CA State Life Insurance Practice Exam A 75 Questions with Answers,100% CORRECT

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CA State Life Insurance Practice Exam A 75 Questions with Answers Single premium deferred annuity - CORRECT ANSWER An annuity that is purchased with a slump sum premium and whose benefits begin af... ter 12 month is called a Human Life Value Approach - CORRECT ANSWER A technique used to determine the amount of life insurance needed by focusing on the projected earning potential of an insured is called the At the time of taking the application - CORRECT ANSWER When replacing a policy the producer must present the applicant with a Notice Regarding Replacement of Life Insurance Risk - CORRECT ANSWER The possibility of a financial loss incurred by a life insurance company for the premature death of an insured is known as a Medical information on applicants for life and health insurance - CORRECT ANSWER The Medical Information Bureau (MIB) is a nonprofit trade association that maintains Perjury - CORRECT ANSWER A person who signs a fraudulent claim form may be found guilty of Universal life - CORRECT ANSWER Which policy is a combination of annual renewable term insurance and interest-sensitive cash value? 30 Days - CORRECT ANSWER The right to a full refund of premiums for insureds age 60 or older is Frequency of premium payment - CORRECT ANSWER The premium modes can be best described as the Concealment - CORRECT ANSWER Intentionally omitting a history of heart problems on an application is Nonprofit organizations - CORRECT ANSWER A tax-sheltered annuity (TSA) is a qualified plan available for Policy owner - CORRECT ANSWER The intent of replacement regulations is to protect the Reinstatement - CORRECT ANSWER Which provision allows a lapsed policy to be put back in force? Alien Insurer - CORRECT ANSWER According to the California Department of Insurance, an insurer whose articles of incorporation are registered in Oslo, Norway is considered a/an Rate of Death - CORRECT ANSWER Mortality is defined as the A group may exist for the purpose of purchasing insurance. - CORRECT ANSWER Which of the following is NOT a characteristic of group life insurance? May allow life insurance companies to start coverage before policy delivery - CORRECT ANSWER When a producer collects the initial premium and issues a conditional receipt, the receipt Members of a group of individuals with similar risks. - CORRECT ANSWER The law of large numbers allows an insurance company to predict the expected losses among Insolvent - CORRECT ANSWER If an insurer's legal reserve funds are found to be less than the minimum required by aw, the insurer is considered Decreasing term - CORRECT ANSWER Which type of policy would be suitable to protect the balance of a home mortgage? At the time of application - CORRECT ANSWER When must insurable interest exist? Long-term care - CORRECT ANSWER The rider that provides for partial payment of the death benefit in advance to help with nursing or convalescent home expenses is the Refund life annuity - CORRECT ANSWER Which annuity payout options guarantees the return of all the principal invested in the contract? They pay dividends to stockholders - CORRECT ANSWER Which of the following statements is NOT true about participating policies? Utmost good faith - CORRECT ANSWER Insurance contracts are based upon a doctrine which requires all parties to the contract to be honest. This is known as the doctrine of 5 years - CORRECT ANSWER According to the California Insurance Code, life-only producers must keep records of their transactions for at least Unilateral - CORRECT ANSWER Which of these is NOT an element of a legal contract? Income payments vary from month to month - CORRECT ANSWER Which statement is INCORRECT about a fixed annuity? Master contract - CORRECT ANSWER In a group policy, the employer receives Exposure - CORRECT ANSWER The risk of a loss to an insurance company is also referred to as a/an Lower in the early years of the contract - CORRECT ANSWER With a modified premium whole life contract, premium payments are Adjust the death benefit - CORRECT ANSWER If a mistreatment of age is discovered during the processing of a life insurance claim, the insurer will Accumulation period - CORRECT ANSWER The pay-in time for deferred annuities is known as the Representations - CORRECT ANSWER Statements made by an applicant on an application for insurance are considered to be Peril - CORRECT ANSWER The cause of a loss is known as a/an Fiduciary - CORRECT ANSWER When a producer, broker, or solicitor handles premiums for an insurer, they are acting in which of the following capacities? Substandard - CORRECT ANSWER What