CA Life Insurance Exam Questions and Answers |
Certified
/. An insurer that operates for one or more social, educational, charitable, benevolent, or
religious purposes for the benefit of its members is known as a
a) Reciprocal insurer.
b) Stock insurer.
c) Fraternal insurer.
d) Mutual insurer. - Answer-✅C
/.Life insurance creates an immediate estate. Which of the following best explains this
statement?
The policy has cash values and nonforfeiture values.
b) The policy generates immediate cash value.
c) The death benefit will always be paid to the estate of the insured.
d) The face value of the policy is payable to the beneficiary upon the death of the
insured. - Answer-✅D
/.Which of the following is guaranteed under a variable whole life insurance policy?
a) Minimum death benefit
b) Interest rates
c) Cash value
d) Stock performance - Answer-✅A
/.Which of the following is NOT true regarding a deferred annuity?
a) The annuity grows tax deferred.
b) Income payments begin within 1 year from the date of purchase.
c) It is used to accumulate funds for retirement.
d) It can be purchased with a single lump sum. - Answer-✅B
/.Joe, age 63, was disabled and can no longer work. He meets the Social Security
definition of total disability. How many work credits must Joe have accumulated to have
the status of fully insured?
a) 20
b) 40
c) 10
d) 6 - Answer-✅B
/.All of the following are advantages of a qualified retirement plan EXCEPT
a) The contribution is not taxable to the employee when made.
b) The funds grow tax deferred.
,c) The income at retirement is tax free.
d) The contribution is deductible to the employer. - Answer-✅C
/.If an insured purchases an insurance policy with a large deductible, what risk
management technique is the insured exercising?
a) Avoidance
b) Sharing
c) Retention
d) Transfer only - Answer-✅C
/.Key person insurance can provide protection for all of the following economic losses to
a business EXCEPT
a) Fund the cost of training a current employee to perform the duties of a deceased
employee.
b) Pay the death benefit to the estate of the insured.
c) Provide deferred compensation retirement benefit if the insured key person survives
to retirement.
d) Fund the expense of finding a suitable replacement following the death of an
employee. - Answer-✅B
/.According to the Common Disaster clause, if the insured and primary beneficiary are
killed in the same accident and it cannot be determined who died first, which of the
following will be assumed?
a) The estate of the primary beneficiary and the contingent beneficiary split benefits
equally.
b) The insured died before the primary beneficiary.
c) The primary beneficiary died before the insured.
d) The deaths occurred at the same time. - Answer-✅C
/.Any person to whom the Commissioner has issued a seizure order and who refuses to
deliver any books, records, or assets of an insurer faces the following penalties:
a) A misdemeanor punishable by a fine up to $1,000, a year in jail, or both.
b) A misdemeanor punishable by a $5,000 fine, if unintentional, or $10,000, if
intentional.
c) Administrative fines only.
d) A felony punishable by a fine up to $1,000, a year in prison, or both. - Answer-✅A
/.If an individual willfully violates provisions of the Fair Credit Reporting Act, what is the
maximum civil penalty?
a) $1,000
b) $2,500
c) $5,000
d) $10,000 - Answer-✅B
/.What type of insurer uses a formal sharing agreement?
a) Stock insurers
,b) Mutual insurers
c) Fraternal Benefit Societies
d) Reciprocal insurers - Answer-✅D
/.In the Social Security blackout period, the surviving spouse will not receive benefits
until the age of
a) 59 1/2.
b) 60.
c) 65.
d) 70 1/2 - Answer-✅B
/.Which of the following is NOT a component of an insurance policy premium?
a) Insurer expenses
b) Investment return
c) Number of beneficiaries
d) Mortality cost - Answer-✅C
/.An insured intentionally did not disclose a material fact on an application for insurance.
This would be considered
a) Misrepresentation.
b) Concealment.
c) Coercion.
d) Avoidance. - Answer-✅B
/.As an insurer's field underwriter, a producer has all of the following responsibilities
EXCEPT
a) Issuing policies on behalf of the insurer.
b) Completing applications.
c) Soliciting insurance contracts.
d) Collecting premiums. - Answer-✅A
/.According to the life insurance replacement regulations, which of the following would
be an example of policy replacement?
a) A term policy expires, and the insured buys another term life policy.
b) Term insurance is changed to a Whole Life policy.
c) A lapsed policy is reinstated within a specific timeframe.
d) A policy is reissued with a reduction in cash value. - Answer-✅D
/.Guaranteeing future dividends is considered to be an unfair or deceptive act known as
a) Misrepresentation.
b) Twisting.
c) False financial statements.
d) Rebating. - Answer-✅A
/.At what point would an automatic premium loan be generated?
