Florida Life and Health Insurance
Exam Questions and Answers
Insured - ANS-The person covered by the insurance policy.
Rider - ANS-A written modification attached to a policy that increases or decreases
coverage and/or premiums.
What is a unilateral contract? - ANS-A contract in which only one of the parties is legally
bound to fulfill its obligations.
What law protects consumers from the circulation of inaccurate or obsolete information?
- ANS-The Fair Credit Reporting Act.
What are the three types of agent authority? - ANS-Implied, Express, and Apparent.
Agent - ANS-An individual who is licensed to sell, negotiate, or effect insurance
contracts on behalf of the insurer.
What is name of the process that insurance companies use to determine whether or not
an applicant is insurable? - ANS-Underwriting
The requirement that agents must account for and promptly remit all insurance funds
collected is known as what type of agent responsibility? - ANS-Fiduciary
What is a third-party ownership? - ANS-An insurance arrangement in which the policy
owner and the insured are not the same person.
Suitability - ANS-Factors that determine if an insurance product is appropriate for a
particular customer.
Premium - ANS-A payment by the policy owner to the insurance company to keep the
policy in force.
Disclosure - ANS-Providing sufficient information to help someone make informed
decision.
An agent offer a client free tickets to a sporting event in exchange for the purchase of
an insurance policy. What is the agent guilty of? - ANS-Rebating
,If an insurer meets the states financial requirements and is approved to transact
business in the state, it is considered what type of insurer? - ANS-Authorized
What information are the members of the medical information bureau required to
report? - ANS-Adverse medical information about the applicants or insureds.
What type of beneficiary can be changed at any point by the policy owner? - ANS-
Revocable
What document describes the specific information about a policy? - ANS-Policy
Summary
What is the term for the causes of loss insured against in an insurance policy? - ANS-
Peril
Whom does an insurance agent represent? - ANS-Insurance Company
What is an unfair trade practice? - ANS-Any fraudulent, deceptive, or dishonest
business practice that is prohibited by statutes and regulations.
Insurer - ANS-The company that issues an insurance policy.
Peril - ANS-Cause of loss
Contract of Adhesion - ANS-A contract prepared by one party that must be accepted as
written or be rejected by the other party.
What are the four elements of an insurance contract? - ANS-Agreement (Offer and
Acceptance), consideration, competent parties, and legal purpose.
Policy Provision - ANS-A clause that stipulates the rights and obligations under an
insurance contract.
Fiduciary - ANS-A producer who handles insurer's funds in a trust capacity.
Who is considered a nonresident agent? - ANS-An agent who resides and is licensed in
another state, but is authorized to transact insurance in Florida.
What is underwriting? - ANS-The risk selection and classification process.
What is the best way to handle incomplete insurance applications? - ANS-Return the
application to the applicant for completion.
What are the five characteristics of an ideally insurable risk? - ANS-Loss must be:
1. Due to Change
2. Definite and measurable
, 3. Statistically predictable
4. Not catastrophic
5. Coverage cannot be mandatory.
What type of policy issues certificates of insurance to the insurance? - ANS-Group
Policy
What is the purpose of a free-look period? - ANS-To allow the insured to return the
policy and get a full refund (if done during the free-look period)
Whose responsibility is it to determine that all of the questions on an insurance
application are answered? - ANS-The Agent's
What types of licensee represents the insurance company? - ANS-Agent
Who must be notified of the producers change of address? - ANS-The department of
Insurance
Certificate of Insurance - ANS-A document issued to insureds under a group plan that
states the coverage being issued, and indicates the coverage type and amounts.
Nonrenewal - ANS-Termination of a policy by an insurer on the anniversary or renewal
date.
Representation - ANS-A statement made by the applicant on the insurance application
that is believed to be true.
What is a warranty? - ANS-An absolutely true statement that, if breached, may viod an
insurance contract.
In insurance, when is the offer usually made on a contract? - ANS-When the insurance
application is submitted.
When a change needs to be made on the application for insurance, which is the best
method for correcting the information? - ANS-Complete a new application or ask the
applicant to initial the correction on the original application.
A situation in which a person can only experience a loss and no gain represents what
type of risk? - ANS-Pure Risk
Who is responsible for the contents of insurance advertisements? - ANS-The Insurance
Company
What is the entire contract in health insurance underwriting? - ANS-The policy with
riders and endorsements, plus a copy of the application.
