CALIFORNIA LIFE PRACTICE EXAM A 75 Questions with Answers
AN ANNUITY THAT IS PURCHASED WITH A LUMP SUM PREMIUM AND WHOSE BENEFITS BEGIN AFTER 12
... [Show More] MONTHS IS CALLED A - CORRECT ANSWER SINGLE PREMIUM DEFERRED ANNUITY
A TECHNIQUE USED TO DETERMINE THE AMOUNT OF LIFE INSURANCE NEEDED BY FOCUSING ON THE PROJECTED EARNING POTENTIAL OF AN INSURED IS CALLED THE - CORRECT ANSWER HUMAN LIFE VALUE APPROACH
WHEN REPLACING A POLICY THE PRODUCER MUST PRESENT THE APPLICANT WITH A NOTICE REGARDING REPLACEMENT OF LIFE INSURANCE - CORRECT ANSWER AT THE TIME OF TAKING THE APPLICATION
THE POSSIBILITY OF A FINANCIAL LOSS INCURRED BY A LIFE INSURANCE COMPANY FOR THE PREMATURE DEATH OF AN INSURED IS KNOW AS A - CORRECT ANSWER RISK
THE MEDICAL INFORMATION BUREAU (MIB) IS A NONPROFIT TRADE ASSOCIATION THAT MAINTAINS - CORRECT ANSWER MEDICAL INFORMATION ON APPLICANTS FOR LIFE AND HEALTH INSURANCE
A PERSON WHO SIGNS A FRAUDULENT CLAIM FORM MAY BE FOUND GUILTY OF - CORRECT ANSWER PERJURY
WHICH POLICY IS A COMBINATION OF ANNUAL RENEWABLE TERM INSURANCE AND INTEREST-SENSITIVE CASH VALUE - CORRECT ANSWER UNIVERSAL LIFE
THE RIGHT TO A FULL REFUND OF PREMIUMS FOR INSUREDS AGE 60 OR OLDER IS - CORRECT ANSWER 30 DAYS
THE PREMIUM MODES CAN BE BEST DESCRIBED AS THE - CORRECT ANSWER FREQUENCY OF PREMIUM PAYMENT
INTENTIONALLY OMITTING A HISTORY OF HEART PROBLEMS ON AN APPLICATION IS - CORRECT ANSWER CONCEALMENT
A TAX-SHELTERED ANNUITY (TSA) IS A QUALIFIED PLAN AVAILABLE FOR - CORRECT ANSWER NONPROFIT ORGANIZATIONS
THE INTENT OF REPLACEMENT REGULATIONS IS TO PROTECT THE - CORRECT ANSWER POLICYOWNER
WHICH PROVISION ALLOWS A LAPSED POLICY TO BE PUT BACK IN FORCE? - CORRECT ANSWER REINSTATEMENT
ACCORDING TO THE CALIFORNIA DEPARTMENT OF INSURANCE, AN INSURER WHOSE ARTICLES OF INCORPORATION ARE REGISTERED IN OSLO, NORWAY IS CONSIDERED A/AN - CORRECT ANSWER ALIEN INSURER
MORTALITY IS DEFINED AS THE - CORRECT ANSWER RATE OF DEATH
WHICH OF THE FOLLOWING IS NOT A CHARACTERISTIC OF GROUP LIFE INSURANCE? - CORRECT ANSWER A GROUP MAY EXIST FOR THE PURPOSE OF PURCHASING INSURANCE.
