Florida Insurance 2-15 Exam Terms Exam
Questions With Correct Answers
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.
Health |Insurance |- |CORRECT |ANSWER✔✔-Evolved |from |scientific |principles |to |provide |funds |
for |medical |expensed |due |to |sickness |or |injury |and |to |cover |loss |of |income |during |disability
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)
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.
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
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
Service |Providers |- |CORRECT |ANSWER✔✔-Contract |for |and |sell |medical |and |hospital |care |
services. |Participants |are |known |as |subscribers.
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
, Independent |Agents |- |CORRECT |ANSWER✔✔-Is |self-governing |and |actually |works |for |himself. |
This |affords |him |the |versatility |to |represent |several |insurers |and |their |different |insurance |
products.
Special |Agents |- |CORRECT |ANSWER✔✔-Usually |not |license |and |don't |sell |insurance. |Assist |
insurance |companies |field |representatives.
Career |Agency |System |- |CORRECT |ANSWER✔✔-(GA) |- |Build |sales |staffs |and |agents |are |treated
|as |employees. |They |are |recruited |and |trained. |A |principal |of |the |company |supervises |agents.
Personal |Producing |General |Agency |System |- |CORRECT |ANSWER✔✔-(PPGA) |- |The |agent |
supplies |his |own |working |environment. |Agents |hired |by |a |PPGA |are |considered |employees |of |
the |PPGA, |not |the |insurance |company, |and |are |supervised |by |the |regional |salary.
Independent |Agency |System |- |CORRECT |ANSWER✔✔-Agents |represent |several |insurers |
through |signed |contracts |and |are |paid |on |commission |or |fee |basis, |not |through |salary.
Regulating |the |business |of |insurance |- |CORRECT |ANSWER✔✔-Legislation
The |Court |System
State |Insurance |Departments
Paul |v. |Virginia |- |CORRECT |ANSWER✔✔-- |State |tried |to |control |insurance |domiciled |from |
another |state.
- |U.S. |Supreme |Court |sided |against |insurance |company
- |Upholding |the |right |of |sate |to |regulate |insurance
- |States |WIN
United |States |v. |Southeastern |Underwriters |Association |(SEUA) |- |CORRECT |ANSWER✔✔-- |
Ruling |is |a |form |of |interstate |commerce
Questions With Correct Answers
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.
Health |Insurance |- |CORRECT |ANSWER✔✔-Evolved |from |scientific |principles |to |provide |funds |
for |medical |expensed |due |to |sickness |or |injury |and |to |cover |loss |of |income |during |disability
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)
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.
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
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
Service |Providers |- |CORRECT |ANSWER✔✔-Contract |for |and |sell |medical |and |hospital |care |
services. |Participants |are |known |as |subscribers.
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
, Independent |Agents |- |CORRECT |ANSWER✔✔-Is |self-governing |and |actually |works |for |himself. |
This |affords |him |the |versatility |to |represent |several |insurers |and |their |different |insurance |
products.
Special |Agents |- |CORRECT |ANSWER✔✔-Usually |not |license |and |don't |sell |insurance. |Assist |
insurance |companies |field |representatives.
Career |Agency |System |- |CORRECT |ANSWER✔✔-(GA) |- |Build |sales |staffs |and |agents |are |treated
|as |employees. |They |are |recruited |and |trained. |A |principal |of |the |company |supervises |agents.
Personal |Producing |General |Agency |System |- |CORRECT |ANSWER✔✔-(PPGA) |- |The |agent |
supplies |his |own |working |environment. |Agents |hired |by |a |PPGA |are |considered |employees |of |
the |PPGA, |not |the |insurance |company, |and |are |supervised |by |the |regional |salary.
Independent |Agency |System |- |CORRECT |ANSWER✔✔-Agents |represent |several |insurers |
through |signed |contracts |and |are |paid |on |commission |or |fee |basis, |not |through |salary.
Regulating |the |business |of |insurance |- |CORRECT |ANSWER✔✔-Legislation
The |Court |System
State |Insurance |Departments
Paul |v. |Virginia |- |CORRECT |ANSWER✔✔-- |State |tried |to |control |insurance |domiciled |from |
another |state.
- |U.S. |Supreme |Court |sided |against |insurance |company
- |Upholding |the |right |of |sate |to |regulate |insurance
- |States |WIN
United |States |v. |Southeastern |Underwriters |Association |(SEUA) |- |CORRECT |ANSWER✔✔-- |
Ruling |is |a |form |of |interstate |commerce
