The Ultimate Life & Health Practice Test III

150 Questions | Total Attempts: 7581

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The Ultimate Life & Health Practice Test III

Life & Health - Practice Exam 3


Questions and Answers
  • 1. 
    Choose from the following selections the best description of a premium.
    • A. 

      Funds received by an insured from an insurer to realize the benefits of the policy.

    • B. 

      Funds received by an insurer from an insured to realize the benefits of the policy.

    • C. 

      A bonus paid to an agent for high insurance sales production.

    • D. 

      The amount an insured pays for each unit of coverage. $7 for every $1,000 of coverage is an example.

  • 2. 
    Agents must act on behalf of their clients in such a way that uphold their "fiduciary duty".  Select the best emple of this duty from the choices below.
    • A. 

      Assuring a claim form is forwarded to the insurer in a timely manner.

    • B. 

      Reviewing the insurance needs and coverage for a client periodically.

    • C. 

      Quickly sending an insured's premium to the home office.

    • D. 

      Assisting a client to choose the best policy for their situation

  • 3. 
    The Fair Credit Reporting Act mandates that a credit reporting company responds to a consumer complaint when that company's credit report inaccurately reflects information about the consumer.
    • A. 

      True

    • B. 

      False

  • 4. 
    In the process of applying for insurance an applicant is asked questions that do not relate to underwriting but are clearly meant for attaining marketing information.  Under the code this practice is allowable assuming the person aplying for coverage is informed of such practices.
    • A. 

      True

    • B. 

      False

  • 5. 
    The term "consideration" applies to the issuance of an insurance policy.  Choose the best description of this term from the choices below.
    • A. 

      The amount of death benefit.

    • B. 

      The time the underwriting department gives the application.

    • C. 

      The face amount of the policy one year from the date of issue.

    • D. 

      None of the above

  • 6. 
    The doctrine of "utmost good faith" applies to the business of transacting insurance.  Which of the following is an example of its application ?
    • A. 

      Each party is entitled to rely upon the representations of the other party.

    • B. 

      Answers to application questions are provided to the best of one's knowledge.

    • C. 

      Each party to a contract must give valuable consideration.

    • D. 

      Any unclear or ambiguous statement in a contract of insurance is decided in favor of the insured.

  • 7. 
    Fraud is an intentional act to deceive and induce another to part with something of value.  Which of the following would describe fraud in the process of applying for insurance ?1. intentionally distorting the truth to get an insurance policy 2. making a misrepresentation that has no material effect and displays no intent to lie.
    • A. 

      1 only

    • B. 

      2 only

    • C. 

      Both 1 and 2

    • D. 

      Neither 1 nor 2

  • 8. 
    Choose the correct answer.  The California Insurance Code: 1. includes laws and regulations the Commissioner has issued. 2. is basically the body of laws governing insurance business in this state. 3. is broken into five sections.  They are: life, health, personal lines, commercial property and commercial liability insurance.
    • A. 

      1 only

    • B. 

      2 only

    • C. 

      1 and 3

    • D. 

      1, 2 and 3

  • 9. 
    The Commissioner has numerous responsibilities and wide-ranging authority concerning the California Insurance Code.  Should he deem it necessary, he can rewrite certain sections of the code to better serve the insuring public.
    • A. 

      True

    • B. 

      False

  • 10. 
    Which of the following is required to be included in the writing of an insurance contract ?
    • A. 

      The parties between whom the contract is made

    • B. 

      The risks insured against

    • C. 

      The period in which the insurance is to continue

    • D. 

      All the above

  • 11. 
    Neglecting to communicate that which a party knows, and ought to communicate, so that the other party may make a sound decision is known as:
    • A. 

      Concealment

    • B. 

      Material information

    • C. 

      Boycotting

    • D. 

      None of the above

  • 12. 
    From the following, identify that which applies to an applicant's misstatement on an application for insurance. 1. Should the misstatement be made with express intent to mislead the insurer it is considered fraud. 2. Should the misstatement not be material to the Company's decision it may not affect the application.
    • A. 

      1 only

    • B. 

      2 only

    • C. 

      1 and 2

  • 13. 
    • A. 

      It is a statement merely made to the best of one's knowledge, and can only be express.

    • B. 

      Should either party violate a warranty it entitles the other party to cancel the contract.

