CALIFORNIA LIFE ONLY LIFE
INSURANCE STATE EXAM
Which of the following pieces of information is NOT gathered during the personal financial
planning process? - correct answer-"An individual's civic organization memberships" are
NOT gathered. An individual's expenses, assets, and income. All of these pieces of
information are normally gathered during the personal financial planning process
A life insurance policy'slimit of liabilitv would be - correct answer-"the policy's face amount".
The face amournt of the policy is the limit of liability in a life insurance policy.
The California Insurance Code allows an individual how many days to cancel a life policy for
a full-refund? - correct answer-Between 10 and 30 days.
Every policy of individual life insurance shall have a notice stating that after receipt of the
policy by the owner, the policy may be returned by the owner for cancellation by delivering it
or mailing it to the insurer or to the agent through whom it was purchased. This period shall
not be less than 10 days nor more than 30 days.
Which of the following is NOT characteristic of the conversion privilęge? - correct
answer-"Employer pays the premium for the converted policy".
Proof of insurance ability is not required, conversion must take place within 31 days of
employment termination, ex-employee pays the premium for the converted policy all of these
about the conversion privilege are true EXCEPT "Employer pays the premium for the
converted policy".
Which of the following is NOT a common life insurance policy rider? - correct
answer-accidental death
waiver of premium
automatic premium loan
extended term
ANSWER
"Extended term" is not considered a life insurance rider.
Which type of jurisdiction requires an insurer to have its rates accepted by the Insurance
Department prior to using them? - correct answer-"Prior approval". A prior approval state
requires that an insurance company receives approval for a new insurance rate before it is
sent to the public.
What is the insurance term the State of California uses for an insurer that is eligible to
transact business in this state? - correct answer-The insurance term for an insurer which has
met the conditions required to transact business in the State of California is "admitted".
sa the systematic liquidation of a sum money is provided by a(n) - correct answer-"annuity".
An annuity contract provides for the systematic liquidation of a fund. mething
,A person who asserts a right of recovery under an insurance policy is called - correct
answer-Claimant.
As defined by the California Code of Regulations, a person who asserts a right of recovery
under an insurance policy is called the claimant.
How are acts of war and aviation treated under a group life insurance policy? - correct
answer-"Policy exclusions". Under a group life insurance policy, acts of war are considered a
policy exclusion.
Mike and Ike are 30 year old identical twins. Both are in excellent health. Each brother
purchases a life policy that has a $750 annual premium. Mike buys a 10-year renewable
term policy. Ike purchases a whole life policy. All of the following statements are true
EXCEPT - correct answer-Mike has the option of using his cash value to purchase a
reduced amount or paid up whole life insurance.
TRUE STATEMENTS:
-Mike's policy will develop no cash value over the policy's term
-Ike will have a level premium
-Ike may eventually take out a policy loan
Since a term policy provides for no cash value, there are no nonforfeiture
Paul has an existing annuity and is sold a new one, in which the new policy holds no greater
financial benefit to him than the existing contract. This is considered a(n) - correct
answer-unnecessary replacement
This is an example of unnecessary replacement.
Most U.S. life insurance companies belong to the - correct answer-"Medical Information
Bureau". Nearly every life insurer in the United States belongs to the Medical Information
Bureau.
What is the proper order of initial life insurance premiums, from lowest to. highest? - correct
answer-Modified premium, ordinary life, single premium". The order of initial premiums for
life insurance policies, from lowest to highest, is the following: modified premium, ordinary
life, single premium.
An applicant has revealed conditions that require more information. Which of the following is
needed next? - correct answer-"Attending physician's statement". An attending physician's
statement (APS) is needed in cases in which the individual application and/or medical
reports reveal conditions of which more info is required. The applicant must sign a written
release to enable a release of the APS
What does a policyowner NOT have a right to change? - correct answer-"Dividend
schedule".
Benificiary
Payment mode
, Dividend option
are considered rights of a policyowner EXCEPT the right to change the dividend schedule.
What area of group health insurance is regulated under the Employee Retirement Security
Act of 1974 (ERISA)? - correct answer-"Disclosure and reporting". The Employee
Retirement Security Act of 1974 (ERISA) regulates group health insurance in the area of
disclosure and reporting.
Life insurance creates an immediate estate. This phrase means: - correct answer-"when the
insured dies, a death benefit is paid". Life insurance creates an immediate estate by paying
a death benefit whenever the insured dies.
According to the California Insurance Code, what is the maximum penalty per violation for
anyone who unwillfully commits an unfair method of competition? - correct answer-$5,000
Any person who unwillfully engages in an unfair method of competition is liable to the state
for a fine of up to $5,000 per violation. If the act is determined to be willful, the fine will not
exceed $10,000 per act.
What distinguishes a deferred annuity from an immediate annuity? - correct answer-"The
time at which benefit payments start". The difference between deferred and immediate
annuities is when annuity benefit payments begin.
A terminated employee that has exercised the conversion privilege is able to convert -
correct answer-term insurance into permanent insurance.
The conversion privilege allows a terminated employee to convert term insurance into
permanent insurance.
What is NOT a requirement for a terminated employee that has exercised the conversion
privilege? - correct answer-"Provide proof of insurability".
A terminating employee who wants to exercise the conversion privilege must meet all of
these requirements:
-premium must be paid
-covert within 30 days
-convert up to the previous amount of group coverage
At what age is a surviving spouse without dependents eligible for Social Security survivor
benefits? - correct answer-"60"
Reduced widow or widower benefits can be received as early as age 60.
The Medical Information Bureau consists of - correct answer-Life and health insurers are
members of the Medical Information Bureau.