, a) Upon the surrender of the policy
b) Following the grace period
c) Upon the insured's death
d) Once the policy is delivered - Answer-✅B
/.All of the following are true regarding the waiver of cost of insurance rider EXCEPT
a) The rider waives insurance costs in the event the insured becomes disabled.
b) The rider is only applicable to universal life policies.
c) The rider cannot waive the cost of premiums that accumulate cash value.
d) The rider expires when the insured reaches age 60. - Answer-✅D
/.All of the following are true of the Survivorship Life policy EXCEPT
a) It can insure more than 2 lives.
b) The premium is based on the age of each insured.
c) The death benefit is not paid until the last death.
d) The premium would be lower than in a joint life policy. - Answer-✅B
/.What are the continuing education requirements for agents who market long-term care
insurance policies?
a) 8 hours of long-term care specific education included in the regular CE requirements
b) 4 hours of long-term care education every year
c) 4 hours of long-term care education every 4 years
d) 8 hours of long-term care specific education in addition to the regular CE
requirements - Answer-✅A
/.If an insurance company issues a policy even though some questions on the
application were unanswered, when can the insurer get the answers to those
questions?
a) Within 3 months of issuing the policy
b) Within 30 days of issuing the policy
c) At any time within the incontestable period
d) Never; the insurer has waived its right to those answers by issuing the policy -
Answer-✅D
/.Which of the following is true regarding pure life annuity settlement option?
a) It guarantees income for a specified period of time.
b) It provides the highest monthly benefit.
c) It guarantees that all the proceeds will be paid out.
d) The beneficiary will receive a refund of the principal. - Answer-✅B
/.Which of the following is a correct statement about annuities?
a) Variable annuities provide minimum guaranteed rate of interest.
b) Variable annuities place the funds into the company's general account.
c) Fixed annuities have the annuitant assume the risks of investment.
d) Fixed annuities do not provide protection against inflation. - Answer-✅D
Certified
/. An insurer that operates for one or more social, educational, charitable, benevolent, or
religious purposes for the benefit of its members is known as a
a) Reciprocal insurer.
b) Stock insurer.
c) Fraternal insurer.
d) Mutual insurer. - Answer-✅C
/.Life insurance creates an immediate estate. Which of the following best explains this
statement?
The policy has cash values and nonforfeiture values.
b) The policy generates immediate cash value.
c) The death benefit will always be paid to the estate of the insured.
d) The face value of the policy is payable to the beneficiary upon the death of the
insured. - Answer-✅D
/.Which of the following is guaranteed under a variable whole life insurance policy?
a) Minimum death benefit
b) Interest rates
c) Cash value
d) Stock performance - Answer-✅A
/.Which of the following is NOT true regarding a deferred annuity?
a) The annuity grows tax deferred.
b) Income payments begin within 1 year from the date of purchase.
c) It is used to accumulate funds for retirement.
d) It can be purchased with a single lump sum. - Answer-✅B
/.Joe, age 63, was disabled and can no longer work. He meets the Social Security
definition of total disability. How many work credits must Joe have accumulated to have
the status of fully insured?
a) 20
b) 40
c) 10
d) 6 - Answer-✅B
/.All of the following are advantages of a qualified retirement plan EXCEPT
a) The contribution is not taxable to the employee when made.
b) The funds grow tax deferred.
,c) The income at retirement is tax free.
d) The contribution is deductible to the employer. - Answer-✅C
/.If an insured purchases an insurance policy with a large deductible, what risk
management technique is the insured exercising?
a) Avoidance
b) Sharing
c) Retention
d) Transfer only - Answer-✅C
/.Key person insurance can provide protection for all of the following economic losses to
a business EXCEPT
a) Fund the cost of training a current employee to perform the duties of a deceased
employee.
b) Pay the death benefit to the estate of the insured.
c) Provide deferred compensation retirement benefit if the insured key person survives
to retirement.
d) Fund the expense of finding a suitable replacement following the death of an
employee. - Answer-✅B
/.According to the Common Disaster clause, if the insured and primary beneficiary are
killed in the same accident and it cannot be determined who died first, which of the
following will be assumed?
