California life insurance focus exam| 170
questions| with complete solutions
Which of the following determines the cash value of a variable life policy? Correct Answer: The
performance of the policy portfolio
What type of insurance would be used for a return of premium rider? Correct Answer:
Increasing term
All insurers doing business in California must maintain a department to investigate possible:
Correct Answer: Fraudulent claims by insureds
In the executive bonus plan who is the owner of the policy and who pays the premium? Correct
Answer: Executive is the owner and the executive pays the premium
What describes a situation when poor risks are balanced with preferred risks and average risks
are in the middle? Correct Answer: Profitable distribution of exposures
A policy owner fails to pay the premium due on his whole life policy after the grace period
passes but the policy remains in force. This is due to what provision? Correct Answer:
Automatic premium loan
An agent tries to sell insurance over the phone to an applicant who appears to be confused, but is
eventually able to give enough information for the applicationto be completed. After the policy
was issued, the agent talk to the insureds family, and they explained that the insured was
recovering from a surgery and might have been under the influence of medication at the time of
application. Which of the following is true? Correct Answer: The policy may be avoided if they
can be proven that the applicant was not capable of making a buying decision at the time of
application
And internal revenue code provision that specifically provides for an individual retirement plan
for public school teachers is a Correct Answer: 403B plan TSA
And insurance policy specifies that it will pay $600 for a specific loss. The policy owner suffers
a loss of $535. How much will the policy pay? Correct Answer: $535
What percentage of a company's employees must take part in a non-contributory group life plan?
Correct Answer: 100%
The importance of a misrepresentation is determined by Correct Answer: The materiality of a
given concealment
What is the benefit of choosing extended term as a nonforfeiture option? Correct Answer: It has
the highest amount of insurance protection
, The policy owner wants to make sure that upon his death the life policy will pay a portion of the
proceeds annually to a spouse, but that the principal will be paid to their children when they
reach a certain age. Which settlement options for the policy owner and choose? Correct Answer:
Interest only option
All of the following are true regarding a qualified annuity EXCEPT Correct Answer: At
distribution, all amounts received by the employee are tax-free
Which of the following statements best describes the effect the accelerated benefit provision
would have on the benefits paid to the beneficiary? Correct Answer: It will decrease the benefits
paid to the beneficiary
All of the following statements are true regarding installments for a fixed amount EXCEPT
Correct Answer: The payments Will stop when the annuitant dies
Which of the following is NOT true regarding policy loans? Correct Answer: Money borrowed
from the cash value is taxable
Using a class designation for beneficiaries means Correct Answer: Naming beneficiaries as a
group
When an insured makes truthful statements on the application for insurance and pays the
required premium it is known as which of the following? Correct Answer: Consideration
Contracts that are prepared by one party and submitted to the other on a take it or leave it basis
are classified as Correct Answer: Contracts of adhesion
A set of legal or regulatory conditions that affect an insurer's ability to collect premiums
commensurate with the level of risk incurred would be considered an Correct Answer: Legal
hazard
Which of the following is NOT a legitimate use of annuities by businesses Correct Answer:
Creating a tax shelter
Employer contributions made to a qualified plan Correct Answer: Are subject to vesting
requirements
An agent selling variable annuities must be registered with Correct Answer: FINRA
Which of the following would be considered a non-medical insurance application? Correct
Answer: An application on which the medical information is completed by the applicant and the
agent only
What is the penalty for IRA distributions that are below the required minimum for the year?
Correct Answer: 50%
questions| with complete solutions
Which of the following determines the cash value of a variable life policy? Correct Answer: The
performance of the policy portfolio
What type of insurance would be used for a return of premium rider? Correct Answer:
Increasing term
All insurers doing business in California must maintain a department to investigate possible:
Correct Answer: Fraudulent claims by insureds
In the executive bonus plan who is the owner of the policy and who pays the premium? Correct
Answer: Executive is the owner and the executive pays the premium
What describes a situation when poor risks are balanced with preferred risks and average risks
are in the middle? Correct Answer: Profitable distribution of exposures
A policy owner fails to pay the premium due on his whole life policy after the grace period
passes but the policy remains in force. This is due to what provision? Correct Answer:
Automatic premium loan
An agent tries to sell insurance over the phone to an applicant who appears to be confused, but is
eventually able to give enough information for the applicationto be completed. After the policy
was issued, the agent talk to the insureds family, and they explained that the insured was
recovering from a surgery and might have been under the influence of medication at the time of
application. Which of the following is true? Correct Answer: The policy may be avoided if they
can be proven that the applicant was not capable of making a buying decision at the time of
application
And internal revenue code provision that specifically provides for an individual retirement plan
for public school teachers is a Correct Answer: 403B plan TSA
And insurance policy specifies that it will pay $600 for a specific loss. The policy owner suffers
a loss of $535. How much will the policy pay? Correct Answer: $535
What percentage of a company's employees must take part in a non-contributory group life plan?
Correct Answer: 100%
The importance of a misrepresentation is determined by Correct Answer: The materiality of a
given concealment
What is the benefit of choosing extended term as a nonforfeiture option? Correct Answer: It has
the highest amount of insurance protection
, The policy owner wants to make sure that upon his death the life policy will pay a portion of the
proceeds annually to a spouse, but that the principal will be paid to their children when they
reach a certain age. Which settlement options for the policy owner and choose? Correct Answer:
Interest only option
All of the following are true regarding a qualified annuity EXCEPT Correct Answer: At
distribution, all amounts received by the employee are tax-free
Which of the following statements best describes the effect the accelerated benefit provision
would have on the benefits paid to the beneficiary? Correct Answer: It will decrease the benefits
paid to the beneficiary
All of the following statements are true regarding installments for a fixed amount EXCEPT
Correct Answer: The payments Will stop when the annuitant dies
Which of the following is NOT true regarding policy loans? Correct Answer: Money borrowed
from the cash value is taxable
Using a class designation for beneficiaries means Correct Answer: Naming beneficiaries as a
group
When an insured makes truthful statements on the application for insurance and pays the
required premium it is known as which of the following? Correct Answer: Consideration
Contracts that are prepared by one party and submitted to the other on a take it or leave it basis
are classified as Correct Answer: Contracts of adhesion
A set of legal or regulatory conditions that affect an insurer's ability to collect premiums
commensurate with the level of risk incurred would be considered an Correct Answer: Legal
hazard
Which of the following is NOT a legitimate use of annuities by businesses Correct Answer:
Creating a tax shelter
Employer contributions made to a qualified plan Correct Answer: Are subject to vesting
requirements
An agent selling variable annuities must be registered with Correct Answer: FINRA
Which of the following would be considered a non-medical insurance application? Correct
Answer: An application on which the medical information is completed by the applicant and the
agent only
What is the penalty for IRA distributions that are below the required minimum for the year?
Correct Answer: 50%