Exam Questions and Answers
Insured - ANS-The person covered by the insurance policy.
Rider - ANS-A written modification attached to a policy that increases or decreases
coverage and/or premiums.
What is a unilateral contract? - ANS-A contract in which only one of the parties is legally
bound to fulfill its obligations.
What law protects consumers from the circulation of inaccurate or obsolete information?
- ANS-The Fair Credit Reporting Act.
What are the three types of agent authority? - ANS-Implied, Express, and Apparent.
Agent - ANS-An individual who is licensed to sell, negotiate, or effect insurance
contracts on behalf of the insurer.
What is name of the process that insurance companies use to determine whether or not
an applicant is insurable? - ANS-Underwriting
The requirement that agents must account for and promptly remit all insurance funds
collected is known as what type of agent responsibility? - ANS-Fiduciary
What is a third-party ownership? - ANS-An insurance arrangement in which the policy
owner and the insured are not the same person.
Suitability - ANS-Factors that determine if an insurance product is appropriate for a
particular customer.
Premium - ANS-A payment by the policy owner to the insurance company to keep the
policy in force.
Disclosure - ANS-Providing sufficient information to help someone make informed
decision.
An agent offer a client free tickets to a sporting event in exchange for the purchase of
an insurance policy. What is the agent guilty of? - ANS-Rebating
,If an insurer meets the states financial requirements and is approved to transact
business in the state, it is considered what type of insurer? - ANS-Authorized
What information are the members of the medical information bureau required to
report? - ANS-Adverse medical information about the applicants or insureds.
What type of beneficiary can be changed at any point by the policy owner? - ANS-
Revocable
What document describes the specific information about a policy? - ANS-Policy
Summary
What is the term for the causes of loss insured against in an insurance policy? - ANS-
Peril
Whom does an insurance agent represent? - ANS-Insurance Company
What is an unfair trade practice? - ANS-Any fraudulent, deceptive, or dishonest
business practice that is prohibited by statutes and regulations.
Insurer - ANS-The company that issues an insurance policy.
Peril - ANS-Cause of loss
Contract of Adhesion - ANS-A contract prepared by one party that must be accepted as
written or be rejected by the other party.
What are the four elements of an insurance contract? - ANS-Agreement (Offer and
Acceptance), consideration, competent parties, and legal purpose.
Policy Provision - ANS-A clause that stipulates the rights and obligations under an
insurance contract.
Fiduciary - ANS-A producer who handles insurer's funds in a trust capacity.
Who is considered a nonresident agent? - ANS-An agent who resides and is licensed in
another state, but is authorized to transact insurance in Florida.
What is underwriting? - ANS-The risk selection and classification process.
What is the best way to handle incomplete insurance applications? - ANS-Return the
application to the applicant for completion.
What are the five characteristics of an ideally insurable risk? - ANS-Loss must be:
1. Due to Change
2. Definite and measurable
, 3. Statistically predictable
4. Not catastrophic
5. Coverage cannot be mandatory.
What type of policy issues certificates of insurance to the insurance? - ANS-Group
Policy
What is the purpose of a free-look period? - ANS-To allow the insured to return the
policy and get a full refund (if done during the free-look period)
Whose responsibility is it to determine that all of the questions on an insurance
application are answered? - ANS-The Agent's
What types of licensee represents the insurance company? - ANS-Agent
Who must be notified of the producers change of address? - ANS-The department of
Insurance
Certificate of Insurance - ANS-A document issued to insureds under a group plan that
states the coverage being issued, and indicates the coverage type and amounts.
Nonrenewal - ANS-Termination of a policy by an insurer on the anniversary or renewal
date.
Representation - ANS-A statement made by the applicant on the insurance application
that is believed to be true.
What is a warranty? - ANS-An absolutely true statement that, if breached, may viod an
insurance contract.
In insurance, when is the offer usually made on a contract? - ANS-When the insurance
application is submitted.
When a change needs to be made on the application for insurance, which is the best
method for correcting the information? - ANS-Complete a new application or ask the
applicant to initial the correction on the original application.
A situation in which a person can only experience a loss and no gain represents what
type of risk? - ANS-Pure Risk
Who is responsible for the contents of insurance advertisements? - ANS-The Insurance
Company
What is the entire contract in health insurance underwriting? - ANS-The policy with
riders and endorsements, plus a copy of the application.
