CA Life Insurance Exam
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1. An insurer that operates for one or more social, edu- C
cational, charitable, benevolent, or religious purposes
for the benefit of its members is known as a
a) Reciprocal insurer.
b) Stock insurer.
c) Fraternal insurer.
d) Mutual insurer.
2. Life insurance creates an immediate estate. Which of D
the following best explains this statement?
The policy has cash values and nonforfeiture values.
b) The policy generates immediate cash value.
c) The death benefit will always be paid to the estate
of the insured.
d) The face value of the policy is payable to the bene-
ficiary upon the death of the insured.
3. Which of the following is guaranteed under a variable A
whole life insurance policy?
a) Minimum death benefit
b) Interest rates
c) Cash value
d) Stock performance
4. Which of the following is NOT true regarding a de- B
ferred annuity?
a) The annuity grows tax deferred.
b) Income payments begin within 1 year from the date
of purchase.
c) It is used to accumulate funds for retirement.
d) It can be purchased with a single lump sum.
, CA Life Insurance Exam
Study online at https://quizlet.com/_b8djzi
5. Joe, age 63, was disabled and can no longer work. He B
meets the Social Security definition of total disability.
How many work credits must Joe have accumulated to
have the status of fully insured?
a) 20
b) 40
c) 10
d) 6
6. All of the following are advantages of a qualified re- C
tirement plan EXCEPT
a) The contribution is not taxable to the employee
when made.
b) The funds grow tax deferred.
c) The income at retirement is tax free.
d) The contribution is deductible to the employer.
7. If an insured purchases an insurance policy with a C
large deductible, what risk management technique is
the insured exercising?
a) Avoidance
b) Sharing
c) Retention
d) Transfer only
8. Key person insurance can provide protection for all of B
the following economic losses to a business EXCEPT
a) Fund the cost of training a current employee to
perform the duties of a deceased employee.
b) Pay the death benefit to the estate of the insured.
c) Provide deferred compensation retirement benefit
if the insured key person survives to retirement.
, CA Life Insurance Exam
Study online at https://quizlet.com/_b8djzi
d) Fund the expense of finding a suitable replacement
following the death of an employee.
9. According to the Common Disaster clause, if the in- C
sured and primary beneficiary are killed in the same
accident and it cannot be determined who died first,
which of the following will be assumed?
a) The estate of the primary beneficiary and the con-
tingent beneficiary split benefits equally.
b) The insured died before the primary beneficiary.
c) The primary beneficiary died before the insured.
d) The deaths occurred at the same time.
10. Any person to whom the Commissioner has issued a A
seizure order and who refuses to deliver any books,
records, or assets of an insurer faces the following
penalties:
a) A misdemeanor punishable by a fine up to $1,000,
a year in jail, or both.
b) A misdemeanor punishable by a $5,000 fine, if un-
intentional, or $10,000, if intentional.
c) Administrative fines only.
d) A felony punishable by a fine up to $1,000, a year in
prison, or both.
11. If an individual willfully violates provisions of the Fair B
Credit Reporting Act, what is the maximum civil penal-
ty?
a) $1,000
b) $2,500
c) $5,000
d) $10,000
, CA Life Insurance Exam
Study online at https://quizlet.com/_b8djzi
12. What type of insurer uses a formal sharing agree- D
ment?
a) Stock insurers
b) Mutual insurers
c) Fraternal Benefit Societies
d) Reciprocal insurers
13. In the Social Security blackout period, the surviving B
spouse will not receive benefits until the age of
a) 59 1/2.
b) 60.
c) 65.
d) 70 1/2
14. Which of the following is NOT a component of an C
insurance policy premium?
a) Insurer expenses
b) Investment return
c) Number of beneficiaries
d) Mortality cost
15. An insured intentionally did not disclose a material B
fact on an application for insurance. This would be
considered
a) Misrepresentation.
b) Concealment.
c) Coercion.
d) Avoidance.
16. As an insurer's field underwriter, a producer has all of A
the following responsibilities EXCEPT
a) Issuing policies on behalf of the insurer.
b) Completing applications.
