CA LIFE INSURANCE EXAM

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CA LIFE INSURANCE EXAM

Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -99 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: Your client has just bought a new home which he has financed with a

$150,000, 7.5% interest, 30 -year bank loan. He would like to be sure that if he dies that the unpaid balance of the mortgage would be paid. He wants a policy that will cover the mortgage balance-no more, no less-anytime during the life of the mortgage. Which policy is designed to meet this need?

Answer:

Decreasing term policy.Question 2: What type of insurance policy provides a death benefit that matches the projected outstanding debt on an individual's home?

Answer:

Mortgage redemption.Question 3: Which type of insurance guarantees the right to renew the policy each year, regardless of health, but at an increased premium?

Answer:

Renewable term.

Question 4: Who are the members of the Medical Information Bureau?

Answer:

Life and Health insurers.

Question 5: The process by which an insurer decides whether to issue requested insurance is called

Answer:

underwriting.Question 6: Which two insurance products are commonly used to fund buy-sell agreements?

Answer:

Life insurance and disability insurance.Question 7: Upon notification of a claim, a claimant must be given access to the California Fair Claims Settlement Practices resolution by all of the following means EXCEPT

Answer:

by interview appointment with the agent of record.Question 8: According to the California Insurance Code, if an insurer's certificate of authority is revoked, the Commissioner can proceed with any of the following actions EXCEPT

Answer:

using Guarantee Funds to pay salaries.Question 9: A 10-year certain annuity with an installment refund is purchased. The annuitant dies after receiving monthly payments for 5 years. How many remaining payments will the insurer make?

Answer:

60 payments.

Question 10: Any situation that presents the possibility of a loss is known as

Answer:

a loss exposure Question 11: Loss retention is an effective risk management technique when all of the following conditions exist EXCEPT the

Answer:

probability of loss is unknown.

Question 12: Which of the following information is not required to be communicated in a Life insurance contract?

Answer:

Personal judgment.Question 13: A $50,000 whole life policy with a cash value of $10,000 has been in force for eleven years. The policyowner is unable to continue the premium payments. Which of the following describes the reduced paid-up nonfordeiture option?

Answer:

The cash value is used to select a $20,000 paid-up policy.

Question 14: In insurance terminology, "indemnity" means

Answer:

make whole.

Question 15: Which of the following statements regarding risk is TRUE?

Answer:

Only pure risks are insurable.Question 16: According to the California Insurance Code, governing the use of life insurance policy illustrations, the term illustration means

Answer:

a presentation of policy features that includes non-guaranteed elements.Question 17: The purchase of an insurance policy may accomplish all of the following for the insured EXCEPT

Answer:

the elimination of risk.Question 18: How often MUST an insurer file the National Association of Insurance Commissioners (NAIC) financial statement?

Answer:

Annually.

Question 19: What would a person be guilty of who refuses to deliver any books, records, or assets to the commissioner once a seizure order has been executed?

Answer:

A misdemeanor Question 20: A person owns a life annuity. He elects to receive his annuity payments monthly for the remainder of his life with "ten years certain". The annuity will make payments

Answer:

for a minimum of 120 months and a maximum of the remainder of his life.Question 21: How can partners guarantee a market for their share of the business in the event of death?

Answer:

Buy-sell agreements.Question 22: The additional premium charged by an insurer for adding the accidental death benefit to a whole life policy

Answer:

does not affect the policy's cash value.Question 23: All of the following statements about aleatory contracts are true EXCEPT

Answer:

the insured and insurer contribute equally to the contract.Question 24: All of the following qualify as "background information" as defined in Section 1729.2 of the California Insurance Code, EXCEPT

Answer:

misdemeanor charges filed, not resulting in a conviction.Question 25: People commonly purchase an annuity to protect against the risk of:

Answer:

outliving their financial resources.