2024 FLORIDA 240 LICENSE EXAM
WITH CORRECT 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: -
CORRECT ANSWERS- Reserves
What I the name of the law that requires insurers to disclose information
gathering practices and where the information was obtained? - CORRECT
ANSWERS- Fair Credit Reporting Act
Who elects the governing body of a mutual insurance company? - CORRECT
ANSWERS- Policyholders
A group plan was recently terminated. In Florida, how many days are
covered individuals guaranteed coverage after a group plan's termination? -
CORRECT ANSWERS- 31 days
An insurance applicant MUST be informed of an investigation regarding
his/her reputation and character according to the: - CORRECT 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: - CORRECT
ANSWERS- A fraternal benefit society
The Florida Employee Health Care Access Act was established to make -
CORRECT ANSWERS- group health insurance available to employers with up
to 50 employees
Florida requires that coverage for newborns begins "from the moment of
birth" and continues for - CORRECT ANSWERS- 18 months
In order for a domestic, foreign, or alien insurance company to conduct
business, it must be authorized by whom? - CORRECT ANSWERS- The state
where they are conducting business
A group-owned insurance company that is formed to assume and spread the
liability ricks of its members is known as a: - CORRECT ANSWERS- Risk
retention group
,What type of reinsurance contract involves two companies automatically
sharing their risk exposure? - CORRECT ANSWERS- treaty
What year was the McCarran-Ferguson Act enacted? - CORRECT ANSWERS-
1945
Which of these describe a participating life insurance policy? - CORRECT
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? - CORRECT 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: - CORRECT ANSWERS-
1970 - Fair Credit Reporting Act
What type of reinsurance contract involves two companies automatically
sharing their risk exposure? - CORRECT ANSWERS- Treaty
A group-owned insurance company that is formed to assume and spread the
liability risks of its members is known as a: - CORRECT ANSWERS- risk
retention group
All of the following are considered to be typical characteristics describing the
nature of an insurance contract, EXCEPT: - CORRECT ANSWERS- Bilateral
The part of a life insurance policy guaranteed to be true is called a(n) -
CORRECT ANSWERS- warranty
Statements made on an insurance application that are believed to be true to
the best of the applicant's knowledge are called - CORRECT ANSWERS-
representations
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? - CORRECT ANSWERS- Aleatory
When must insurable interest be present in order for a life insurance policy
to be valid? - CORRECT ANSWERS- When the application is made
A life insurance arrangement which circumvents insurable interest statutes is
called: - CORRECT ANSWERS- Investor-Originated Life Insurance
,Stranger Originated Life Insurance (STOLI) has been found to be in violation
of which of the following contractual elements? - CORRECT ANSWERS- Legal
Purpose (Insurable Interest)
Who makes the legally enforceable promises in a unilateral contract? -
CORRECT ANSWERS- Insurance company
A policy of adhesion can only be modified by whom? - CORRECT ANSWERS-
insurance company
When third-party ownership is involved, applicants who also happen to be
the stated primary beneficiary are required to have: - CORRECT ANSWERS-
insurable interest in the proposed insured
Which of these is considered a statement that is assured to be true in every
aspect? - CORRECT ANSWERS- Warranty
Which of these require an offer, acceptance, and consideration? - CORRECT
ANSWERS- contract
If a contract of adhesion contains complicated language, to whom would the
interpretation be in favor of? - CORRECT ANSWERS- insured
Insurance contracts are known as _____ because certain future conditions or
acts must occur before any claims can be paid. - CORRECT ANSWERS-
conditional
Insurance policies are offered on a "take it or leave it" basis, which make
them: - CORRECT ANSWERS- Contracts of Adhesion
In regards to representations or warranties, which of these statements is
TRUE? - CORRECT ANSWERS- If material to the risk, false representations
will void a policy
Which of these arrangements allows one to bypass insurable interest laws? -
CORRECT 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? - CORRECT ANSWERS-
unilateral
Which of these is NOT a type of agent authority? - CORRECT 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? - CORRECT ANSWERS-
In 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? -
CORRECT ANSWERS- Inception of the contract
Life and health insurance policies are: - CORRECT ANSWERS- unilateral
contracts
A policy of adhesion can only be modified by whom? - CORRECT ANSWERS-
insurance company
At what point does an informal contract become binding? - CORRECT
ANSWERS- When 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? - CORRECT ANSWERS- Promise to pay a death benefit
What is the consideration given by an insurer in the Consideration clause of
life policy? - CORRECT ANSWERS- Promise to pay a death benefit to a named
beneficiary
Insurance policies are considered aleatory contracts because: - CORRECT
ANSWERS- performance is conditioned upon a future occurrence
Taking receipt of premiums and holding them for the insurance company is
an example of - CORRECT ANSWERS- fiduciary responsibility
The Consideration clause in a life insurance contract contains what pertinent
information? - CORRECT ANSWERS- The schedule and amount of premium
payments
Which of the following consists of an offer, acceptance, and consideration? -
CORRECT ANSWERS- Contract
Which of the following consists of an offer, acceptance, and consideration? -
CORRECT ANSWERS- contract
Which of these is NOT considered to be an element of an insurance
company? - CORRECT ANSWERS- Negotiating
