1|Page
FX CA LIFE AND HEALTH EXAM QUESTIONS AND
ANSWERS (A+ SOLUTION GUIDE) (2026)
Insurance ......ANSWER......Contract whereby one undertakes to
indemnify another against loss, damage, or liabilty arising from a
unknown event.
Insurer ......ANSWER......Any person capable of making a contract;
subject to restrictions imposed by the CA insurance code.
Speculative risk ......ANSWER......Chance of loss and potential for gain.
This risk is not insurable.
Hazard ......ANSWER......Increase the risk.
Law of Large numbers ......ANSWER......The more similar risks the better
they can guess approx. how many losses they have in a given time
period.
Loss exposure ......ANSWER......Situation the presents the possibility of a
loss
Doctrine of upmost good faith states ......ANSWER......That all parities to
the contract can rely upon statements of other parties.
pg. 1
,2|Page
Policy ......ANSWER......Written instrument in witch a contract is set forth
Premium ......ANSWER......Amount insured paid to the insurer for
coverage.
Rate ......ANSWER......Price of insurance for each exposure unit
Rate ......ANSWER......Cost per exposure unit
How to determine the amount the insured will pay
......ANSWER......Multiply the rate by the number of exposure units
purchased.
express warranty ......ANSWER......Statement of fact in a policy of a
matter relating to the person/thing insured
Warranty ......ANSWER......May be expressed or applied
Implied warranty ......ANSWER......Representation in an insurance
contract
Representation pt1 ......ANSWER......May be oral /written may be made
@ time of/before the insurance policy
pg. 2
,3|Page
Representation is false when ......ANSWER......Facts fail to correspond
with its stipulations
False representation on a signed claim ......ANSWER......May subject the
insured to perjury
Concealment ......ANSWER......Party fails to communicate that witch a
party knows and ought to communicate so the other party can make a
sound decision
Concealment intentional / unintentional ......ANSWER......Entitles the
injured party to rescind the contract.
Rescind a policy ......ANSWER......Void or cancel policy flat by returning
all premiums to the insured. It is as if the policy never existed no
coverage applies.
Insurance applicant ......ANSWER......Individual who is applying to
purchase insurance
Life insurance creates a ......ANSWER......Immediate estate upon death
of insured in that the death benefit will be paid to the beneficiary
Insurable Interest ......ANSWER......Must exist @ time if application
pg. 3
, 4|Page
Key person life insurance ......ANSWER......Is used by a business to
protect itself on case a valued employee dies. Death Benefit is paid to
the company to hire and train replacement.
Key person life insurance is tax ......ANSWER......Deductible but benefits
are not taxable
Purchasing life insurance to fund a buy/sell agreement
......ANSWER......Is a business use not personal use
Under CIC all ads, policies for certificates of term life sold to those 55
yrs + must include a ......ANSWER......Term life insurance monetary value
index
In event of an adverse underwriting decision the insurer or agent must
......ANSWER......Provide a individual with the specific reason for the
decision and a summary of his/her rights.
Preferred Risk ......ANSWER......Exceptional body no health issues.
Lowest risk
Preferred risk provides the lowest premium ......ANSWER......As they
pose the least risk to insurer
pg. 4
FX CA LIFE AND HEALTH EXAM QUESTIONS AND
ANSWERS (A+ SOLUTION GUIDE) (2026)
Insurance ......ANSWER......Contract whereby one undertakes to
indemnify another against loss, damage, or liabilty arising from a
unknown event.
Insurer ......ANSWER......Any person capable of making a contract;
subject to restrictions imposed by the CA insurance code.
Speculative risk ......ANSWER......Chance of loss and potential for gain.
This risk is not insurable.
Hazard ......ANSWER......Increase the risk.
Law of Large numbers ......ANSWER......The more similar risks the better
they can guess approx. how many losses they have in a given time
period.
Loss exposure ......ANSWER......Situation the presents the possibility of a
loss
Doctrine of upmost good faith states ......ANSWER......That all parities to
the contract can rely upon statements of other parties.
pg. 1
,2|Page
Policy ......ANSWER......Written instrument in witch a contract is set forth
Premium ......ANSWER......Amount insured paid to the insurer for
coverage.
Rate ......ANSWER......Price of insurance for each exposure unit
Rate ......ANSWER......Cost per exposure unit
How to determine the amount the insured will pay
......ANSWER......Multiply the rate by the number of exposure units
purchased.
express warranty ......ANSWER......Statement of fact in a policy of a
matter relating to the person/thing insured
Warranty ......ANSWER......May be expressed or applied
Implied warranty ......ANSWER......Representation in an insurance
contract
Representation pt1 ......ANSWER......May be oral /written may be made
@ time of/before the insurance policy
pg. 2
,3|Page
Representation is false when ......ANSWER......Facts fail to correspond
with its stipulations
False representation on a signed claim ......ANSWER......May subject the
insured to perjury
Concealment ......ANSWER......Party fails to communicate that witch a
party knows and ought to communicate so the other party can make a
sound decision
Concealment intentional / unintentional ......ANSWER......Entitles the
injured party to rescind the contract.
Rescind a policy ......ANSWER......Void or cancel policy flat by returning
all premiums to the insured. It is as if the policy never existed no
coverage applies.
Insurance applicant ......ANSWER......Individual who is applying to
purchase insurance
Life insurance creates a ......ANSWER......Immediate estate upon death
of insured in that the death benefit will be paid to the beneficiary
Insurable Interest ......ANSWER......Must exist @ time if application
pg. 3
, 4|Page
Key person life insurance ......ANSWER......Is used by a business to
protect itself on case a valued employee dies. Death Benefit is paid to
the company to hire and train replacement.
Key person life insurance is tax ......ANSWER......Deductible but benefits
are not taxable
Purchasing life insurance to fund a buy/sell agreement
......ANSWER......Is a business use not personal use
Under CIC all ads, policies for certificates of term life sold to those 55
yrs + must include a ......ANSWER......Term life insurance monetary value
index
In event of an adverse underwriting decision the insurer or agent must
......ANSWER......Provide a individual with the specific reason for the
decision and a summary of his/her rights.
Preferred Risk ......ANSWER......Exceptional body no health issues.
Lowest risk
Preferred risk provides the lowest premium ......ANSWER......As they
pose the least risk to insurer
pg. 4
