California Life, Accident, and Health Insurance State
License Exam Preparation Guide: Comprehensive Review
with 350+ Practice Questions and Verified Correct Answers
What distinguishes a deferred annuity from an immediate annuity? - Answer - The
time at which benefit payments start
Cindy buys a 10-year certain annuity with an installment refund. After receiving
monthly payments for 5 years, Cindy dies. How many remaining payments will the
insurer make to her beneficiary? - Answer - 60 payments
What is a common reason people purchase an annuity? - Answer - To protect
against the risk of outliving their financial resources
What kind of annuity pays income to two annuitants until their deaths? - Answer -
Joint and survivor annuity
What is a joint and survivor annuity? - Answer - Provides payments the annuity to
two people. If either person dies, the same income payments continue to the
survivor for life. When the surviving annuitant dies, no further payments are made
to anyone.
Victoria owns a life annuity and elects to receive annuity payments monthly for the
remainder of her life with "ten years certain". Her annuity will make payments -
Answer - for a minimum of 120 months and a maximum of the remainder of her
life
Which of the following statements regarding a life insurance policy dividend is
TRUE? - Answer - It is the distribution of excess of funds accumulated by the
insurer on participating policies.
,An insured owned by its policyholders is called a - Answer - mutual insurer
The systematic liquidation of a sum of money is provided by a(n) - Answer -
annuity
The importance of a representation is demonstrated in what rule? - Answer -
Materiality of concealment
When an applicant applies for insurance, the process by which the insurer
determines whether to issue a policy is called - Answer - Underwriting
Retirement plans are prevented from favoring highly compensated employees
under which government regulation ? - Answer - Nondiscrimination
The cost of services charged by the Health Insurance Counseling Advocacy
Program (HiCap) is - Answer - no cost
In a modified endowment contract, the penalty tax imposed on premature
withdrawals is - Answer - 10%
Express power given to an agent in an agency agreement is - Answer - the
authority to represent the insurer
Which of the following does a policyowner NOT have a right to change? - Answer
- Dividend schedule
,According to the California Insurance Code, what term is used to describe a fact so
important it could affect the policy premium? - Answer - Materiality
Which of these is the automatic mode of settlement for life insurance policy
proceeds? - Answer - lump sum
What is considered the most common type of specified disease insurance policy? -
Answer - Cancer
Minimum participation standards exist for a group health insurance plans in order
to - Answer - Prevent Adverse Selection
How does underwriting differ between group life and individual life insurance? -
Answer - Medical questions must be Answered on individual life insurance
when handling premiums for an insured an agent is acting in which capacity? -
Answer - Fiduciary
what is the term used to describe the frequency and severity of certain illnesses and
accidents? - Answer - Morbidity
Which of the following describes the statement "The more times an event is
repeated, the more predictable the outcome becomes"? - Answer - Law of large
numbers
In order to be considered "currently insured" under Social Security, an individual
must be credited with? - Answer - 6 quarters of coverage during the last 13-quarter
period
, How long must a policy be in force before an insurer is prohibited from denying
claims based on misstatements made on the health policy application? - Answer - 2
Years
Which of the following does the California Insurance Code NOT require an
insurance policy to specify? - Answer - Insurer's financial rating
Which of the following is NOT required in the content of a policy? - Answer -
Probability of loss
Which of the following pieces of information is NOT gathered during the personal
financial planning process? - Answer - An individual's civic organization
memberships
Which of the following is not considered to be an unfair claims settlement
practice? - Answer - Advising a claimant to hire an attorney
When an applicant applies for insurance, the process by which the insurer
determines whether to issue a policy is called? - Answer - Underwriting
How is a Medicare claim submitted? - Answer - Expenses are submitted to
Medicare by the health provider
According to the PPACA, the medical enrollment tier that has 80% actuarial value
is called: - Answer - Gold
Employer contributions to qualified plans are - Answer - Tax-deductible by the
employer
License Exam Preparation Guide: Comprehensive Review
with 350+ Practice Questions and Verified Correct Answers
What distinguishes a deferred annuity from an immediate annuity? - Answer - The
time at which benefit payments start
Cindy buys a 10-year certain annuity with an installment refund. After receiving
monthly payments for 5 years, Cindy dies. How many remaining payments will the
insurer make to her beneficiary? - Answer - 60 payments
What is a common reason people purchase an annuity? - Answer - To protect
against the risk of outliving their financial resources
What kind of annuity pays income to two annuitants until their deaths? - Answer -
Joint and survivor annuity
What is a joint and survivor annuity? - Answer - Provides payments the annuity to
two people. If either person dies, the same income payments continue to the
survivor for life. When the surviving annuitant dies, no further payments are made
to anyone.
