CA Life Insurance Exam
What is meant by referring to an insurance policy as a unilateral contract? - correct
answer-Only one party makes a legally enforceable promise.
When must insurance records of insurance agents and brokers be made available to the
Insurance Commissioner? - correct answer-At all times.
Any situation that presents the possibility of a loss is known as - correct answer-a loss
exposure
Which of the following information is not required to be communicated in a Life insurance
contract? - correct answer-Personal judgment.
The direct distribution of insurance utilizes all of the following to promote the sale of
insurance EXCEPT - correct answer-telephone call from an agent.
A contract in which one party promises to indemnify another against loss that arises from an
unknown event is - correct answer-an insurance policy.
All of the occurrences listed below are examples of an insurable event as defined by the
California Insurance Code EXCEPT - correct answer-an insured suffers a financial loss in
the state lottery
All of the following statements about aleatory contracts are true EXCEPT - correct
answer-the insured and insurer contribute equally to the contract.
All of the following would be considered unfair trade practices EXCEPT - correct
answer-committing any act of discrimination whether it be deemed fair or unfair.
As authorized by the California Insurance Code, the Insurance Commissioner has provided
standards for names used by life insurance agents. Under these standards which, if any, of
the following are automatically acceptable for Mary Brown, a holder of the CLU designation?
- correct answer-Mary Brown Insurance Services.
A contract of indemnity is one in which - correct answer-one party is restored to the same
financial position the party was in before the loss occurred.
In insurance terminology, "indemnity" means - correct answer-make whole.
As defined in the California insurance Code, "insurance" is a - correct answer-contract.
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? - correct answer-A misdemeanor
, An agent who is acting as an insurance agent, broker, solicitor, life agent, accident and
health, or bail agent acts in which capacity when handling premiums or return premiums for
an insured? - correct answer-Fiduciary
Which of the following statements regarding risk is TRUE? - correct answer-Only pure risks
are insurable.
The purchase of an insurance policy may accomplish all of the following for the insured
EXCEPT - correct answer-the elimination of risk.
Insureds are entitled to recover an amount NOT greater than the amount of their loss under
the principle of - correct answer-indemnity.
What rule is used to determine the importance of a representation? - correct answer-The
materiality of concealment.
The required contents of a policy include all of the following EXCEPT - correct answer-the
probability of loss
All of the following are characteristics of reinsurance EXCEPT it - correct answer-increases
the unearned premium reserve.
According to the California Insurance Code, an insurance policy must specify all of the
following EXCEPT the - correct answer-financial rating of the insurer.
All of the following qualify as "background information" as defined in Section 1729.2 of the
California Insurance Code, EXCEPT - correct answer-misdemeanor charges filed, not
resulting in a conviction.
Loss retention is an effective risk management technique when all of the following conditions
exist EXCEPT the - correct answer-probability of loss is unknown.
A situation in which there is a possibility of loss or a gain is a - correct answer-speculative
risk.
Why is having a large number of similar exposure units important to insurers? - correct
answer-The greater the number insured, the more accurately the insurer can predict losses
and set appropriate premiums.
All of the following are benefits of insurance EXCEPT it - correct answer-eliminates
fraudulent losses.
Who are members of the Medical information Bureau? - correct answer-Life and health
insurers.
The process by which an insurer decides whether to issue requested insurance is called -
correct answer-underwriting.
What is meant by referring to an insurance policy as a unilateral contract? - correct
answer-Only one party makes a legally enforceable promise.
When must insurance records of insurance agents and brokers be made available to the
Insurance Commissioner? - correct answer-At all times.
Any situation that presents the possibility of a loss is known as - correct answer-a loss
exposure
Which of the following information is not required to be communicated in a Life insurance
contract? - correct answer-Personal judgment.
The direct distribution of insurance utilizes all of the following to promote the sale of
insurance EXCEPT - correct answer-telephone call from an agent.
A contract in which one party promises to indemnify another against loss that arises from an
unknown event is - correct answer-an insurance policy.
All of the occurrences listed below are examples of an insurable event as defined by the
California Insurance Code EXCEPT - correct answer-an insured suffers a financial loss in
the state lottery
All of the following statements about aleatory contracts are true EXCEPT - correct
answer-the insured and insurer contribute equally to the contract.
All of the following would be considered unfair trade practices EXCEPT - correct
answer-committing any act of discrimination whether it be deemed fair or unfair.
As authorized by the California Insurance Code, the Insurance Commissioner has provided
standards for names used by life insurance agents. Under these standards which, if any, of
the following are automatically acceptable for Mary Brown, a holder of the CLU designation?
- correct answer-Mary Brown Insurance Services.
A contract of indemnity is one in which - correct answer-one party is restored to the same
financial position the party was in before the loss occurred.
In insurance terminology, "indemnity" means - correct answer-make whole.
As defined in the California insurance Code, "insurance" is a - correct answer-contract.
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? - correct answer-A misdemeanor
, An agent who is acting as an insurance agent, broker, solicitor, life agent, accident and
health, or bail agent acts in which capacity when handling premiums or return premiums for
an insured? - correct answer-Fiduciary
Which of the following statements regarding risk is TRUE? - correct answer-Only pure risks
are insurable.
The purchase of an insurance policy may accomplish all of the following for the insured
EXCEPT - correct answer-the elimination of risk.
Insureds are entitled to recover an amount NOT greater than the amount of their loss under
the principle of - correct answer-indemnity.
What rule is used to determine the importance of a representation? - correct answer-The
materiality of concealment.
The required contents of a policy include all of the following EXCEPT - correct answer-the
probability of loss
All of the following are characteristics of reinsurance EXCEPT it - correct answer-increases
the unearned premium reserve.
According to the California Insurance Code, an insurance policy must specify all of the
following EXCEPT the - correct answer-financial rating of the insurer.
All of the following qualify as "background information" as defined in Section 1729.2 of the
California Insurance Code, EXCEPT - correct answer-misdemeanor charges filed, not
resulting in a conviction.
Loss retention is an effective risk management technique when all of the following conditions
exist EXCEPT the - correct answer-probability of loss is unknown.
A situation in which there is a possibility of loss or a gain is a - correct answer-speculative
risk.
Why is having a large number of similar exposure units important to insurers? - correct
answer-The greater the number insured, the more accurately the insurer can predict losses
and set appropriate premiums.
All of the following are benefits of insurance EXCEPT it - correct answer-eliminates
fraudulent losses.
Who are members of the Medical information Bureau? - correct answer-Life and health
insurers.
The process by which an insurer decides whether to issue requested insurance is called -
correct answer-underwriting.
