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FLORIDA INSURANCE 2-14 EXAM TERMS 2025|
BRAND NEW ACTUAL EXAM WITH 100% VERIFIED
QUESTIONS AND CORRECT SOLUTIONS|
GUARANTEED VALUE PACK| ACE YOUR GRADES.
Insurance - correct 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 - correct 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 - correct 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 - correct answer - Uncertainty regarding loss; the probability of loss
occurring for an insured or prospect
Speculative Risks - correct answer - Involve the possibility of loss and gain.
(Not Insurable)
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Pure Risks - correct answer - Involve the possibility of loss only. (Insurable)
Peril - correct answer - Cause of risk (when a building burns, fire is the
peril)
Hazards - correct answer - The source of danger
Physical Hazard - correct answer - A hazard being of physical nature.
A person being treated of cancer, the disease is the physical
endangerment. (Blindness & deafness)
Risk Avoidance - correct answer - Occurs when individuals evade risk
entirely. "If you don't drive, then you avoid getting in an auto accident."
Risk Reduction - correct answer - Takes place when the chances of loss
are lessened. Changing a lifestyle to minimize a known risk.
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Risk Retention - correct 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 - correct answer - The act of shifting the responsibility of
risk to another in the form of an insurance contract.
Adverse Selection - correct 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 - correct 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 - correct answer - Participating policies
Owned by policyholders
Vote for directors and trustees
Directors and management have control
Typically higher rates
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Assessment Mutual Insurers - correct answer - Prohibited in Florida
Pure Assessment Mutual Company - correct answer - Don't pay premium
and total loss is divided among members
Lloyds of London - correct answer - NOT considered an insurance
company
- An association of individuals and companies that individually underwriter
insurance.
Fraternal Benefit Societies - correct answer - Must be nonprofit, have a
lodge system, and offer insurance to its members only
Home Service Insurer - correct answer - Insurer that offers relatively small
policies with premiums payable on a weekly basis.
Captive Agents - correct answer - A.k.a. Career agents
Works for only one insurer and sells only that insurers products
FLORIDA INSURANCE 2-14 EXAM TERMS 2025|
BRAND NEW ACTUAL EXAM WITH 100% VERIFIED
QUESTIONS AND CORRECT SOLUTIONS|
GUARANTEED VALUE PACK| ACE YOUR GRADES.
Insurance - correct 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 - correct 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 - correct 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 - correct answer - Uncertainty regarding loss; the probability of loss
occurring for an insured or prospect
Speculative Risks - correct answer - Involve the possibility of loss and gain.
(Not Insurable)
, Page |2
Pure Risks - correct answer - Involve the possibility of loss only. (Insurable)
Peril - correct answer - Cause of risk (when a building burns, fire is the
peril)
Hazards - correct answer - The source of danger
Physical Hazard - correct answer - A hazard being of physical nature.
A person being treated of cancer, the disease is the physical
endangerment. (Blindness & deafness)
Risk Avoidance - correct answer - Occurs when individuals evade risk
entirely. "If you don't drive, then you avoid getting in an auto accident."
Risk Reduction - correct answer - Takes place when the chances of loss
are lessened. Changing a lifestyle to minimize a known risk.
, Page |3
Risk Retention - correct 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 - correct answer - The act of shifting the responsibility of
risk to another in the form of an insurance contract.
Adverse Selection - correct 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 - correct 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 - correct answer - Participating policies
Owned by policyholders
Vote for directors and trustees
Directors and management have control
Typically higher rates
, Page |4
Assessment Mutual Insurers - correct answer - Prohibited in Florida
Pure Assessment Mutual Company - correct answer - Don't pay premium
and total loss is divided among members
Lloyds of London - correct answer - NOT considered an insurance
company
- An association of individuals and companies that individually underwriter
insurance.
Fraternal Benefit Societies - correct answer - Must be nonprofit, have a
lodge system, and offer insurance to its members only
Home Service Insurer - correct answer - Insurer that offers relatively small
policies with premiums payable on a weekly basis.
Captive Agents - correct answer - A.k.a. Career agents
Works for only one insurer and sells only that insurers products
