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FLORIDA 2-15 INSURANCE LICENSE EXAM
QUESTIONS WITH COMPLETE SOLUTIONS
GUARANTEED PASS
Which of the following insurance concepts is founded on the ability to
predict the approximate number of deaths or frequency of disabilities
within a certain group during a specific time.
A. Principleof large loss
B. Quantum insurance principle
C. Indemnity law
D. Law of large numbers - CORRECT ANSWER>>Law of large numbers
The owner of a camera store is worried that her new employees may
help themselves to items from inventory without paying for them.
What kind of hazard is described.
A. Physical hazard
B. Ethical hazard
C. Morale hazard
D. Moral hazard - CORRECT ANSWER>>Moral hazard
All of the following actions are examples of risk avoidance EXCEPT
A. Bill won't fly in an airplane
,2
B. Wendy keeps her money out of the stock market
C. Pat pays his insurance premium
D. John never drives a car - CORRECT ANSWER>>Pat pays his insurance
premium
Which of the following statements is CORRECT
A. Only speculative risk is insurable
B. Only pure risk is insurable
C. Both pure risk and speculative risks are insurable
D. Neither pure risks nor speculative risks are insurable - CORRECT
ANSWER>>Only pure risk is insurable
Which of the following statements does NOT describe an element of an
insurable risk
A. The loss must not be due to chance
B. The loss must be definite and measurable
C. The loss cannot be catastrophic
D. The loss exposure to be insured must be large - CORRECT
ANSWER>>The loss must not be due to chance
In the insurance business, risk can best be defined as
A. sharingthe possibility of a loss
B. uncertainty regarding the future
C. uncertainty regarding financial loss
D. uncertainty regarding when death will occur - CORRECT
ANSWER>>uncertainty regarding financial loss
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Buying insurance is one of the most effective ways of
A. avoiding risk
B. transferring risk
C. reducing risk
D. retaining risk - CORRECT ANSWER>>transferring risk
Which of the following best describes the function of insurance
A. It is a form of legalized gambling
B. It spreads financial risk over a large group to minimize the loss to any
one individual
C. It protects against living too long
D. It creates and protects risk - CORRECT ANSWER>>It spread the
financial risk over a large group to minimize the loss to any one
individual
tornado is an example of
A. a physical hazard
B. a speculative risk
C. a peril
D. a moral hazard - CORRECT ANSWER>>a peril
Tom buys his wife Mary a $50,000 diamond ring. When she is not
wearing the ring, she keeps it in a safe deposit box at a local bank. This
is an example of risk
, 4
A. avoidance
B. reduction
C. retention
D. transference - CORRECT ANSWER>>reduction
Producers are expected to adhere to all of the following standards to
protect consumers and promote suitable sales EXCEPT
A. selling to customers needs
B. determining the suitability if recommended products
C. assessing prospects' financial ability to pay commissions
D. full and accurate disclosure - CORRECT ANSWER>>assessing
prospects' financial ability to pay commissions
An insurance company organized and based in Florida can be described
as what type of company in Florida
A. Alien
B. Home-based
C. Foreign
D. Domestic - CORRECT ANSWER>>Domestic
Which of the following statements regarding types of insurers is NOT
correct
A. Reinsurers usually deal with policy owners
B. Mutual insurance companies are "owned" by their policy owners
C. Stock insurance companies seek profit for their shareholders
FLORIDA 2-15 INSURANCE LICENSE EXAM
QUESTIONS WITH COMPLETE SOLUTIONS
GUARANTEED PASS
Which of the following insurance concepts is founded on the ability to
predict the approximate number of deaths or frequency of disabilities
within a certain group during a specific time.
A. Principleof large loss
B. Quantum insurance principle
C. Indemnity law
D. Law of large numbers - CORRECT ANSWER>>Law of large numbers
The owner of a camera store is worried that her new employees may
help themselves to items from inventory without paying for them.
What kind of hazard is described.
A. Physical hazard
B. Ethical hazard
C. Morale hazard
D. Moral hazard - CORRECT ANSWER>>Moral hazard
All of the following actions are examples of risk avoidance EXCEPT
A. Bill won't fly in an airplane
,2
B. Wendy keeps her money out of the stock market
C. Pat pays his insurance premium
D. John never drives a car - CORRECT ANSWER>>Pat pays his insurance
premium
Which of the following statements is CORRECT
A. Only speculative risk is insurable
B. Only pure risk is insurable
C. Both pure risk and speculative risks are insurable
D. Neither pure risks nor speculative risks are insurable - CORRECT
ANSWER>>Only pure risk is insurable
Which of the following statements does NOT describe an element of an
insurable risk
A. The loss must not be due to chance
B. The loss must be definite and measurable
C. The loss cannot be catastrophic
D. The loss exposure to be insured must be large - CORRECT
ANSWER>>The loss must not be due to chance
In the insurance business, risk can best be defined as
A. sharingthe possibility of a loss
B. uncertainty regarding the future
C. uncertainty regarding financial loss
D. uncertainty regarding when death will occur - CORRECT
ANSWER>>uncertainty regarding financial loss
,3
Buying insurance is one of the most effective ways of
A. avoiding risk
B. transferring risk
C. reducing risk
D. retaining risk - CORRECT ANSWER>>transferring risk
Which of the following best describes the function of insurance
A. It is a form of legalized gambling
B. It spreads financial risk over a large group to minimize the loss to any
one individual
C. It protects against living too long
D. It creates and protects risk - CORRECT ANSWER>>It spread the
financial risk over a large group to minimize the loss to any one
individual
tornado is an example of
A. a physical hazard
B. a speculative risk
C. a peril
D. a moral hazard - CORRECT ANSWER>>a peril
Tom buys his wife Mary a $50,000 diamond ring. When she is not
wearing the ring, she keeps it in a safe deposit box at a local bank. This
is an example of risk
, 4
A. avoidance
B. reduction
C. retention
D. transference - CORRECT ANSWER>>reduction
Producers are expected to adhere to all of the following standards to
protect consumers and promote suitable sales EXCEPT
A. selling to customers needs
B. determining the suitability if recommended products
C. assessing prospects' financial ability to pay commissions
D. full and accurate disclosure - CORRECT ANSWER>>assessing
prospects' financial ability to pay commissions
An insurance company organized and based in Florida can be described
as what type of company in Florida
A. Alien
B. Home-based
C. Foreign
D. Domestic - CORRECT ANSWER>>Domestic
Which of the following statements regarding types of insurers is NOT
correct
A. Reinsurers usually deal with policy owners
B. Mutual insurance companies are "owned" by their policy owners
C. Stock insurance companies seek profit for their shareholders
