CA Life Insurance Exam UPDATED ACTUAL
Question and Answer | 100% Verified | 2026
• The type of life insurance used to provide funds for a Buy-Sell Agreement is: -
✓✓ -Any type of life insurance
Any type of life insurance may be used to provide funds for a Buy-Sell Agreement.
• Lorraine's position has been terminated, and she is interested in converting her
group life coverage to an individual policy. In the process, she will find all of the
following to be TRUE, except: -✓✓ -She will be converting her group term benefit
to an individual term benefit
She will be converting her group term life to an individual permanent policy.
• To help protect against experiencing immediate claims, group plans have a(n)
_______ period set up by the group sponsor. -✓✓ -Probationary
A probationary period is set up to help reduce the chance of facing immediate
claims.
• How is the funding for Social Security provided? -✓✓ -Through FICA taxes that
are paid by both employers and employees
,Both the employer and employee fund Social Security through paying FICA taxes.
Self-employed persons pay the entire amount.
• The premium for optional dependent group insurance can be payable by: -✓✓
The employer, the employee or both
Optional dependent coverage may be paid for by the employer, the employee, or
both.
• When an insurer wishes to implement changes to a group life policy, whom must
it notify? -✓✓ The group sponsor
Just as in individual contracts, the owner controls the policy. In this case, only the
plan sponsor has a policy (i.e. the Master Policy). As such, the insurer must notify
the group sponsor of the changes.
• There is a conversion period of how many days in which the employee may, upon
termination of eligibility and without evidence of insurability, convert his/her
group life insurance benefit to an individual permanent policy? -✓✓ 31
There is a conversion period of 31 days in which the employee may, upon
termination of eligibility and without evidence of insurability, convert his/her
group life insurance benefit to an individual permanent policy.
, • The proceeds from a _________ plan provide the necessary funds to recruit, hire,
and train a replacement employee. -✓✓ Key employee
Key employee life insurance plans provide the funds to recruit, hire, and train a
replacement employee.
• Which of the following is a disadvantage of being covered under a group
insurance plan? -✓✓ The group sponsor can elect to discontinue the plan, and the
insurance company can increase the rates it charges
• The advantage of an insurance funded buy-sell agreement is: -✓✓ It is a legally
enforceable agreement, which pre-establishes the value of the business, and
provides the funds for an efficient method of transferring the deceased's business
interest
Some of the advantages of having such an agreement: it is legally enforceable, the
value of the business is previously agreed upon, it is an immediate and automatic
method of transferring the deceased's interest due to readily available funds.
• An agreement by an employer to continue a key employee's salary upon
retirement, death or disability as long as the employee continues employment
during the term of the agreement is called a: -✓✓ Salary continuation plan
An agreement by an employer to continue a key employee's salary upon retirement,
death or disability as long as the employee continues employment during the term
of the agreement is called a salary continuation plan.
Question and Answer | 100% Verified | 2026
• The type of life insurance used to provide funds for a Buy-Sell Agreement is: -
✓✓ -Any type of life insurance
Any type of life insurance may be used to provide funds for a Buy-Sell Agreement.
• Lorraine's position has been terminated, and she is interested in converting her
group life coverage to an individual policy. In the process, she will find all of the
following to be TRUE, except: -✓✓ -She will be converting her group term benefit
to an individual term benefit
She will be converting her group term life to an individual permanent policy.
• To help protect against experiencing immediate claims, group plans have a(n)
_______ period set up by the group sponsor. -✓✓ -Probationary
A probationary period is set up to help reduce the chance of facing immediate
claims.
• How is the funding for Social Security provided? -✓✓ -Through FICA taxes that
are paid by both employers and employees
,Both the employer and employee fund Social Security through paying FICA taxes.
Self-employed persons pay the entire amount.
• The premium for optional dependent group insurance can be payable by: -✓✓
The employer, the employee or both
Optional dependent coverage may be paid for by the employer, the employee, or
both.
• When an insurer wishes to implement changes to a group life policy, whom must
it notify? -✓✓ The group sponsor
Just as in individual contracts, the owner controls the policy. In this case, only the
plan sponsor has a policy (i.e. the Master Policy). As such, the insurer must notify
the group sponsor of the changes.
• There is a conversion period of how many days in which the employee may, upon
termination of eligibility and without evidence of insurability, convert his/her
group life insurance benefit to an individual permanent policy? -✓✓ 31
There is a conversion period of 31 days in which the employee may, upon
termination of eligibility and without evidence of insurability, convert his/her
group life insurance benefit to an individual permanent policy.
, • The proceeds from a _________ plan provide the necessary funds to recruit, hire,
and train a replacement employee. -✓✓ Key employee
Key employee life insurance plans provide the funds to recruit, hire, and train a
replacement employee.
• Which of the following is a disadvantage of being covered under a group
insurance plan? -✓✓ The group sponsor can elect to discontinue the plan, and the
insurance company can increase the rates it charges
• The advantage of an insurance funded buy-sell agreement is: -✓✓ It is a legally
enforceable agreement, which pre-establishes the value of the business, and
provides the funds for an efficient method of transferring the deceased's business
interest
Some of the advantages of having such an agreement: it is legally enforceable, the
value of the business is previously agreed upon, it is an immediate and automatic
method of transferring the deceased's interest due to readily available funds.
• An agreement by an employer to continue a key employee's salary upon
retirement, death or disability as long as the employee continues employment
during the term of the agreement is called a: -✓✓ Salary continuation plan
An agreement by an employer to continue a key employee's salary upon retirement,
death or disability as long as the employee continues employment during the term
of the agreement is called a salary continuation plan.
