California Life Insurance Practice Exam

150 Questions  I  By Selidron
Practice examination for Life Insurance Licensing in California. Combines exams A, B, and C with 125 questions.

  
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1.  All of the following statements about survivorship life are true, except:
A.
B.
C.
D.
2.  Which of the following is not excluded from the California Life and Annuity Replacement Law?
A.
B.
C.
D.
3.  Which of the following is an incorrect statement about a client’s privacy rights?
A.
B.
C.
D.
4.  Term insurance is best described by which of the following?
A.
B.
C.
D.
5.  Which statement about life insurance code and ethics is not true?
A.
B.
C.
D.
6.  Which of the following are characteristics of renewable term?
A.
B.
C.
D.
7.  Members of the MIB are required to report
A.
B.
C.
D.
8.  An insurer invests the cash value of a fixed annuity in which of the following assets?
A.
B.
C.
D.
9.  An agent 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:
A.
B.
C.
D.
10.  When a client is declined after submitting a prepaid application for life insurance:
A.
B.
C.
D.
11.  Brian purchased a variable life policy and died 25 months after the issue date. It is then discovered that Brian understated his age on the application. What will the insurer do in regard to the payment of the death benefit to the beneficiary?
A.
B.
C.
D.
12.  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:
A.
B.
C.
D.
13.  Starting from lowest to highest, rank the initial premium paid by the client for these insurance policies below:
A.
B.
C.
D.
14.  All of these statements about life insurance settlement options are false, except:
A.
B.
C.
D.
15.  At age 72, Mrs. Smith is considering applying for Medi-Cal so she can afford her medical bills. Today Agent Charles is visiting her home and wanting to sell her an annuity product. Which of the following is true?
A.
B.
C.
D.
16.  Which statement is an accurate description of life insurance policy dividends?
A.
B.
C.
D.
17.  In order to be financially solvent, an insurer must accomplish all of the following, except:
A.
B.
C.
D.
18.  In the insurance planning processes, the blackout period is:
A.
B.
C.
D.
19.  A policy illustration may not include:
A.
B.
C.
D.
20.  The future account value of the annuity Alex purchased is connected to the S&P500 index. What type of annuity did he purchase?
A.
B.
C.
D.
21.  In life insurance, beneficiary succession is the method used to determine who will receive death proceeds. If the primary beneficiary is not living upon the death of the insured who will receive the payment?
A.
B.
C.
D.
22.  In which type of policy does the insurer apply flexible premium to pay for the cost of insurance and expenses and then uses the remaining balance plus interest to build the cash value account?
A.
B.
C.
D.
23.  A client has a history of DUIs. To his insurer, they see him as a ________ hazard.
A.
B.
C.
D.
24.  In disability insurance, the period of time between when the disability started and the commencement of benefits is the:
A.
B.
C.
D.
25.  A client has purchased an annuity with an annual bonus she received at the end of last year. She has requested annual benefit payments to start at the end of this year. What type of annuity did she purchase?
A.
B.
C.
D.
26.  A policyowner who cannot borrow the equity, change beneficiaries, assign a policy or stop paying premiums without the beneficiary’s written consent has designated the beneficiary as a(n):
A.
B.
C.
D.
27.  According to the California Insurance Code, what information is the agent required to include on their business card?
A.
B.
C.
D.
28.  In comparing the purchase of individual life insurance to acquiring group life, which statement is not true?
A.
B.
C.
D.
29.  Which statement about reinstatement is false?
A.
B.
C.
D.
30.  The term aleatory is best defined by which of the following?
A.
B.
C.
D.
31.  Mrs. Anderson need to invest the proceeds from her late husband's life insurance. She invests a portion of the money into an annuity. Since she is 62, and is still working, she decides to purchase a single premium deferred annuity. She won' t need an income for a few more years. What should the agent make sure Mrs. Anderson understands?
A.
B.
C.
D.
32.  In a group life policy with a death benefit of more than $50,000:
A.