WITH CORRECT 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: -
CORRECT ANSWERS- Reserves
What I the name of the law that requires insurers to disclose information
gathering practices and where the information was obtained? - CORRECT
ANSWERS- Fair Credit Reporting Act
Who elects the governing body of a mutual insurance company? - CORRECT
ANSWERS- Policyholders
A group plan was recently terminated. In Florida, how many days are
covered individuals guaranteed coverage after a group plan's termination? -
CORRECT ANSWERS- 31 days
An insurance applicant MUST be informed of an investigation regarding
his/her reputation and character according to the: - CORRECT 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: - CORRECT
ANSWERS- A fraternal benefit society
The Florida Employee Health Care Access Act was established to make -
CORRECT ANSWERS- group health insurance available to employers with up
to 50 employees
Florida requires that coverage for newborns begins "from the moment of
birth" and continues for - CORRECT ANSWERS- 18 months
In order for a domestic, foreign, or alien insurance company to conduct
business, it must be authorized by whom? - CORRECT ANSWERS- The state
where they are conducting business
A group-owned insurance company that is formed to assume and spread the
liability ricks of its members is known as a: - CORRECT ANSWERS- Risk
retention group
,What type of reinsurance contract involves two companies automatically
sharing their risk exposure? - CORRECT ANSWERS- treaty
What year was the McCarran-Ferguson Act enacted? - CORRECT ANSWERS-
1945
Which of these describe a participating life insurance policy? - CORRECT
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? - CORRECT 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: - CORRECT ANSWERS-
1970 - Fair Credit Reporting Act
What type of reinsurance contract involves two companies automatically
sharing their risk exposure? - CORRECT ANSWERS- Treaty
A group-owned insurance company that is formed to assume and spread the
liability risks of its members is known as a: - CORRECT ANSWERS- risk
retention group
All of the following are considered to be typical characteristics describing the
nature of an insurance contract, EXCEPT: - CORRECT ANSWERS- Bilateral
The part of a life insurance policy guaranteed to be true is called a(n) -
CORRECT ANSWERS- warranty
Statements made on an insurance application that are believed to be true to
the best of the applicant's knowledge are called - CORRECT ANSWERS-
representations
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? - CORRECT ANSWERS- Aleatory
When must insurable interest be present in order for a life insurance policy
to be valid? - CORRECT ANSWERS- When the application is made
A life insurance arrangement which circumvents insurable interest statutes is
called: - CORRECT ANSWERS- Investor-Originated Life Insurance
,Stranger Originated Life Insurance (STOLI) has been found to be in violation
of which of the following contractual elements? - CORRECT ANSWERS- Legal
Purpose (Insurable Interest)
Who makes the legally enforceable promises in a unilateral contract? -
CORRECT ANSWERS- Insurance company
A policy of adhesion can only be modified by whom? - CORRECT ANSWERS-
insurance company
When third-party ownership is involved, applicants who also happen to be
the stated primary beneficiary are required to have: - CORRECT ANSWERS-
insurable interest in the proposed insured
Which of these is considered a statement that is assured to be true in every
aspect? - CORRECT ANSWERS- Warranty
Which of these require an offer, acceptance, and consideration? - CORRECT
ANSWERS- contract
If a contract of adhesion contains complicated language, to whom would the
interpretation be in favor of? - CORRECT ANSWERS- insured
Insurance contracts are known as _____ because certain future conditions or
acts must occur before any claims can be paid. - CORRECT ANSWERS-
conditional
Insurance policies are offered on a "take it or leave it" basis, which make
them: - CORRECT ANSWERS- Contracts of Adhesion
In regards to representations or warranties, which of these statements is
TRUE? - CORRECT ANSWERS- If material to the risk, false representations
will void a policy
Which of these arrangements allows one to bypass insurable interest laws? -
CORRECT 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? - CORRECT ANSWERS-
unilateral
Which of these is NOT a type of agent authority? - CORRECT 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? - CORRECT ANSWERS-
In 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? -
CORRECT ANSWERS- Inception of the contract
Life and health insurance policies are: - CORRECT ANSWERS- unilateral
contracts
A policy of adhesion can only be modified by whom? - CORRECT ANSWERS-
insurance company
At what point does an informal contract become binding? - CORRECT
ANSWERS- When 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? - CORRECT ANSWERS- Promise to pay a death benefit
What is the consideration given by an insurer in the Consideration clause of
life policy? - CORRECT ANSWERS- Promise to pay a death benefit to a named
beneficiary
Insurance policies are considered aleatory contracts because: - CORRECT
ANSWERS- performance is conditioned upon a future occurrence
Taking receipt of premiums and holding them for the insurance company is
an example of - CORRECT ANSWERS- fiduciary responsibility
The Consideration clause in a life insurance contract contains what pertinent
information? - CORRECT ANSWERS- The schedule and amount of premium
payments
Which of the following consists of an offer, acceptance, and consideration? -
CORRECT ANSWERS- Contract
Which of the following consists of an offer, acceptance, and consideration? -
CORRECT ANSWERS- contract
Which of these is NOT considered to be an element of an insurance
company? - CORRECT ANSWERS- Negotiating
