Latest 2024/2025 Final exam questions 2-40 license study With
complete/correct Answers/100%correct
1. All of the following are elements of an insurable risk C - The loss must
Except: be catastrophic
A. The loss must be due to chance
B. The loss must be predictable
C. The loss must be catastrophic
D. The loss must have a determinable value
2. Which of the following constitutes an insurable inter- B - The policyown-
est? er must expect to
suffer a loss when
A. The policyowner must expect to benefit from the the insured dies
insured's death. or becomes dis-
B. The policyowner must expect to suffer a loss when abled.
the insured dies or becomes disabled.
C. The beneficiary, by definition, has an insurable in-
terest in the insured.
D. The insured must have a personal or business rela-
tionship with the beneficiary.
3. Which of the following statements describes the parol C - A written con-
evidence rule? tract cannot be
changed by oral
A. A written contract cannot be changed once it is evidence.
signed.
B. An oral contract cannot be modified by written
evidence.
C. A written contract cannot be changed by oral evi-
dence.
D. An oral contract takes precedence over any earlier
written contracts.
4. Which of the following factors determines whether the B - Expenses and
policy dividends will be paid on a participating policy? claims costs
A. Reserves and experience
B. Expenses and claims costs
C. Interest and benefits
D. Premiums and renewability
, Final exam questions 2-40 license study
5. A licensed agent legally represents? A - The insurer
A. The insurer
B. The applicant/insured
C. The state insurance department
D. Himself or herself
6. All of the following statements regarding policy re- D - Premiums for
placement are correct Except? replacement poli-
cies are general-
A. Replacement involves convincing a policyholder to ly lower than pre-
lapse or terminate an existing policy and to purchase miums for the ex-
another. isting policies they
B. Interrupting one cash value insurance plan to begin replace.
another could cause serious financial problems for
the policyowner.
C. Even if the customer wants to replace his or her ex-
isting policy, an agent can effect a policy replacement
only by following the replacement regulations in the
agent's state.
D. Premiums for replacement policies are generally
lower than premiums for the existing policies they
replace.
7. With regard to insurable risks, which of the following B - An insurable
statements is NOT correct? risk must involve
loss that is within
A. only pure risks are insurable the insured's con-
B. an insurable risk must involve loss that is within the trol.
insured's control
C. insurers will not insure risks that are catastrophic
in nature
D. an insurable risk must be measurable
8. On August 9th, Albert made an application for life in- C - August 21st
surance that his agent submitted a day later without a
premium payment. On August 21st, the insurer issued
the policy as applied for and on August 24th, the agent
delivered the policy and collected the initial premium.
, Final exam questions 2-40 license study
On what day was the contract offer made?
A. August 9th
B. August 10th
C. August 21st
D. August 24th
9. Which of the following legal terms indicates that a life B - Unilateral
insurance contract contains the enforceable promises
of only one party?
A. Adhesion
B. Unilateral
C. Conditional
D. Aleatory
10. Which of the following types of agent authority is A. Express
specifically set fourth in writing in the agent's con-
tract.
A. Express
B. Implied
C. Apparent
D. Personal
11. Assume a home catches fire after it is struck by light- C. The peril
ning and the fire destroys its structure and contents.
By insurance definition, the fire is
A. the risk
B. the hazard
C. the peril
D. the proximate cause
12. What constitutes "consideration" for a life insurance A. Application and
policy? initial premium.
A. Application and initial premium
B. Agent's commission
complete/correct Answers/100%correct
1. All of the following are elements of an insurable risk C - The loss must
Except: be catastrophic
A. The loss must be due to chance
B. The loss must be predictable
C. The loss must be catastrophic
D. The loss must have a determinable value
2. Which of the following constitutes an insurable inter- B - The policyown-
est? er must expect to
suffer a loss when
A. The policyowner must expect to benefit from the the insured dies
insured's death. or becomes dis-
B. The policyowner must expect to suffer a loss when abled.
the insured dies or becomes disabled.
C. The beneficiary, by definition, has an insurable in-
terest in the insured.
D. The insured must have a personal or business rela-
tionship with the beneficiary.
3. Which of the following statements describes the parol C - A written con-
evidence rule? tract cannot be
changed by oral
A. A written contract cannot be changed once it is evidence.
signed.
B. An oral contract cannot be modified by written
evidence.
C. A written contract cannot be changed by oral evi-
dence.
D. An oral contract takes precedence over any earlier
written contracts.
4. Which of the following factors determines whether the B - Expenses and
policy dividends will be paid on a participating policy? claims costs
A. Reserves and experience
B. Expenses and claims costs
C. Interest and benefits
D. Premiums and renewability
, Final exam questions 2-40 license study
5. A licensed agent legally represents? A - The insurer
A. The insurer
B. The applicant/insured
C. The state insurance department
D. Himself or herself
6. All of the following statements regarding policy re- D - Premiums for
placement are correct Except? replacement poli-
cies are general-
A. Replacement involves convincing a policyholder to ly lower than pre-
lapse or terminate an existing policy and to purchase miums for the ex-
another. isting policies they
B. Interrupting one cash value insurance plan to begin replace.
another could cause serious financial problems for
the policyowner.
C. Even if the customer wants to replace his or her ex-
isting policy, an agent can effect a policy replacement
only by following the replacement regulations in the
agent's state.
D. Premiums for replacement policies are generally
lower than premiums for the existing policies they
replace.
7. With regard to insurable risks, which of the following B - An insurable
statements is NOT correct? risk must involve
loss that is within
A. only pure risks are insurable the insured's con-
B. an insurable risk must involve loss that is within the trol.
insured's control
C. insurers will not insure risks that are catastrophic
in nature
D. an insurable risk must be measurable
8. On August 9th, Albert made an application for life in- C - August 21st
surance that his agent submitted a day later without a
premium payment. On August 21st, the insurer issued
the policy as applied for and on August 24th, the agent
delivered the policy and collected the initial premium.
, Final exam questions 2-40 license study
On what day was the contract offer made?
A. August 9th
B. August 10th
C. August 21st
D. August 24th
9. Which of the following legal terms indicates that a life B - Unilateral
insurance contract contains the enforceable promises
of only one party?
A. Adhesion
B. Unilateral
C. Conditional
D. Aleatory
10. Which of the following types of agent authority is A. Express
specifically set fourth in writing in the agent's con-
tract.
A. Express
B. Implied
C. Apparent
D. Personal
11. Assume a home catches fire after it is struck by light- C. The peril
ning and the fire destroys its structure and contents.
By insurance definition, the fire is
A. the risk
B. the hazard
C. the peril
D. the proximate cause
12. What constitutes "consideration" for a life insurance A. Application and
policy? initial premium.
A. Application and initial premium
B. Agent's commission
