Question: Which Unfair Trade Practice involves making a false statement on an insurance application in order to receive money from an insurer?

Answer: Misrepresentation

Question: Who owns a stock company?

Answer: A stock insurance company is owned by its stockholders.

Question: In Florida, which of the following is considered an Unfair Trade Practice?

Answer: Coercion

Question: Which of these options can an individual use their medical flexible spending account to pay for?

Answer: Prescription drugs are an allowable expense when paid for by a medical flexible spending account.

Question: Which of the following features of a group Term Life policy enables an individual to leave the group and continue his or her insurance without providing evidence of insurability?

Answer: The conversion privilege allows an individual to leave the group term plan and continue his or her insurance without providing evidence of insurability.

Question: An example of false advertising would be

Answer: An insurer exaggerating its dividends in a magazine advertisement

Question: Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of unequal values reflects which of the following insurance contract features?

Answer: Aleatory.

Insurance contracts are aleatory in that the amount the insured will pay in premiums is unequal to the amount that the insurer will pay in the event of a loss.

Question: An example of an unfair trade practice is

Answer: Making a material misrepresentation to an insured is considered to be an unfair trade practice.

Question: How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy?

Answer: A contingent beneficiary will receive the policy proceeds if the primary beneficiary dies before the insured’s death.

Question: Which of these terms accurately defines an underwriter’s assessment of information on a life insurance application?

Answer: Risk classification.

Underwriting, another term for risk selection, is the process of reviewing the many characteristics that make up the risk profile of an applicant to determine if the applicant is insurable and, if so, at standard or substandard rates.