Spring SemeSter February 2026 CaliFornia liFe
inSuranCe exam prep | liCenSing review,
CaliFornia State lawS & regulationS, liFe
inSuranCe poliCy typeS, underwriting
prinCipleS, ethiCS, riSk management, ngn-Style
praCtiCe QueStionS & liCenSing exam SuCCeSS
guide
, Question 1:
Which of the following is NOT a primary purpose of life insurance?
A) Providing income for beneficiaries
B) Paying for medical expenses
C) Funding a business succession plan
D) Covering final expenses
Correct Option: B) Paying for medical expenses
Rationale:
The primary purposes of life insurance are to provide financial security for beneficiaries,
fund business succession, and cover final expenses upon the policyholder's death.
While life insurance can sometimes be used to cover certain medical expenses in
specific situations (for example, if the policy has living benefits), it is generally not
intended for that purpose.
Question 2:
In California, what is the maximum allowable free look period for individual life
insurance policies?
A) 10 days
B) 30 days
C) 60 days
D) 45 days
Correct Option: B) 30 days
Rationale:
California law allows a minimum free look period of 30 days for individual life insurance
policies. This period gives policyholders the right to review their policy and cancel it for
a full refund if they are not satisfied, ensuring consumer protection.
Question 3:
What is the primary difference between term life insurance and whole life
insurance?
A) Term life insurance accumulates cash value; whole life does not.
B) Whole life insurance provides coverage for a specified term; term does not.
C) Term life insurance provides coverage for a specified term; whole life covers the
insured for life.
D) There is no difference; they are the same product.
inSuranCe exam prep | liCenSing review,
CaliFornia State lawS & regulationS, liFe
inSuranCe poliCy typeS, underwriting
prinCipleS, ethiCS, riSk management, ngn-Style
praCtiCe QueStionS & liCenSing exam SuCCeSS
guide
, Question 1:
Which of the following is NOT a primary purpose of life insurance?
A) Providing income for beneficiaries
B) Paying for medical expenses
C) Funding a business succession plan
D) Covering final expenses
Correct Option: B) Paying for medical expenses
Rationale:
The primary purposes of life insurance are to provide financial security for beneficiaries,
fund business succession, and cover final expenses upon the policyholder's death.
While life insurance can sometimes be used to cover certain medical expenses in
specific situations (for example, if the policy has living benefits), it is generally not
intended for that purpose.
Question 2:
In California, what is the maximum allowable free look period for individual life
insurance policies?
A) 10 days
B) 30 days
C) 60 days
D) 45 days
Correct Option: B) 30 days
Rationale:
California law allows a minimum free look period of 30 days for individual life insurance
policies. This period gives policyholders the right to review their policy and cancel it for
a full refund if they are not satisfied, ensuring consumer protection.
Question 3:
What is the primary difference between term life insurance and whole life
insurance?
A) Term life insurance accumulates cash value; whole life does not.
B) Whole life insurance provides coverage for a specified term; term does not.
C) Term life insurance provides coverage for a specified term; whole life covers the
insured for life.
D) There is no difference; they are the same product.
