California Life and Health Insurance Final Exam Questions and
Answers
Question 1
Jim is the insured on a health insurance policy and holds two jobs. If "occupation" is used to classify the risk, the insurer will
most likely classify Jim according to the occupation that
Correct Answer
is most hazardous
Question 2
A life insurance policy that pays the face amount if the insured survives to a specified period of time is called
Correct Answer
endowment insurance
Question 3
Which of the following is any situation that presents the possibility of a loss?
Correct Answer
Loss exposure
Page 1 of 38
,Question 4
mployee participation in a noncontributory group life plan must be
Correct Answer
100%
Question 5
Periodic increases in policy benefits are allowed in which long-term care policy provision?
Correct Answer
Inflation protection
Question 6
An insurer that has been found using higher rates based on race, religion, or ethnicity is said to be engaging in
Correct Answer
unfair discrimination
Question 7
Which of the following is NOT included in comprehensive major medical plans?
Correct Answer
First-dollar coverage
Page 2 of 38
,Question 8
Employer-provided group term life insurance is exempt from income taxation up to
Correct Answer
$50,000
Question 9
During the underwriting process for a group health policy, it was discovered that 15 out of 50 members of the group have
major health issues. How would the insurer handle this?
Correct Answer
Accept or reject the whole group
Question 10
Medicare Part B has an initial enrollment period. How many months after an individual's 65th birthday month does this
enrollment period end?
Correct Answer
3 months
Question 11
Pete is a life agent who has misappropriated fiduciary funds to his own use. What is Pete guilty of?
Correct Answer
Theft
Page 3 of 38
, Question 12
Mark, age 45, has a Modified Endowment Contract (MEC). What is the tax penalty for taking a loan against this policy prior
to age 59 1/2?
Correct Answer
10%
Question 13
Premiums are best described as
Correct Answer
the amount an insured pays per unit of coverage
Question 14
What does the insurance term "indemnity" refer to?
Correct Answer
Make whole
Question 15
Buy-sell plans are typically funded by which two types of insurance?
Correct Answer
Life insurance and disability insurance
Page 4 of 38
Answers
Question 1
Jim is the insured on a health insurance policy and holds two jobs. If "occupation" is used to classify the risk, the insurer will
most likely classify Jim according to the occupation that
Correct Answer
is most hazardous
Question 2
A life insurance policy that pays the face amount if the insured survives to a specified period of time is called
Correct Answer
endowment insurance
Question 3
Which of the following is any situation that presents the possibility of a loss?
Correct Answer
Loss exposure
Page 1 of 38
,Question 4
mployee participation in a noncontributory group life plan must be
Correct Answer
100%
Question 5
Periodic increases in policy benefits are allowed in which long-term care policy provision?
Correct Answer
Inflation protection
Question 6
An insurer that has been found using higher rates based on race, religion, or ethnicity is said to be engaging in
Correct Answer
unfair discrimination
Question 7
Which of the following is NOT included in comprehensive major medical plans?
Correct Answer
First-dollar coverage
Page 2 of 38
,Question 8
Employer-provided group term life insurance is exempt from income taxation up to
Correct Answer
$50,000
Question 9
During the underwriting process for a group health policy, it was discovered that 15 out of 50 members of the group have
major health issues. How would the insurer handle this?
Correct Answer
Accept or reject the whole group
Question 10
Medicare Part B has an initial enrollment period. How many months after an individual's 65th birthday month does this
enrollment period end?
Correct Answer
3 months
Question 11
Pete is a life agent who has misappropriated fiduciary funds to his own use. What is Pete guilty of?
Correct Answer
Theft
Page 3 of 38
, Question 12
Mark, age 45, has a Modified Endowment Contract (MEC). What is the tax penalty for taking a loan against this policy prior
to age 59 1/2?
Correct Answer
10%
Question 13
Premiums are best described as
Correct Answer
the amount an insured pays per unit of coverage
Question 14
What does the insurance term "indemnity" refer to?
Correct Answer
Make whole
Question 15
Buy-sell plans are typically funded by which two types of insurance?
Correct Answer
Life insurance and disability insurance
Page 4 of 38