What is NOT a feature of equity-indexed annuities? - correct answer-Offers a maximum
interest rate that increases annually
Equity indexed annuities offer:
INSURANCE STATE EXAM
Which of the following pieces of information is NOT gathered during the personal financial
planning process? - correct answer-"An individual's civic organization memberships" are
NOT gathered. An individual's expenses, assets, and income. All of these pieces of
information are normally gathered during the personal financial planning process
A life insurance policy'slimit of liabilitv would be - correct answer-"the policy's face amount".
The face amournt of the policy is the limit of liability in a life insurance policy.
The California Insurance Code allows an individual how many days to cancel a life policy for
a full-refund? - correct answer-Between 10 and 30 days.
Every policy of individual life insurance shall have a notice stating that after receipt of the
policy by the owner, the policy may be returned by the owner for cancellation by delivering it
or mailing it to the insurer or to the agent through whom it was purchased. This period shall
not be less than 10 days nor more than 30 days.
Which of the following is NOT characteristic of the conversion privilęge? - correct
answer-"Employer pays the premium for the converted policy".
Proof of insurance ability is not required, conversion must take place within 31 days of
employment termination, ex-employee pays the premium for the converted policy all of these
about the conversion privilege are true EXCEPT "Employer pays the premium for the
converted policy".
Which of the following is NOT a common life insurance policy rider? - correct
answer-accidental death
waiver of premium
automatic premium loan
extended term
ANSWER
"Extended term" is not considered a life insurance rider.
Which type of jurisdiction requires an insurer to have its rates accepted by the Insurance
Department prior to using them? - correct answer-"Prior approval". A prior approval state
requires that an insurance company receives approval for a new insurance rate before it is
sent to the public.
What is the insurance term the State of California uses for an insurer that is eligible to
transact business in this state? - correct answer-The insurance term for an insurer which has
met the conditions required to transact business in the State of California is "admitted".
sa the systematic liquidation of a sum money is provided by a(n) - correct answer-"annuity".
An annuity contract provides for the systematic liquidation of a fund. mething
,A person who asserts a right of recovery under an insurance policy is called - correct
answer-Claimant.
As defined by the California Code of Regulations, a person who asserts a right of recovery
under an insurance policy is called the claimant.
How are acts of war and aviation treated under a group life insurance policy? - correct
answer-"Policy exclusions". Under a group life insurance policy, acts of war are considered a
policy exclusion.
Mike and Ike are 30 year old identical twins. Both are in excellent health. Each brother
purchases a life policy that has a $750 annual premium. Mike buys a 10-year renewable
term policy. Ike purchases a whole life policy. All of the following statements are true
EXCEPT - correct answer-Mike has the option of using his cash value to purchase a
reduced amount or paid up whole life insurance.
TRUE STATEMENTS:
-Mike's policy will develop no cash value over the policy's term
-Ike will have a level premium
-Ike may eventually take out a policy loan
Since a term policy provides for no cash value, there are no nonforfeiture
Paul has an existing annuity and is sold a new one, in which the new policy holds no greater
financial benefit to him than the existing contract. This is considered a(n) - correct
answer-unnecessary replacement
This is an example of unnecessary replacement.
Most U.S. life insurance companies belong to the - correct answer-"Medical Information
Bureau". Nearly every life insurer in the United States belongs to the Medical Information
Bureau.
What is the proper order of initial life insurance premiums, from lowest to. highest? - correct
answer-Modified premium, ordinary life, single premium". The order of initial premiums for
life insurance policies, from lowest to highest, is the following: modified premium, ordinary
life, single premium.
An applicant has revealed conditions that require more information. Which of the following is
needed next? - correct answer-"Attending physician's statement". An attending physician's
statement (APS) is needed in cases in which the individual application and/or medical
reports reveal conditions of which more info is required. The applicant must sign a written
release to enable a release of the APS
What does a policyowner NOT have a right to change? - correct answer-"Dividend
schedule".
Benificiary
Payment mode
, Dividend option
are considered rights of a policyowner EXCEPT the right to change the dividend schedule.
What area of group health insurance is regulated under the Employee Retirement Security
Act of 1974 (ERISA)? - correct answer-"Disclosure and reporting". The Employee
Retirement Security Act of 1974 (ERISA) regulates group health insurance in the area of
disclosure and reporting.
Life insurance creates an immediate estate. This phrase means: - correct answer-"when the
insured dies, a death benefit is paid". Life insurance creates an immediate estate by paying
a death benefit whenever the insured dies.
According to the California Insurance Code, what is the maximum penalty per violation for
anyone who unwillfully commits an unfair method of competition? - correct answer-$5,000
Any person who unwillfully engages in an unfair method of competition is liable to the state
for a fine of up to $5,000 per violation. If the act is determined to be willful, the fine will not
exceed $10,000 per act.
What distinguishes a deferred annuity from an immediate annuity? - correct answer-"The
time at which benefit payments start". The difference between deferred and immediate
annuities is when annuity benefit payments begin.
A terminated employee that has exercised the conversion privilege is able to convert -
correct answer-term insurance into permanent insurance.
The conversion privilege allows a terminated employee to convert term insurance into
permanent insurance.
What is NOT a requirement for a terminated employee that has exercised the conversion
privilege? - correct answer-"Provide proof of insurability".
A terminating employee who wants to exercise the conversion privilege must meet all of
these requirements:
-premium must be paid
-covert within 30 days
-convert up to the previous amount of group coverage
At what age is a surviving spouse without dependents eligible for Social Security survivor
benefits? - correct answer-"60"
Reduced widow or widower benefits can be received as early as age 60.
The Medical Information Bureau consists of - correct answer-Life and health insurers are
members of the Medical Information Bureau.
What is NOT a feature of equity-indexed annuities? - correct answer-Offers a maximum
interest rate that increases annually
Equity indexed annuities offer:
