California Life Insurance Practice Exam A assesses knowledge in disability insurance, insurance risk management, mutual insurance companies, and ethical practices in life insurance. It prepares candidates for state-specific regulations and industry standards.
0%
60%
80%
100%
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Automatic Premium Loan
Accelerated (Living) Benefit
Assignment of Benefit
Payor Benefit
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Executive Bonus Plan
Split Dollar Plan
Buy-Sell Agreement
Deferred Compensation Plans
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The job with the most hours worked each week on average.
The job with the highest income.
The job the insured is most closely trained for professionally.
The job that is most hazardous.
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Traditional IRA
Keogh
Roth IRA
TSA's
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Names of patients treated by member physicians.
Cause of death when death benefits are paid.
Medical conditions found during underwriting.
Amounts of life insurance applied for by all applicants.
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The insurance company can keep the initial premium paid.
The client is still covered for 90 days on the conditional receipt.
The insurance company must refund the entire premium paid.
The client will pay an increased premium.
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Hearing $ eating
Dressing & seeing
Speaking & sleeping
Mobility & bathing
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Tommy Greene and Associates
Thomas Greene, CLU, & Company
Greene Insurance Agency
None of the would ever be automatically approved
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Protects an agent in the case of unintentional negligence.
Has very low deductibles.
Does not protect the agent if the case against him/her is frivolous.
Is unlimited.
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Fraud
Theft
Misreperesentation
Pre-texting
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As a life insurance product, future proceeds are tax free.
She has a 30 day free look period in case she changes her mind.
Since she only has a few more years before she retires, she should invest with the objective tho make as much money as possible. Her time horizon is limited.
She will have to begin taking withdrawals within six months of receiving the proceeds.
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Places property & casualty insurance with non-admitted carriers.
Negotiates life settlement contracts between an owner and providers.
Sells single premium immediate annuities to seniors.
Assists beneficiaries in filing a claim on a life insurance policy.
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$2,000 or less in coverage and premiums collected by agent.
$10,000 coverage and premiums paid by mail.
$50,000 coverage and premiums paid by mail.
$100,000 coverage and premiums collected by agent.
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The period of time in which a policy can be rescinded due to the applicants intentional or unintentional misstatements on the application.
The period of time in which the policy is still in force despite non-payment.
The period of time after the youngest child reaches 16, but before the widow reaches 60, in which the surviving spouse receives no Social Security benefits.
The period of time in which an employee is not yet eligible to join a group life insurance plan.
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Odds of sickness versus odds of disability.
Odds of dying versus the odds of disability.
Odds of sickness versus the odds of dying.
They are virtually the same concept.
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Variable annuity
Equity-Indexed annuity
Deferred annuity
Immediate annuity
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Identification of their relationship to the insurance company.
License number must appear in the same size font as the phone number.
Must not include any title, designations, or licenses that are not currently held.
All of the above.
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Qualified and unfunded
Fully funded and non-qualified
Qualified and non-qualified
Contributory and noncontributory
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Accept or deny the application after an exploratory hearing.
Deny the application without hearing.
Accept the application as other licenses have no bearing on this application.
Accept the application for a two year provisional license.
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65
100
35
70
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One business day
At least 24 hours
Prior to entering the home
Three calendar days
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Flexible Premium Immediate Annuity
Single Premium Deferred Annuity
Single Premium Immediate Annuity
Flexible Premium Deferred Annuity
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Possible arson activity
Ratings and claims abuses by the insurers
Possible fraudulent claims by the insured
Unfair trade practices by the insurer
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Life-only income
Interest-only to age 40
Fixed period
Fixed amount
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Life Guaranteed
Life with Period Certain
Life Income (Straight Life)
Life Refund Income
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Only when the cash value equals the death benefit
At any time
Within 30 days of an interest payment
Only if there are no outstanding loans
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Implied
Express
Apparent
Contractual
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Mandatory & optional
Permissive & mandatory
Mandatory & permissive
Mandatory & unknown
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Faces high catastrophic loss exposure
Is part of a large group of homogeneous exposure units
Has a market value difficult to determine
Holds no hardship to the owner should it be lost or damaged
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An agent
A broker
An insurer
An underwriter
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18 or 19, if unmarried and a student in elementary or secondary school
18
22 or 23, if unmarried and a college student
19
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$0
$4,000
$2,000
$900
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Cancellation Period
Elimination Period
Probationary Period
Grace Period
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Elected by the people of California every four years
Selected by the Governor as an appointee
Is a representative to the National Association of Insurance Commissioners (NAIC)
Capable of becoming the conservator of a financially impaired, or insolvent, insurer
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It dictates that if the insured and beneficiary die together, and the order of death is unknown, the beneficiary is presumed to have died first.
It protects the death benefit from attachment by creditors after the insured passes away.
It keeps the policy from being cancelled if, after two years, it is discovered that there was an error, concealment, or misrepresentation by the policy owner.
It keeps the policy from lapsing should the premium go unpaid by borrowing from the cash value.
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Full retirement age is 65 for all persons born after 1937.
Fully insured status can be achieved by paying the FICA tax for forty quarters/credits.
Retirement age is based upon the worker's birth year.
The worker's full retirement benefits are determined by the PIA.
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Annuities create an instant estate, while life insurance liquidate an estate.
Annuities provide a tax free income in retirement.
Life insurance can be funded monthly, while annuities require a lump-sum funding.
Life insurance creates an instant estate, while annuities liquidate a sum of money.
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A licensee has 30 days to update a change in address
Licensees are required to have an in-state residential address
Loss of a precious professional license could result in the automatic denial of the life-only license application
A plea of nolo contendere is considered a conviction, thus it could hinder attempts to obtain a life-only license
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Human losses
Liability losses
Financial losses
Property losses
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75% of eligible employees must elect to join the plan.
100% of eligible employees must participate.
75% of employees must elect to join the plan.
100% of employees must be allowed to participate.
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A civil penalty of up to $5,000 if his actions were not willful and $10,000 fine they were.
A cease and desist order will be issued.
A hearing will be called.
Darren will be charged with a felony and/or up to 10 years in jail.
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The policy is incontestable. Full claim will be paid.
The policy will be rescinded as it is contestable.
The proceeds payable will be adjusted.
The shortage of premium will be deducted from the death benefit.
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Unequal exchange in value.
Only one party to the contract is bound by a legally enforceable obligation.
If in dispute, the courts rule in favor of the insured, not the insurer.
Both parties to the contract are required to disclose to the other all material information.
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Any riders
Any document referenced by the policy
The policy
A copy of the application
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The insurer pays monthly disability income to the premium payor.
The insured is only covered to age 18, then the policy expires.
The owner of the policy is disabled or has died.
At age 21 or 25, the death benefit is reduced by up to 50%.
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Deductibility of premiums, taxable death benefits
Non-deductibility of premiums, non-taxable death benefits
Deductibility of premiums, non-taxable death benefits
Non-deductibility of premiums, taxable death benefits
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If a mutual company goes public, it demutualizes
Mutual companies issue policies referred to as participating
Policy dividends issued by mutual companies are guaranteed and not taxable
Dividends allow policyholders to share in a mutual companies divisible surplus
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