WHEN A PRODUCER COLLECTS THE INITIAL PREMIUM AND ISSUES A CONDITIONAL RECEIPT, THE RECEIPT - CORRECT ANSWER MAY ALLOW LIFE INSURANCE COMPANIES TO START COVERAGE BEFORE POLICY DELIVERY
THE LAW OF LARGE NUMBERS ALLOWS AN INSURANCE COMPANY TO PREDICT THE EXPECTED LOSSES AMONG - CORRECT ANSWER MEMBERS OF A GROUP OF INDIVIDUALS WITH SIMILAR RISKS
IF AN INSURER'S LEGAL RESERVE FUNDS ARE FOUND TO BE LESS THAN THE MINIMUM REQUIRED BY LAW THE INSURER IS CONSIDERED - CORRECT ANSWER INSOLVENT
WHICH TYPE OF POLICY WOULD BE SUITABLE TO PROTECT THE BALANCE OF A HOME MORTGAGE? - CORRECT ANSWER DECREASING TERM
WHEN MUST INSURABLE INTEREST EXIST? - CORRECT ANSWER AT THE TIME OF APPLICATION
THE RIDER THAT PROVIDES FOR PARTIAL PAYMENT OF THE DEATH BENEFIT IN ADVANCE TO HELP WITH NURSING OR COALESCENT HOME EXPENSES IS THE - CORRECT ANSWER LONG-TERM CARE
WHICH ANNUITY PAYOUT OPTIONS GUARANTEES THE RETURN OF ALL THE PRINCIPAL INVESTED IN THE CONTRACT? - CORRECT ANSWER REFUND LIFE ANNUITY
WHICH OF THE FOLLOWING STATEMENTS IS NOT TRUE ABOUT PARTICIPATION POLICIES? - CORRECT ANSWER THEY PAY DIVIDENDS TO STOCKHOLDERS
INSURANCE CONTRACTS ARE BASED UPON A DOCTRINE WHICH REQUIRES ALL PARTIES TO THE CONTRACT TO BE HONEST. THIS IS KNOWN AS THE DOCTRINE OF - CORRECT ANSWER UTMOST GOOD FAITH
ACCORDING TO THE CALIFORNIA INSURANCE CODE, LIFE-ONLY PRODUCERS MUST KEEP RECORDS OF THEIR TRANSACTIONS FOR AT LEAST - CORRECT ANSWER 5 YEARS
WHICH OF THESE IS NOT AN ELEMENT OF A LEGAL CONTRACT? - CORRECT ANSWER UNILATERAL
WHICH STATEMENT IS INCORRECT ABOUT A FIXED ANNUITY? - CORRECT ANSWER INCOME PAYMENTS VARY FROM MONTH TO MONTH
IN A GROUP POLICY, THE EMPLOYER RECEIVES - CORRECT ANSWER MASTER CONTRACT
THE RISK OF A LOSS TO AN INSURANCE COMPANY IS ALSO REFERRED TO AS A/AN - CORRECT ANSWER EXPOSURE
WITH A MODIFIED PREMIUM WHOLE LIFE CONTRACT, PREMIUM PAYMENTS ARE - CORRECT ANSWER LOWER IN THE EARLY YEARS OF THE CONTRACT
IF A MISSTATEMENT OF AGE IS DISCOVERED DURING THE PROCESSING OF A LIFE INSURANCE CLAIM, THE INSURER WILL - CORRECT ANSWER ADJUST THE DEATH BENEFIT
THE PAY-IN TIME FOR DEFERRED ANNUITIES IS KNOWN AS THE - CORRECT ANSWER ACCUMULATION PERIOD
STATEMENTS MADE BY AN APPLICANT ON AN APPLICATION FOR INSURANCE ARE CONSIDERED TO BE - CORRECT ANSWER REPRESENTATIONS
THE CAUSE OF A LOSS IS KNOWN AS A/AN - CORRECT ANSWER PERIL
WHEN A PRODUCER, BROKER, OR SOLICITOR HANDLES PREMIUMS FOR AN INSURER, THEY ARE ACTING IN WHICH OF THE FOLLOWING CAPACITIES? - CORRECT ANSWER LEGAL REPRESENTATIVE WITH POWER OF ATTORNEY
