CA LIFE AND HEALTH INSURANCE EXAM 3 LATEST VERSIONS
(VERSION A, B AND C) ACTUAL EXAM 350 QUESTIONS AND
CORRECT DETAILED ANSWERS
Question 1
During which period is a family's need for income typically at its greatest, after the insured has
died, leaving a surviving spouse with dependent children to support?
A) Retirement Period
B) Preretirement Period
C) Family Dependency Period
D) Blackout Period
E) Child-rearing Period
Correct Answer: C) Family Dependency Period
Rationale: The Family Dependency Period is the time when the surviving spouse
needs the most financial support due to having dependent children who rely on
their income.
Question 2
Which of the following would be least likely to be considered a legitimate need that would be
paid by life insurance proceeds?
A) Outstanding debt.
B) Mortgages.
C) Day-to-day living expenses.
D) Vacation travel expenses.
E) Funeral expenses.
,Correct Answer: D) Vacation travel expenses
Rationale: Life insurance is primarily designed to cover essential financial needs that
arise from the premature death of the insured. Vacation expenses are generally
considered a luxury, not a fundamental need.
Question 3
Which of the following is NOT a type of information that needs to be gathered to determine
the value of someone's life when using the needs approach?
A) Outstanding debt.
B) Mortgages.
C) Expenses.
D) Estimated longevity.
E) Income.
Correct Answer: D) Estimated longevity
Rationale: The Needs Approach focuses on the immediate and future financial needs
of a family if the insured were to die prematurely. Longevity (how long someone is
expected to live) is not a factor in this calculation; rather, it assumes premature
death.
Question 4
Which category encompasses final medical expenses of the insured, funeral expenses, and
ongoing family living expenses like rent, utilities, and groceries after a death?
A) Income replacement.
B) Investment losses.
, C) Costs associated with death.
D) Retirement planning.
E) Debt consolidation.
Correct Answer: C) Costs associated with death
Rationale: "Costs associated with death" include all immediate and ongoing expenses
incurred as a direct result of the insured's passing and the subsequent adjustment
period for the family.
Question 5
What is the "preretirement period" in the context of life insurance planning?
A) The period before any children are born.
B) The period after children are no longer dependent upon the surviving spouse for support,
but before the surviving spouse qualifies for Social Security benefits.
C) The period after the surviving spouse qualifies for Social Security benefits.
D) The period during which the insured is actively saving for retirement.
E) The period of time before the insured dies.
Correct Answer: B) Period after children are no longer dependent upon surviving
spouse for support, but before surviving spouse qualifies for social security benefits.
Rationale: This period is critical because the surviving spouse may not receive Social
Security blackout period benefits (which typically cease when the youngest child
reaches 16 and resume at age 60), creating a financial gap.
Question 6
Which approach to determining the value of an individual's life calculates their value by looking
(VERSION A, B AND C) ACTUAL EXAM 350 QUESTIONS AND
CORRECT DETAILED ANSWERS
Question 1
During which period is a family's need for income typically at its greatest, after the insured has
died, leaving a surviving spouse with dependent children to support?
A) Retirement Period
B) Preretirement Period
C) Family Dependency Period
D) Blackout Period
E) Child-rearing Period
Correct Answer: C) Family Dependency Period
Rationale: The Family Dependency Period is the time when the surviving spouse
needs the most financial support due to having dependent children who rely on
their income.
Question 2
Which of the following would be least likely to be considered a legitimate need that would be
paid by life insurance proceeds?
A) Outstanding debt.
B) Mortgages.
C) Day-to-day living expenses.
D) Vacation travel expenses.
E) Funeral expenses.
,Correct Answer: D) Vacation travel expenses
Rationale: Life insurance is primarily designed to cover essential financial needs that
arise from the premature death of the insured. Vacation expenses are generally
considered a luxury, not a fundamental need.
Question 3
Which of the following is NOT a type of information that needs to be gathered to determine
the value of someone's life when using the needs approach?
A) Outstanding debt.
B) Mortgages.
C) Expenses.
D) Estimated longevity.
E) Income.
Correct Answer: D) Estimated longevity
Rationale: The Needs Approach focuses on the immediate and future financial needs
of a family if the insured were to die prematurely. Longevity (how long someone is
expected to live) is not a factor in this calculation; rather, it assumes premature
death.
Question 4
Which category encompasses final medical expenses of the insured, funeral expenses, and
ongoing family living expenses like rent, utilities, and groceries after a death?
A) Income replacement.
B) Investment losses.
, C) Costs associated with death.
D) Retirement planning.
E) Debt consolidation.
Correct Answer: C) Costs associated with death
Rationale: "Costs associated with death" include all immediate and ongoing expenses
incurred as a direct result of the insured's passing and the subsequent adjustment
period for the family.
Question 5
What is the "preretirement period" in the context of life insurance planning?
A) The period before any children are born.
B) The period after children are no longer dependent upon the surviving spouse for support,
but before the surviving spouse qualifies for Social Security benefits.
C) The period after the surviving spouse qualifies for Social Security benefits.
D) The period during which the insured is actively saving for retirement.
E) The period of time before the insured dies.
Correct Answer: B) Period after children are no longer dependent upon surviving
spouse for support, but before surviving spouse qualifies for social security benefits.
Rationale: This period is critical because the surviving spouse may not receive Social
Security blackout period benefits (which typically cease when the youngest child
reaches 16 and resume at age 60), creating a financial gap.
Question 6
Which approach to determining the value of an individual's life calculates their value by looking