Victoria owns a life annuity and elects to receive annuity payments monthly for the
remainder of her life with "ten years certain". Her annuity will make payments -
Answer - for a minimum of 120 months and a maximum of the remainder of her
life
Which of the following statements regarding a life insurance policy dividend is
TRUE? - Answer - It is the distribution of excess of funds accumulated by the
insurer on participating policies.
,An insured owned by its policyholders is called a - Answer - mutual insurer
The systematic liquidation of a sum of money is provided by a(n) - Answer -
annuity
The importance of a representation is demonstrated in what rule? - Answer -
Materiality of concealment
When an applicant applies for insurance, the process by which the insurer
determines whether to issue a policy is called - Answer - Underwriting
Retirement plans are prevented from favoring highly compensated employees
under which government regulation ? - Answer - Nondiscrimination
The cost of services charged by the Health Insurance Counseling Advocacy
Program (HiCap) is - Answer - no cost
In a modified endowment contract, the penalty tax imposed on premature
withdrawals is - Answer - 10%
Express power given to an agent in an agency agreement is - Answer - the
authority to represent the insurer
Which of the following does a policyowner NOT have a right to change? - Answer
- Dividend schedule
,According to the California Insurance Code, what term is used to describe a fact so
important it could affect the policy premium? - Answer - Materiality
Which of these is the automatic mode of settlement for life insurance policy
proceeds? - Answer - lump sum
What is considered the most common type of specified disease insurance policy? -
Answer - Cancer
Minimum participation standards exist for a group health insurance plans in order
to - Answer - Prevent Adverse Selection
How does underwriting differ between group life and individual life insurance? -
Answer - Medical questions must be Answered on individual life insurance
when handling premiums for an insured an agent is acting in which capacity? -
Answer - Fiduciary
what is the term used to describe the frequency and severity of certain illnesses and
accidents? - Answer - Morbidity
Which of the following describes the statement "The more times an event is
repeated, the more predictable the outcome becomes"? - Answer - Law of large
numbers
In order to be considered "currently insured" under Social Security, an individual
must be credited with? - Answer - 6 quarters of coverage during the last 13-quarter
period
, How long must a policy be in force before an insurer is prohibited from denying
claims based on misstatements made on the health policy application? - Answer - 2
Years
Which of the following does the California Insurance Code NOT require an
insurance policy to specify? - Answer - Insurer's financial rating
Which of the following is NOT required in the content of a policy? - Answer -
Probability of loss
Which of the following pieces of information is NOT gathered during the personal
financial planning process? - Answer - An individual's civic organization
memberships
Which of the following is not considered to be an unfair claims settlement
practice? - Answer - Advising a claimant to hire an attorney
When an applicant applies for insurance, the process by which the insurer
determines whether to issue a policy is called? - Answer - Underwriting
How is a Medicare claim submitted? - Answer - Expenses are submitted to
Medicare by the health provider
According to the PPACA, the medical enrollment tier that has 80% actuarial value
is called: - Answer - Gold
Employer contributions to qualified plans are - Answer - Tax-deductible by the
employer
