Insurer that offers relatively small policies with
premiums payable on a weekly basis.
Captive Agents - (ANSWER)A.k.a. Career agents
Works for only one insurer and sells only that insurers products
Independent Agents - (ANSWER)Is self-governing and actually works for himself.
This affords him the versatility to represent several insurers and their different
insurance products.
Special Agents - (ANSWER)Usually not license and don't sell insurance. Assist
insurance companies field representatives.
Career Agency System - (ANSWER)(GA) - Build sales staffs and agents are treated
as employees. They are recruited and trained. A principal of the company
supervises agents.
Personal Producing General Agency System - (ANSWER)(PPGA) - The agent
supplies his own working environment. Agents hired by a PPGA are considered
employees of the PPGA, not the insurance company, and are supervised by the
regional salary.
