California Life, Accident and Health Cram Course Exam 1-3
California Life, Accident and Health
Cram Course Exam 1-3, (129 Real Exam
Questions Arranged in Random Order)
with correct Answers & Detailed
Explanations 2023-2024.
,California Life, Accident and Health Cram Course Exam 1-3
Question #90476
Carol is injured driving a company car at work. Her Health insurance coverage:
A Provides excess or supplementary coverage
B Will provide coverage on a pro-rata basis with Workers Compensation
C Will cover her injuries
D Will not cover her since this is an occupational injury - Answer: D
Explanation:
Most Health insurance provides 'non-occupational' (off the job) coverage for
sickness or injury, meaning that occupational coverage is excluded. However, if a
person is not required to be covered by Workers Compensation, some Health
policies will cover both on and off the job, which is known as 'occupational'
coverage.
Question #90486
The minimum participation percentage for large group insurance under the
California code is:
A50%
B40%
,California Life, Accident and Health Cram Course Exam 1-3
C75%
D25% - Answer: C
Explanation:
The California Insurance Code requires a 75% minimum participation percentage
for large group Life insurance.
Question #90409
All of the following are classified as Life insurance EXCEPT:
A Whole life
B Term
C Endowment
D Accidental Death & Dismemberment (AD&D) - Answer: D
Explanation:
AD&D is a type of Disability (Health) insurance, not Life.
Question #90464
A client invests $50,000 in after-tax dollars into a deferred annuity over a period of
time. When he annuitizes, he will receive $4,000 a year over his projected life
span. If his total return is expected to be $100,000, how much of the client's
$4,000 annual annuity pay-out will be taxable each year for the first 10 years:
, California Life, Accident and Health Cram Course Exam 1-3
A$800
B None
C$4,000
D$2,000 - Answer: D
Explanation:
The client has $100,000 in his account, of which $50,000 is his own money, which
was contributed with after-tax dollars. Since his contributions will be returned tax
free and since they make up half of his account value, only half of his annual pay-
out (the earnings portion) will be taxable as ordinary income. Further, you can find
his projected life span by dividing the $100,000 total by his $4,000 annual pay-out,
which would be 25 years. After 25 years, he will have recovered all of his own
contributions, so the entire $4,000 would be taxable. Remember, annuity payouts
are for life.
Question #90470
Which of the following is true regarding 'speculative' risk:
A There is no chance for gain
B It has a chance for gain or loss
C It is insurable
D It has a chance for loss only - Answer: B
Explanation:
California Life, Accident and Health
Cram Course Exam 1-3, (129 Real Exam
Questions Arranged in Random Order)
with correct Answers & Detailed
Explanations 2023-2024.
,California Life, Accident and Health Cram Course Exam 1-3
Question #90476
Carol is injured driving a company car at work. Her Health insurance coverage:
A Provides excess or supplementary coverage
B Will provide coverage on a pro-rata basis with Workers Compensation
C Will cover her injuries
D Will not cover her since this is an occupational injury - Answer: D
Explanation:
Most Health insurance provides 'non-occupational' (off the job) coverage for
sickness or injury, meaning that occupational coverage is excluded. However, if a
person is not required to be covered by Workers Compensation, some Health
policies will cover both on and off the job, which is known as 'occupational'
coverage.
Question #90486
The minimum participation percentage for large group insurance under the
California code is:
A50%
B40%
,California Life, Accident and Health Cram Course Exam 1-3
C75%
D25% - Answer: C
Explanation:
The California Insurance Code requires a 75% minimum participation percentage
for large group Life insurance.
Question #90409
All of the following are classified as Life insurance EXCEPT:
A Whole life
B Term
C Endowment
D Accidental Death & Dismemberment (AD&D) - Answer: D
Explanation:
AD&D is a type of Disability (Health) insurance, not Life.
Question #90464
A client invests $50,000 in after-tax dollars into a deferred annuity over a period of
time. When he annuitizes, he will receive $4,000 a year over his projected life
span. If his total return is expected to be $100,000, how much of the client's
$4,000 annual annuity pay-out will be taxable each year for the first 10 years:
, California Life, Accident and Health Cram Course Exam 1-3
A$800
B None
C$4,000
D$2,000 - Answer: D
Explanation:
The client has $100,000 in his account, of which $50,000 is his own money, which
was contributed with after-tax dollars. Since his contributions will be returned tax
free and since they make up half of his account value, only half of his annual pay-
out (the earnings portion) will be taxable as ordinary income. Further, you can find
his projected life span by dividing the $100,000 total by his $4,000 annual pay-out,
which would be 25 years. After 25 years, he will have recovered all of his own
contributions, so the entire $4,000 would be taxable. Remember, annuity payouts
are for life.
Question #90470
Which of the following is true regarding 'speculative' risk:
A There is no chance for gain
B It has a chance for gain or loss
C It is insurable
D It has a chance for loss only - Answer: B
Explanation:
