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FLORIDA INSURANCE 2-14 EXAM 2025 QUESTIONS
AND ANSWERS.
1. 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.
2. 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.
3. 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.
4. Risk - Correct answer-Uncertainty regarding loss; the probability
of loss occurring for an insured or prospect
5. Speculative Risks - Correct answer-Involve the possibility of loss and
gain. (Not Insurable)
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6. Pure Risks - Correct answer-Involve the possibility of loss only. (Insurable)
7. Peril - Correct answer-Cause of risk (when a building burns, fire is the peril)
8. Hazards - Correct answer-The source of danger
9. Physical Hazard - Correct answer-A hazard being of physical nature.
10. A person being treated of cancer, the disease is the physical
endangerment. (Blindness & deafness)
11. Risk Avoidance - Correct answer-Occurs when individuals evade risk
entirely. "If you don't drive, then you avoid getting in an auto accident."
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12. Risk Reduction - Correct answer-Takes place when the chances of loss
are lessened. Changing a lifestyle to minimize a known risk.
13. 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
14. Risk Transference - Correct answer-The act of shifting the
responsibility of risk to another in the form of an insurance contract.
15. 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.
16. Insuring Pure Risk - Correct answer-Loss must be due to chance
17. Loss must be definite and measurable
18. Risk must be predictable
19. Loss must NOT be catastrophic
20. Exposure to loss must be large
21. Loss exposures must be randomly selected
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22. Mutual Insurers - Correct answer-Participating policies
23. Owned by policyholders
24. Vote for directors and trustees
25. Directors and management have control
26. Typically higher rates
27. Assessment Mutual Insurers - Correct answer-Prohibited in Florida
28. Pure Assessment Mutual Company - Correct answer-Don't pay
premium and total loss is divided among members
29. Lloyds of London - Correct answer-NOT considered an insurance
company
- An association of individuals and companies that
individually underwriter insurance.
30. Fraternal Benefit Societies - Correct answer-Must be nonprofit,
have a lodge system, and offer insurance to its members only
FLORIDA INSURANCE 2-14 EXAM 2025 QUESTIONS
AND ANSWERS.
1. 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.
2. 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.
3. 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.
4. Risk - Correct answer-Uncertainty regarding loss; the probability
of loss occurring for an insured or prospect
5. Speculative Risks - Correct answer-Involve the possibility of loss and
gain. (Not Insurable)
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6. Pure Risks - Correct answer-Involve the possibility of loss only. (Insurable)
7. Peril - Correct answer-Cause of risk (when a building burns, fire is the peril)
8. Hazards - Correct answer-The source of danger
9. Physical Hazard - Correct answer-A hazard being of physical nature.
10. A person being treated of cancer, the disease is the physical
endangerment. (Blindness & deafness)
11. Risk Avoidance - Correct answer-Occurs when individuals evade risk
entirely. "If you don't drive, then you avoid getting in an auto accident."
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12. Risk Reduction - Correct answer-Takes place when the chances of loss
are lessened. Changing a lifestyle to minimize a known risk.
13. 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
14. Risk Transference - Correct answer-The act of shifting the
responsibility of risk to another in the form of an insurance contract.
15. 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.
16. Insuring Pure Risk - Correct answer-Loss must be due to chance
17. Loss must be definite and measurable
18. Risk must be predictable
19. Loss must NOT be catastrophic
20. Exposure to loss must be large
21. Loss exposures must be randomly selected
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22. Mutual Insurers - Correct answer-Participating policies
23. Owned by policyholders
24. Vote for directors and trustees
25. Directors and management have control
26. Typically higher rates
27. Assessment Mutual Insurers - Correct answer-Prohibited in Florida
28. Pure Assessment Mutual Company - Correct answer-Don't pay
premium and total loss is divided among members
29. Lloyds of London - Correct answer-NOT considered an insurance
company
- An association of individuals and companies that
individually underwriter insurance.
30. Fraternal Benefit Societies - Correct answer-Must be nonprofit,
have a lodge system, and offer insurance to its members only