Study online at https://quizlet.com/_b8djzi
1. An insurer that operates for one or more social, edu- C
cational, charitable, benevolent, or religious purposes
for the benefit of its members is known as a
a) Reciprocal insurer.
b) Stock insurer.
c) Fraternal insurer.
d) Mutual insurer.
2. Life insurance creates an immediate estate. Which of D
the following best explains this statement?
The policy has cash values and nonforfeiture values.
b) The policy generates immediate cash value.
c) The death benefit will always be paid to the estate
of the insured.
d) The face value of the policy is payable to the bene-
ficiary upon the death of the insured.
3. Which of the following is guaranteed under a variable A
whole life insurance policy?
a) Minimum death benefit
b) Interest rates
c) Cash value
d) Stock performance
4. Which of the following is NOT true regarding a de- B
ferred annuity?
a) The annuity grows tax deferred.
b) Income payments begin within 1 year from the date
of purchase.
c) It is used to accumulate funds for retirement.
d) It can be purchased with a single lump sum.
, CA Life Insurance Exam
Study online at https://quizlet.com/_b8djzi
5. Joe, age 63, was disabled and can no longer work. He B
meets the Social Security definition of total disability.
How many work credits must Joe have accumulated to
have the status of fully insured?
a) 20
b) 40
c) 10
d) 6
6. All of the following are advantages of a qualified re- C
tirement plan EXCEPT
a) The contribution is not taxable to the employee
when made.
b) The funds grow tax deferred.
c) The income at retirement is tax free.
d) The contribution is deductible to the employer.
7. If an insured purchases an insurance policy with a C
large deductible, what risk management technique is
the insured exercising?
a) Avoidance
b) Sharing
c) Retention
d) Transfer only
8. Key person insurance can provide protection for all of B
the following economic losses to a business EXCEPT
a) Fund the cost of training a current employee to
perform the duties of a deceased employee.
b) Pay the death benefit to the estate of the insured.
c) Provide deferred compensation retirement benefit
if the insured key person survives to retirement.
, CA Life Insurance Exam
Study online at https://quizlet.com/_b8djzi
d) Fund the expense of finding a suitable replacement
following the death of an employee.
9. According to the Common Disaster clause, if the in- C
sured and primary beneficiary are killed in the same
accident and it cannot be determined who died first,
which of the following will be assumed?
a) The estate of the primary beneficiary and the con-
tingent beneficiary split benefits equally.
b) The insured died before the primary beneficiary.
c) The primary beneficiary died before the insured.
d) The deaths occurred at the same time.
10. Any person to whom the Commissioner has issued a A
seizure order and who refuses to deliver any books,
records, or assets of an insurer faces the following
penalties:
a) A misdemeanor punishable by a fine up to $1,000,
a year in jail, or both.
b) A misdemeanor punishable by a $5,000 fine, if un-
intentional, or $10,000, if intentional.
c) Administrative fines only.
d) A felony punishable by a fine up to $1,000, a year in
prison, or both.
11. If an individual willfully violates provisions of the Fair B
Credit Reporting Act, what is the maximum civil penal-
ty?
a) $1,000
b) $2,500
c) $5,000
d) $10,000
, CA Life Insurance Exam
Study online at https://quizlet.com/_b8djzi
12. What type of insurer uses a formal sharing agree- D
ment?
a) Stock insurers
b) Mutual insurers
c) Fraternal Benefit Societies
d) Reciprocal insurers
13. In the Social Security blackout period, the surviving B
spouse will not receive benefits until the age of
a) 59 1/2.
b) 60.
c) 65.
d) 70 1/2
14. Which of the following is NOT a component of an C
insurance policy premium?
a) Insurer expenses
b) Investment return
c) Number of beneficiaries
d) Mortality cost
15. An insured intentionally did not disclose a material B
fact on an application for insurance. This would be
considered
a) Misrepresentation.
b) Concealment.
c) Coercion.
d) Avoidance.
16. As an insurer's field underwriter, a producer has all of A
the following responsibilities EXCEPT
a) Issuing policies on behalf of the insurer.
b) Completing applications.
