XCEL 2-15 FLORIDA LIFE AND HEALTH FINAL
PAPER 2026 QUESTIONS WITH ANSWERS
GRADED A+
◉ What is considered to be the primary reason for buying life
insurance? Answer: Provide death benefits
◉ Which of the following is NOT considered advertising? Answer: A
rating from a rating service company, such as A.M. Best
◉ A plan in which an employer pays insurance benefits from a fund
derived from the employer's current revenues is called. Answer: A self-
funded plan
◉ What kind of life insurance policy issued by a mutual insurer provides
a return of divisible surplus? Answer: Participating life insurance policy
◉ Why are dividends from a mutual insurer not subject to taxation?
Answer: Because dividends are considered to be a return of premium
◉ A type of insurer that is owned by its policyowners is called. Answer:
Mutual
,◉ A nonparticipating company is sometimes called a(n). Answer: stock
insurer
◉ The Fair Credit and Reporting Act's main purpose is to. Answer:
protect consumers with guidelines regarding credit reporting and
distribution
◉ The Do Not Call Registry offers exemptions for calls placed from all
of the following EXCEPT. Answer: Insurance sales calls
◉ An insurer's ability to make unpredictable payouts to policyowners is
called. Answer: Liquidity
◉ A nonparticipating policy will. Answer: not pay dividends
◉ Ken is a producer who has obtained Consumer Information Reports
under false pretenses. Under the Fair Credit Reporting Act, what is the
maximum penalty that may be imposed on Ken? Answer: $5,000
◉ A life insurance company has transferred some of its risk to another
insurer. The insurer assuming the risk is called the. Answer: reinsurer
◉ Karen is a producer who has obtained personal information about a
client without having a legitimate reason to do so. Under the McCarran-
Ferguson Act, what is the minimum penalty for this? Answer: $10,000
,◉ Which of these are considered to be events or conditions that increase
the chances of an insured's loss? Answer: Hazards
◉ People with higher loss exposure have the tendency to purchase
insurance more often than those at average risk. This is called. Answer:
adverse selection
◉ An example of risk sharing would be. Answer: Doctors pooling their
money to cover malpractice exposures
◉ Which of these techniques will remove the risk of losing money in the
stock market by never purchasing stocks? Answer: Risk Avoidance
◉ How do insurers predict the increase of individual risks? Answer: The
law of large numbers
◉ Insurance companies determine risk exposure by which of the
following? Answer: Law of large numbers and risk pooling
◉ Because an insurance contract has been prepared by an insurance
company with no negotiation, it is considered. Answer: A contract of
adhesion
, ◉ A producer's powers stated in the agency contract are. Answer:
Express
◉ What makes an insurance policy a unilateral contract? Answer: Only
the insurer is legally bound
◉ Intentional withholding of material facts that would affect an
insurance policy's validity is called a(n). Answer: Concealment
◉ Legal purpose is a term used in contract law meaning. Answer: there
must be legal reasons for entering into the contract
◉ What are an applicant's statements concerning occupation, hobbies,
and personal health history regarded as? Answer: representation
◉ Which type of clause describes the following statement: "We have
issued the policy in consideration of the representations in your
applications and payment of the first-term premium". Answer:
consideration clause
◉ When the principal gives the agent authority in writing, it's referred to
as. Answer: Express authority
◉ The term which describes the fact that both parties of a contract may
NOT receive the same value is referred to as. Answer: Aleatory
PAPER 2026 QUESTIONS WITH ANSWERS
GRADED A+
◉ What is considered to be the primary reason for buying life
insurance? Answer: Provide death benefits
◉ Which of the following is NOT considered advertising? Answer: A
rating from a rating service company, such as A.M. Best
◉ A plan in which an employer pays insurance benefits from a fund
derived from the employer's current revenues is called. Answer: A self-
funded plan
◉ What kind of life insurance policy issued by a mutual insurer provides
a return of divisible surplus? Answer: Participating life insurance policy
◉ Why are dividends from a mutual insurer not subject to taxation?
Answer: Because dividends are considered to be a return of premium
◉ A type of insurer that is owned by its policyowners is called. Answer:
Mutual
,◉ A nonparticipating company is sometimes called a(n). Answer: stock
insurer
◉ The Fair Credit and Reporting Act's main purpose is to. Answer:
protect consumers with guidelines regarding credit reporting and
distribution
◉ The Do Not Call Registry offers exemptions for calls placed from all
of the following EXCEPT. Answer: Insurance sales calls
◉ An insurer's ability to make unpredictable payouts to policyowners is
called. Answer: Liquidity
◉ A nonparticipating policy will. Answer: not pay dividends
◉ Ken is a producer who has obtained Consumer Information Reports
under false pretenses. Under the Fair Credit Reporting Act, what is the
maximum penalty that may be imposed on Ken? Answer: $5,000
◉ A life insurance company has transferred some of its risk to another
insurer. The insurer assuming the risk is called the. Answer: reinsurer
◉ Karen is a producer who has obtained personal information about a
client without having a legitimate reason to do so. Under the McCarran-
Ferguson Act, what is the minimum penalty for this? Answer: $10,000
,◉ Which of these are considered to be events or conditions that increase
the chances of an insured's loss? Answer: Hazards
◉ People with higher loss exposure have the tendency to purchase
insurance more often than those at average risk. This is called. Answer:
adverse selection
◉ An example of risk sharing would be. Answer: Doctors pooling their
money to cover malpractice exposures
◉ Which of these techniques will remove the risk of losing money in the
stock market by never purchasing stocks? Answer: Risk Avoidance
◉ How do insurers predict the increase of individual risks? Answer: The
law of large numbers
◉ Insurance companies determine risk exposure by which of the
following? Answer: Law of large numbers and risk pooling
◉ Because an insurance contract has been prepared by an insurance
company with no negotiation, it is considered. Answer: A contract of
adhesion
, ◉ A producer's powers stated in the agency contract are. Answer:
Express
◉ What makes an insurance policy a unilateral contract? Answer: Only
the insurer is legally bound
◉ Intentional withholding of material facts that would affect an
insurance policy's validity is called a(n). Answer: Concealment
◉ Legal purpose is a term used in contract law meaning. Answer: there
must be legal reasons for entering into the contract
◉ What are an applicant's statements concerning occupation, hobbies,
and personal health history regarded as? Answer: representation
◉ Which type of clause describes the following statement: "We have
issued the policy in consideration of the representations in your
applications and payment of the first-term premium". Answer:
consideration clause
◉ When the principal gives the agent authority in writing, it's referred to
as. Answer: Express authority
◉ The term which describes the fact that both parties of a contract may
NOT receive the same value is referred to as. Answer: Aleatory