WHAT IS THE RISK CLASSIFICATION FOR THOSE WHO ARE INSURABLE BUT HAVE A HIGHER THAN AVERAGE RISK? - CORRECT ANSWER SUBSTANDARD
THE OPTION THAT PAYS A SPECIFIED AMOUNT TO THE ANNUITANT WITH NO REMAINING VALUE PAYABLE TO A BENEFICIARY IS - CORRECT ANSWER LIFE ONLY
MONEY BORROWED FROM A LIFE INSURANCE POLICY'S CASH VALUE IS - CORRECT ANSWER NOT TAXABLE
AN INSURED WHO SUBMITS A FRAUDULENT CLAIM TO AN INSURER IS AN EXAMPLE OF A /AN - CORRECT ANSWER MORAL HAZARD
SELLING WHICH OF THE FOLLOWING POLICES WOULD REQUIRE A LICENSE ISSUED BY FINRA? - CORRECT ANSWER VARIABLE UNIVERSAL LIFE
THE TRANSFER OF A POSSIBLE FINANCIAL LOSS TO ANOTHER PARTY REFERS TO - CORRECT ANSWER INSURANCE
THE TYPE OF WHOLE LIFE INSURANCE WHERE PREMIUMS ARE PAYABLE OVER THE WHOLE LIFE OF THE INSURED TO AGE 100 IS CALLED - CORRECT ANSWER ORDINARY (STRAIGHT) LIFE
WHICH OF THE FOLLOWING IS NOT A RISK MANAGEMENT TECHNIQUE? - CORRECT ANSWER EXPOSURE
SOCIAL SECURITY BENEFITS DO NOT INCLUDE - CORRECT ANSWER WORKERS COMPENSATION
TO BE INSURABLE, A RISK MUST NOT BE - CORRECT ANSWER CATASTROPHIC
A LIFE INSURANCE DEATH BENEFIT PAID IN A LUMP SUM TO A BENEFICIARY IS - CORRECT ANSWER NOT SUBJECT TO ANY TAXES
TWO BUSINESS PARTNERS OWN LIFE INSURANCE ON EACH OTHER. IF ONE PARTNER DIES WHICH CONTRACT WILL ALLOW THE SURVIVING PARTNER TO USE THE DEATH BENEFIT TO PURCHASE THE DECEASED'S BUSINESS INTERESTS? - CORRECT ANSWER BUY-SELL AGREEMENT
THE TYPE OF POLICY THAT CAN BE CHANGED FROM ONE THAT DOES NOT HAVE CASH VALUE TO ONE THAT DOES IS A - CORRECT ANSWER CONVERTIBLE TERM POLICY
WHICH DOCUMENT DESCRIBES THE SPECIFIC FEATURES AND ELEMENTS OF A POLICY? - CORRECT ANSWER POLICY SUMMARY
THE ATTEMPT THAT AN INSURER MAKES TO KEEP ITS EXISTING INSURANCE POLICY IN FORCE AFTER RECEIPT OF A NOTICE OF REPLACEMENT FROM ANOTHER COMPANY IS CALLED - CORRECT ANSWER CONSERVATION
A PRIVATE AND CIVIL WRONG FOR WHICH A REMEDY MAY BE SOUGHT THROUGH LEGAL ACTION IS KNOWN AS A - CORRECT ANSWER TORT
IF AN ANNUITANT DIES BEFORE THE ANNUITIZATION PERIOD, WHAT PROCEEDS WILL THE BENEFICIARY RECEIVE? - CORRECT ANSWER ACCUMULATION VALUE OR THE PREMIUMS PAID, WHICHEVER IS GREATER
LIFE-ONLY AGENTS MAY TRANSACT ALL OF THE FOLLOWING TYPES OF INSURANCE EXCEPT - CORRECT ANSWER 24-HOUR CARE COVERAGE
WHICH OF THE FOLLOWING IS NOT A CHARACTERISTIC OF THE ACCELERATED BENEFIT (LIVING NEEDS) RIDER? - CORRECT ANSWER USUALLY REQUIRES ADDITIONAL PREMIUM
IF THE CASH VALUE EXCEEDS THE PREMIUMS PAID IN A WHOLE LIFE POLICY, WHAT ARE THE TAX CONSEQUENCES IF THE POLICY IS SURRENDERED? - CORRECT ANSWER THE PORTION THAT EXCEEDS THE PREMIUMS PAID IS TAXABLE
