CA LIFE INSURANCE
CA LIFE INSURANCE EXAM
(2025/2026) QUESTIONS AND
ANSWERS
What is meant by referring to an insurance policy as a unilateral contract? - Only one party
makes a legally enforceable promise.
When must insurance records of insurance agents and brokers be made available to the
Insurance Commissioner? - At all times.
Any situation that presents the possibility of a loss is known as - a loss exposure
Which of the following information is not required to be communicated in a Life insurance
contract? - Personal judgment.
The direct distribution of insurance utilizes all of the following to promote the sale of insurance
EXCEPT - telephone call from an agent.
A contract in which one party promises to indemnify another against loss that arises from an
unknown event is - an insurance policy.
All of the occurrences listed below are examples of an insurable event as defined by the
California Insurance Code EXCEPT - an insured suffers a financial loss in the state lottery
All of the following statements about aleatory contracts are true EXCEPT - the insured and
insurer contribute equally to the contract.
CA LIFE INSURANCE
,CA LIFE INSURANCE
All of the following would be considered unfair trade practices EXCEPT - 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? - Mary
Brown Insurance Services.
A contract of indemnity is one in which - one party is restored to the same financial position the
party was in before the loss occurred.
In insurance terminology, "indemnity" means - make whole.
As defined in the California insurance Code, "insurance" is a - 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? - 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? -
Fiduciary
Which of the following statements regarding risk is TRUE? - Only pure risks are insurable.
The purchase of an insurance policy may accomplish all of the following for the insured EXCEPT -
the elimination of risk.
Insureds are entitled to recover an amount NOT greater than the amount of their loss under the
principle of - indemnity.
CA LIFE INSURANCE
, CA LIFE INSURANCE
What rule is used to determine the importance of a representation? - The materiality of
concealment.
The required contents of a policy include all of the following EXCEPT - the probability of loss
All of the following are characteristics of reinsurance EXCEPT it - increases the unearned
premium reserve.
According to the California Insurance Code, an insurance policy must specify all of the following
EXCEPT the - 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 - 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 - probability of loss is unknown.
A situation in which there is a possibility of loss or a gain is a - speculative risk.
Why is having a large number of similar exposure units important to insurers? - 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 - eliminates fraudulent losses.
Who are members of the Medical information Bureau? - Life and health insurers.
CA LIFE INSURANCE
CA LIFE INSURANCE EXAM
(2025/2026) QUESTIONS AND
ANSWERS
What is meant by referring to an insurance policy as a unilateral contract? - Only one party
makes a legally enforceable promise.
When must insurance records of insurance agents and brokers be made available to the
Insurance Commissioner? - At all times.
Any situation that presents the possibility of a loss is known as - a loss exposure
Which of the following information is not required to be communicated in a Life insurance
contract? - Personal judgment.
The direct distribution of insurance utilizes all of the following to promote the sale of insurance
EXCEPT - telephone call from an agent.
A contract in which one party promises to indemnify another against loss that arises from an
unknown event is - an insurance policy.
All of the occurrences listed below are examples of an insurable event as defined by the
California Insurance Code EXCEPT - an insured suffers a financial loss in the state lottery
All of the following statements about aleatory contracts are true EXCEPT - the insured and
insurer contribute equally to the contract.
CA LIFE INSURANCE
,CA LIFE INSURANCE
All of the following would be considered unfair trade practices EXCEPT - 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? - Mary
Brown Insurance Services.
A contract of indemnity is one in which - one party is restored to the same financial position the
party was in before the loss occurred.
In insurance terminology, "indemnity" means - make whole.
As defined in the California insurance Code, "insurance" is a - 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? - 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? -
Fiduciary
Which of the following statements regarding risk is TRUE? - Only pure risks are insurable.
The purchase of an insurance policy may accomplish all of the following for the insured EXCEPT -
the elimination of risk.
Insureds are entitled to recover an amount NOT greater than the amount of their loss under the
principle of - indemnity.
CA LIFE INSURANCE
, CA LIFE INSURANCE
What rule is used to determine the importance of a representation? - The materiality of
concealment.
The required contents of a policy include all of the following EXCEPT - the probability of loss
All of the following are characteristics of reinsurance EXCEPT it - increases the unearned
premium reserve.
According to the California Insurance Code, an insurance policy must specify all of the following
EXCEPT the - 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 - 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 - probability of loss is unknown.
A situation in which there is a possibility of loss or a gain is a - speculative risk.
Why is having a large number of similar exposure units important to insurers? - 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 - eliminates fraudulent losses.
Who are members of the Medical information Bureau? - Life and health insurers.
CA LIFE INSURANCE
