FLORIDA 240 LICENSE EXAM AND PRACTICE
EXAM NEW VERSION WITH 300 QUESTIONS AND
100% VERIFIED ANSWERS WELL GRADED A+
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
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
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
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-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
EXAM NEW VERSION WITH 300 QUESTIONS AND
100% VERIFIED ANSWERS WELL GRADED A+
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
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
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
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-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