B.
C.
D.
33.  What type of insurance would a person select as the most efficient method of paying the outstanding debt on their home in the event of death?
A.
B.
C.
D.
34.  Which of the following is most likely to have a TSA?
A.
B.
C.
D.
35.  Premiums paid into a variable annuity purchase which of the following?
A.
B.
C.
D.
36.  What is the usual federal income tax treatment of individual life insurance?
A.
B.
C.
D.
37.  Profit Sharing Plans:
A.
B.
C.
D.
38.  An applicant has the right to know that the insurance company will collect certain personal information about their credit, character and reputation. The insurer may gain such information from:
A.
B.
C.
D.
39.  All of the following are characteristics of the social insurance program known as Social Security, except:
A.
B.
C.
D.
40.  All of the following are dividend options, except:
A.
B.
C.
D.
41.  How many hours of continuing education are required per renewal for a life-only agent?
A.
B.
C.
D.
42.  A life settlement broker
A.
B.
C.
D.
43.  Which of the following becomes part of the contract, is guaranteed to be true, and if untrue, may be grounds for rescinding the policy?
A.
B.
C.
D.
44.  At what age does Social Security Medicare program Part B start providing benefits?
A.
B.
C.
D.
45.  A universal life policy may be surrendered for its cash value:
A.
B.
C.
D.
46.  Upon the death of a primary breadwinner who is fully insured under Social Security, a dependent child is eligible to receive an income benefit until the age of
A.
B.
C.
D.
47.  Which of the following statements is not included in the Entire Contract clause?
A.
B.
C.
D.
48.  All of the following statements about agents are true, except:
A.
B.
C.
D.
49.  Which of the following transactions would most likely be declined due to lack of insurable interest?
A.
B.
C.
D.
50.  Bob and Neal are partners in a law firm together. If one of them were to pass away, the want to make sure that their surviving family will receive a fair value for their stake in the business. What life insurance arrangement would be most suited for transitioning the business during this time of loss?
A.
B.
C.
D.
51.  Which action by an insurer, or its representatives, is not considered an unfair claims violation?
A.
B.
C.
D.
52.  An employee has lost access to their group term life insurance plan, but they are allowed to convert to a new plan. Which best describes this new plan?
A.
B.
C.
D.
53.  According to the CIC, life-only agents must keep records of their transactions for:
A.
B.
C.
D.
54.  The insured dies 6 months after the policy issue date. Upon death of the insured, it is determined that the applicant made a material misstatement on the application. What is the most likely course of action for the insurer?
A.
B.
C.
D.
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55.  Which of the following statements is false in regard to a Life Paid-up at-65 whole life policy?
A.
B.
C.
D.
56.  Which best describes industrial insurance?
A.
B.
C.
D.
57.  The applicant works 2 different jobs. The underwriter will rate him according to which job?
A.
B.
C.
D.
58.  Which of the following is not an acceptable underwriting classification?
A.
B.
C.
D.
59.  All of the following statements about life insurance policy illustrations and the senior market are correct, except:
A.
B.
C.
D.
60.  Under the cost of living adjustment rider, the policy:
A.
B.
C.
D.
61.  According to the code, any person legally capable of making an insurance policy is considered:
A.
B.
C.
D.
62.  Which of the following is considered ordinary insurance?
A.
B.
C.
D.
63.  Variable insurance and variable annuity products are regulated by:
A.
B.
C.
D.
64.  To authorize the release of an attending physician’s report, the applicant must:
A.
B.
C.
D.
65.  While collecting underwriting information, certain rules must be followed. Which of the following is incorrect?
A.
B.
C.
D.
66.  The person who will receive the benefit of an annuity and whose life the payout is based upon when the contract is purchased is the:
A.
B.
C.
D.
67.  Of the following, which best descirbes the difference between life insuracne and annuities?
A.
B.
C.
D.
68.  All of the following needs to be included on an application for life insurance except:
A.