    • C. 

      Warranties can be made about events in the past, present or future.

    • D. 

      Warranties made at or during the execution of a policy must be contained in the policy, signed by the insured and attached to the contract

  • 14. 
    Which of the following is correct about the term "transact" as it applies to the field of insurance and the various penalties for insurance transactions in violation of the code ?1. Solicitation is a part of transacting insurance. 2. Negotiations preliminary to the execution of a policy falls within the definition of transacting insurance. 3. Should a person tranact insurance without a valid license he/she is guilty of a misdemeanor. 
    • A. 

      1 and 2

    • B. 

      2 and 3

    • C. 

      1 and 3

    • D. 

      1, 2 and 3

  • 15. 
    According to the code, "transact", as it applies to insurance does not include negotiations preliminary to the execution of a contract of insurance.
    • A. 

      True

    • B. 

      False

  • 16. 
    The California Insurance Code cites a specific definition for a "life agent".  A life agent is:
    • A. 

      An insurance broker

    • B. 

      An insurance agent

    • C. 

      A person authorized to aid an insurance agent to solicit life insurance

    • D. 

      A, b and c are false

  • 17. 
    In the California Insurance Code there is a definition that reads, in short, "....a person who, for a fee, offers to advise any insured having any interest in life or disability insurance contracts..."  This is the definition of :
    • A. 

      An insurance broker paid on a fee-for-service

    • B. 

      A solicitor

    • C. 

      A life and disability analyst

  • 18. 
    Of the items listed below, which are requirements for a life and disability insurance analyst license ?
    • A. 

      The applicant must have a good general reputation and good business reputation

    • B. 

      The applicant must be 18 years of age, minimum.

    • C. 

      The applicant must have a thorough knowledge of life and disability insurances.

    • D. 

      These are all required

  • 19. 
    To protect (subject to statutory limitations) life and health owners and insureds in the event of impairment or insolvency of a member insurer.  This is a description of:
    • A. 

      Medi-Cal

    • B. 

      The California Life and Health Insurance Guarantee Association

    • C. 

      OBRA

    • D. 

      None of the above

  • 20. 
    An agent mostly sells long-term care insurance to individuals.  He obtained his insurance license (life and health) in January of 1998.  In 1998 he must:
    • A. 

      Complete 25 hours of life and health continuing education only

    • B. 

      Complete 25 hours of life and health continuing education and, in addition, complete 8 hours of LTC specific continuing education, a total of 33 hours

    • C. 

      Complete 25 hours of life and health continuing education, 8 of which are LTC specific

    • D. 

      None of the above

  • 21. 
    • A. 

      All renewal fees are paid but there is a termination of all appointments

    • B. 

      The license has not been renewed

    • C. 

      Transactions of insurance are no longer executed following a 1 year period.

    • D. 

      None of the above

  • 22. 
    Ben is a life agent who would like to do business with the rock Solid Insurance Company but he doesn't have an appointment to sell their policies.  Assuming Rock solid does not require exclusive representation, can Ben submit an application to them from a prospect ?
    • A. 

      No, appointments are always required to be filed prior to submitting applications.

    • B. 

      Yes, and the application need not be approved by the underwriting department.

    • C. 

      Yes, and if the insurer approves the application they must appoint Ben within 14 days.

    • D. 

      All the above are false.

  • 23. 
    Assuming CE requirements have been met, how is the life agent's license renewed ?
    • A. 

      Pay the renewal billing notice the Department sends out about 60 days before the renewal date.

    • B. 

      Pay the renewal billing notice the Department sends out 90 days before the renewal date.

    • C. 

      Pay the renewal fee, at which time the Department will send the renewal notice.

    • D. 

      Licenses are automatically renewed assuming no disciplinary action has been taken.

  • 24. 
    Chuck Harris has earned a Chartered Life Underwriter designation.  From the selections below choose the one that the California Insurance Code would find acceptable when publishing his name:
    • A. 

      Harris Insurance Services

    • B. 

      Chuck Harris, CLU and Company

    • C. 

      Chuck Harris, Insurance Company

    • D. 

      All the above are acceptable

  • 25. 
    Every licensee must indicate on which of the following documents his or her license number ?
    • A. 

      Print advertisements

    • B. 

      Business cards

    • C. 

      Written price quotations

    • D. 

      All the above