WHEN ONE PARTY PREPARES THE CONTRACT AND THE OTHER PARTY EITHER ACCEPTS OR REJECTS THE CONTRACT, IT IS A(N) - CORRECT ANSWER CONTRACT OF ADHESION
WHICH OF THE FOLLOWING POLICIES COULD BE EXPECTED TO HAVE THE LOWEST PREMIUM? - CORRECT ANSWER STRAIGHT LIFE
WHICH RIDER MAY INCREASE THE VALUE OF THE POLICY DUE TO AN INCREASE IN THE CONSUMER PRICE INDEX (CPI)? - CORRECT ANSWER COST OF LIVING
WHEN COMPLETING AN APPLICATION FOR LIFE INSURANCE, A PRODUCER SHOULD DO WHICH OF THE FOLLOWING? - CORRECT ANSWER WITNESS THE APPLICANT'S SIGNATURE
WHICH OF THE FOLLOWING CHARACTERIZES A SPECULATIVE RISK? - CORRECT ANSWER HAVING THE POSSIBILITY FOR LOSS OR GAIN
WHICH POLICY PROVISION INCLUDES THE APPLICATION AND THE FIRST PREMIUM FROM THE INSURED AND THE PROMISE TO PAY FROM THE INSURER? - CORRECT ANSWER CONSIDERATION
THE GUARANTEED INSURABILITY RIDER ALLOWS THE POLICYOWNER TO PURCHASE ADDITIONAL INSURANCE AT THE INSURED'S - CORRECT ANSWER ATTAINED AGE
A LIFE POLICY THAT COVERS TWO LIVES AND PROVIDES FOR PAYMENT OF THE DEATH BENEFIT UPON THE DEATH OF THE FIRST INSURED IS CALLED - CORRECT ANSWER JOINT LIFE
WHOSE SIGNATURE IS REQUIRED TO MAKE CHANGES TO A WRITTEN APPLICATION FOR A LIFE INSURANCE POLICY? - CORRECT ANSWER APPLICANT
A PRODUCER WHO KNOWINGLY MISREPRESENTS MATERIAL INFORMATION FOR THE PURPOSE OF INDUCING A CLIENT TO LAPSE, FORFEIT, CHANGE OR SURRENDER A LIFE INSURANCE POLICY OR ANNUITY HAS COMMITTED AN ILLEGAL PRACTICE KNOWN AS - CORRECT ANSWER TWISTING
UNDERWRITING IS THE PROCESS OF - CORRECT ANSWER DETERMINING THE COMPANY'S RISK REGARDING A PROPOSED INSURED
AN ARRANGEMENT WHERE THE EMPLOYER AND EMPLOYEE AGREE TO PURCHASE AND FUND LIFE INSURANCE ON AN EMPLOYEE IS KNOWN AS A - CORRECT ANSWER SPLIT DOLLAR PLANS
WHICH OF THE FOLLOWING IS TRUE ABOUT A JOINT AND SURVIVOR LIFE ANNUITY? - CORRECT ANSWER BENEFITS WILL STOP WHEN THE LAST ANNUITANT DIES
A CONTRACT'S AGREEMENT FOR LIFE INSURANCE IS COMPOSED OF A(N) - CORRECT ANSWER OFFER AND ACCEPTANCE
THE TERM LIMIT ON LIABILITY REFERS TO THE - CORRECT ANSWER DEATH BENEFIT OF A LIFE INSURANCE POLICY
A POLICY THAT COMBINES WHOLE LIFE ON THE BREADWINNER AND TERM ON THE SPOUSE AND CHILDREN IS CALLED A - CORRECT ANSWER FAMILY POLICY
WHICH NONFORFEITURE VALUES MAINTAINS THE ORIGINAL FACE VALUE OF THE CONTRACT BUT SACRIFICES THE LENGTH OF THE CONTRACT? - CORRECT ANSWER EXTENDED TERM
WHICH METHOD OF HANDLING RISK IS SELF-INSURANCE? - CORRECT ANSWER RETENTION
WHEN MUST INSURABLE INTEREST EXIST? - CORRECT ANSWER AT THE TIME OF APPLICATION [Show Less]