B.
C.
D.
69.  All of the following statements about assignments are not false, except:
A.
B.
C.
D.
70.  According to the California DOI, an insurer whose articles of incorporation are registered in Oslo, Norway, is considered:
A.
B.
C.
D.
71.  Situations where the risk is increased by slippery floors, a habit of lying, or reckless drunk driving are best described by which of the following?
A.
B.
C.
D.
72.  Which insurance is known for having a level premium with a fixed rate of return resulting in guaranteed cash value?
A.
B.
C.
D.
73.  A life-only agent issues a binding receipt to his client since the client did include a check for the initial premium with his completed application. Which is true?
A.
B.
C.
D.
74.  Which of the following characteristics would not stop an insurance company from accepting an insurance risk? The item to be insured:
A.
B.
C.
D.
75.  A forty-five year old investor has been laid off from his job. In order to pay bills he takes a premature distribution from his traditional IRA account. What tax penalties, if any, will he face?
A.
B.
C.
D.
76.  Which of the following can be written as a group policy?
A.
B.
C.
D.
77.  All of the following describe differences between binding receipts and conditional receipts, except:
A.
B.
C.
D.
78.  Tommy Greene has a CLU certification. Which of th following names would automatically approve for use as his agency's name?
A.
B.
C.
D.
79.  Which qualified plan is characterized by having a non-deductible contribution and tax-free distribution?
A.
B.
C.
D.
80.  In insurance, the agents have authorization to represent the company. The producers may exercise this relationship through:
A.
B.
C.
D.
81.  A beneficiary decides to take the option that will the largest amount per payment, knowing after death no monies will be paid out to any descendants. The settlement option is:
A.
B.
C.
D.
82.  In a seven year vesting schedule, what percentage of employer contributions is vested after seven years?
A.
B.
C.
D.
83.  E&O coverage
A.
B.
C.
D.
84.  Every admitted insurer in California must maintain a unit, or department, responsible for investigating which of the following?
A.
B.
C.
D.
85.  A partial payment of proceeds to cover final expenses is paid to someone not designated as a beneficiary but acting in a legal or fiduciary capacity. This is provided in which provision?
A.
B.
C.
D.
86.  Per the Code, the best definitions of "shall" and "may" are:
A.
B.
C.
D.
87.  The entire contract can include many components. Which of the following cannot be a part of the entire contract.
A.
B.
C.
D.
88.  An applicant for an insurance license has had a previous application for a professional license denied for cause within the last five years. The insurance commissioner will:
A.
B.
C.
D.
89.  Any person who misappropriates fiuciary funds for personal use is guilty of:
A.
B.
C.
D.
90.  Ashley, the policy owner and insured, named Wendell as primary beneficiary and Barbara as contingent beneficiary. Just six (6) weeks prior to Ashley’s death, Wendell and Barbara are killed in a common disaster. The insurance proceeds will be received by whom?
A.
B.
C.
D.
91.  Roger, who is 35 years old, has a whole life insurance policy with a death benefit of $150,000. At the age of 65 he will no longer make premium payments. When will the cash value of his policy be $150,000?
A.
B.
C.
D.
92.  The definition of mortality and morbidity:
A.
B.
C.
D.
93.  Your policy contains the guaranteed insurability rider. When can you purchase additional insurance on you policy?
A.
B.
C.
D.
94.  What is the minimum number of members required for group life insurance?
A.
B.
C.
D.
95.  Agent Darren offers life insurance for no cost to people buying property in a local development. When the Commissioner investigates his actions, which of the following is not a likely consequence?
A.
B.
C.
D.
96.  The Roth and Traditional IRAs have some similarities. Which of the following is not true?
A.
B.
C.
D.
97.  After 12 years, the policyowner decides she no longer needs the large death benefit on her whole life policy. She calls you, her agent, and you tell her she can use the reduced paid-up non-forfeiture option. Which of the following is not true about the new policy?
A.
B.