is the risk classification for those who are insurable but have a higher than average risk? Life only - CORRECT ANSWER The option that pays a specified amount to the annuitant with no remaining value payable to a beneficiary is Not taxable - CORRECT ANSWER Money borrowed from a life insurance policy's cash value is Moral hazard - CORRECT ANSWER An insured who submits a fraudulent claim to an insurer is an example of a/an Variable universal life - CORRECT ANSWER Selling which of the following policies would require a license issues by FINRA? Insurance - CORRECT ANSWER The transfer of a possible financial loss to another party refers to Ordinary (straight) life - CORRECT ANSWER The type of whole life insurance where premiums are payable over the whole life of the insured to age 100 is called Exposure - CORRECT ANSWER Which of the following is NOT a risk management technique? Workers Compensation - CORRECT ANSWER Social Security benefits do NOT include Catastrophic - CORRECT ANSWER To be insurable, a risk must NOT be Not subject to any taxes - CORRECT ANSWER A life insurance death benefit paid in a lump sum to a beneficiary is Buy-sell agreement - CORRECT ANSWER 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? Convertible term policy - CORRECT ANSWER The type of policy that can be changed from one that does not have cash value to one that does is a Policy Summary - CORRECT ANSWER Which document describes the specific features and elements of a policy? Conservation - CORRECT ANSWER 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 Tort - CORRECT ANSWER A private and civil wrong for which a remedy may be sought through legal action is known as a Accumulation value of the premiums paid, whichever is greater - CORRECT ANSWER If an annuitant dies before the annuitization period, what proceeds will the beneficiary receive? 24-hour care coverage - CORRECT ANSWER Life-only agents may transact all of the following types of insurance EXCEPT Usually requires additional premium - CORRECT ANSWER Which of the following is NOT a characteristic of the Accelerated Benefit (living needs) rider? The portion that exceeds the premiums paid is taxable. - CORRECT ANSWER If the cash value exceeds the premiums paid in a whole life policy, what are the tax consequences if the policy is surrendered? Contract of adhesion - CORRECT ANSWER When one party prepares the contract and the other party either accepts of rejects the contract, it is a(n) Straight life - CORRECT ANSWER Which of the following policies could be expected to have the lowest premium? Cost of living - CORRECT ANSWER Which rider may increase the value of the policy due to an increase in the Consumer Price Index (CPI) Witness the applicants signature - CORRECT ANSWER When completing an application for life insurance, a producer should do which of the following? Having the possibility for loss of gain - CORRECT ANSWER Which of the following characterizes a speculative risk? Consideration - CORRECT ANSWER Which policy provision includes the application and the first premium from the insured and the promise to pay from the insurer? Attained are - CORRECT ANSWER The guaranteed insurability rider allows the policy owner to purchase additional insurance at the insured's Joint life - CORRECT ANSWER A life policy that covers two lives and provides for payment of the death benefit upon the death of the first insured is called Applicant - CORRECT ANSWER Whose signature is required to make changes to a written application for a life insurance policy? Twisting - CORRECT ANSWER 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 Determining the company's risk regarding a proposed insured - CORRECT ANSWER Underwriting is the process of Split Dollar Plans - CORRECT ANSWER An arrangement where the employer and employee agree to purchase and fund life insurance on an employee is known as a Benefits will stop when the last annuitant dies - CORRECT ANSWER Which of the following is TRUE about a joint and survivor life annuity? Offer & acceptance - CORRECT ANSWER A contract's agreement for life insurance is composed of a(n) Death benefit of a life insurance policy - CORRECT ANSWER Term limit on liability refers to the Family policy - CORRECT ANSWER A policy that combines whole life on the breadwinner and term on the spouse and children is called a Extended term - CORRECT ANSWER Which nonforfeiture values maintains the original face value of the contract but sacrifices the length of the contract? Retention - CORRECT ANSWER Which method of handling risk is self-insurance? At the time of application - CORRECT ANSWER When must insurable interest exist? [Show More]

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