a) The estate of the primary beneficiary and the contingent beneficiary split benefits
equally.
b) The insured died before the primary beneficiary.
c) The primary beneficiary died before the insured.
d) The deaths occurred at the same time. - Answer-✅C
/.Any person to whom the Commissioner has issued a seizure order and who refuses to
deliver any books, records, or assets of an insurer faces the following penalties:
a) A misdemeanor punishable by a fine up to $1,000, a year in jail, or both.
b) A misdemeanor punishable by a $5,000 fine, if unintentional, or $10,000, if
intentional.
c) Administrative fines only.
d) A felony punishable by a fine up to $1,000, a year in prison, or both. - Answer-✅A
/.If an individual willfully violates provisions of the Fair Credit Reporting Act, what is the
maximum civil penalty?
a) $1,000
b) $2,500
c) $5,000
d) $10,000 - Answer-✅B
/.What type of insurer uses a formal sharing agreement?
a) Stock insurers
,b) Mutual insurers
c) Fraternal Benefit Societies
d) Reciprocal insurers - Answer-✅D
/.In the Social Security blackout period, the surviving spouse will not receive benefits
until the age of
a) 59 1/2.
b) 60.
c) 65.
d) 70 1/2 - Answer-✅B
/.Which of the following is NOT a component of an insurance policy premium?
a) Insurer expenses
b) Investment return
c) Number of beneficiaries
d) Mortality cost - Answer-✅C
/.An insured intentionally did not disclose a material fact on an application for insurance.
This would be considered
a) Misrepresentation.
b) Concealment.
c) Coercion.
d) Avoidance. - Answer-✅B
/.As an insurer's field underwriter, a producer has all of the following responsibilities
EXCEPT
a) Issuing policies on behalf of the insurer.
b) Completing applications.
c) Soliciting insurance contracts.
d) Collecting premiums. - Answer-✅A
/.According to the life insurance replacement regulations, which of the following would
be an example of policy replacement?
a) A term policy expires, and the insured buys another term life policy.
b) Term insurance is changed to a Whole Life policy.
c) A lapsed policy is reinstated within a specific timeframe.
d) A policy is reissued with a reduction in cash value. - Answer-✅D
/.Guaranteeing future dividends is considered to be an unfair or deceptive act known as
a) Misrepresentation.
b) Twisting.
c) False financial statements.
d) Rebating. - Answer-✅A
/.At what point would an automatic premium loan be generated?
, a) Upon the surrender of the policy
b) Following the grace period
c) Upon the insured's death
d) Once the policy is delivered - Answer-✅B
/.All of the following are true regarding the waiver of cost of insurance rider EXCEPT
a) The rider waives insurance costs in the event the insured becomes disabled.
b) The rider is only applicable to universal life policies.
c) The rider cannot waive the cost of premiums that accumulate cash value.
d) The rider expires when the insured reaches age 60. - Answer-✅D
/.All of the following are true of the Survivorship Life policy EXCEPT
a) It can insure more than 2 lives.
b) The premium is based on the age of each insured.
c) The death benefit is not paid until the last death.
d) The premium would be lower than in a joint life policy. - Answer-✅B
/.What are the continuing education requirements for agents who market long-term care
insurance policies?
a) 8 hours of long-term care specific education included in the regular CE requirements
b) 4 hours of long-term care education every year
c) 4 hours of long-term care education every 4 years
d) 8 hours of long-term care specific education in addition to the regular CE
requirements - Answer-✅A
/.If an insurance company issues a policy even though some questions on the
application were unanswered, when can the insurer get the answers to those
questions?
a) Within 3 months of issuing the policy
b) Within 30 days of issuing the policy
c) At any time within the incontestable period
d) Never; the insurer has waived its right to those answers by issuing the policy -
Answer-✅D
/.Which of the following is true regarding pure life annuity settlement option?
a) It guarantees income for a specified period of time.
b) It provides the highest monthly benefit.
c) It guarantees that all the proceeds will be paid out.
d) The beneficiary will receive a refund of the principal. - Answer-✅B
/.Which of the following is a correct statement about annuities?
a) Variable annuities provide minimum guaranteed rate of interest.
b) Variable annuities place the funds into the company's general account.
c) Fixed annuities have the annuitant assume the risks of investment.
d) Fixed annuities do not provide protection against inflation. - Answer-✅D
