CA LIFE INSURANCE EXAM (2025/2026) QUESTIONS
AND (elaborated) ANSWETRS WITH COMPLETE
SOLUTIONS
What is meant by referring to an insurance policy as a unilateral contract? -
(ANSWER)Only one party makes a legally enforceable promise.
When must insurance records of insurance agents and brokers be made available
to the Insurance Commissioner? - (ANSWER)At all times.
Any situation that presents the possibility of a loss is known as - (ANSWER)a loss
exposure
Which of the following information is not required to be communicated in a Life
insurance contract? - (ANSWER)Personal judgment.
The direct distribution of insurance utilizes all of the following to promote the sale
of insurance EXCEPT - (ANSWER)telephone call from an agent.
A contract in which one party promises to indemnify another against loss that
arises from an unknown event is - (ANSWER)an insurance policy.
All of the occurrences listed below are examples of an insurable event as defined
by the California Insurance Code EXCEPT - (ANSWER)an insured suffers a financial
loss in the state lottery
,All of the following statements about aleatory contracts are true EXCEPT -
(ANSWER)the insured and insurer contribute equally to the contract.
All of the following would be considered unfair trade practices EXCEPT -
(ANSWER)committing any act of discrimination whether it be deemed fair or
unfair.
As authorized by the California Insurance Code, the Insurance Commissioner has
provided standards for names used by life insurance agents. Under these
standards which, if any, of the following are automatically acceptable for Mary
Brown, a holder of the CLU designation? - (ANSWER)Mary Brown Insurance
Services.
A contract of indemnity is one in which - (ANSWER)one party is restored to the
same financial position the party was in before the loss occurred.
In insurance terminology, "indemnity" means - (ANSWER)make whole.
As defined in the California insurance Code, "insurance" is a - (ANSWER)contract.
What would a person be guilty of who refuses to deliver any books, records, or
assets to the commissioner once a seizure order has been executed? -
(ANSWER)A misdemeanor
, An agent who is acting as an insurance agent, broker, solicitor, life agent, accident
and health, or bail agent acts in which capacity when handling premiums or
return premiums for an insured? - (ANSWER)Fiduciary
Which of the following statements regarding risk is TRUE? - (ANSWER)Only pure
risks are insurable.
The purchase of an insurance policy may accomplish all of the following for the
insured EXCEPT - (ANSWER)the elimination of risk.
Insureds are entitled to recover an amount NOT greater than the amount of their
loss under the principle of - (ANSWER)indemnity.
What rule is used to determine the importance of a representation? -
(ANSWER)The materiality of concealment.
The required contents of a policy include all of the following EXCEPT -
(ANSWER)the probability of loss
All of the following are characteristics of reinsurance EXCEPT it -
(ANSWER)increases the unearned premium reserve.
According to the California Insurance Code, an insurance policy must specify all of
the following EXCEPT the - (ANSWER)financial rating of the insurer.
AND (elaborated) ANSWETRS WITH COMPLETE
SOLUTIONS
What is meant by referring to an insurance policy as a unilateral contract? -
(ANSWER)Only one party makes a legally enforceable promise.
When must insurance records of insurance agents and brokers be made available
to the Insurance Commissioner? - (ANSWER)At all times.
Any situation that presents the possibility of a loss is known as - (ANSWER)a loss
exposure
Which of the following information is not required to be communicated in a Life
insurance contract? - (ANSWER)Personal judgment.
The direct distribution of insurance utilizes all of the following to promote the sale
of insurance EXCEPT - (ANSWER)telephone call from an agent.
A contract in which one party promises to indemnify another against loss that
arises from an unknown event is - (ANSWER)an insurance policy.
All of the occurrences listed below are examples of an insurable event as defined
by the California Insurance Code EXCEPT - (ANSWER)an insured suffers a financial
loss in the state lottery
,All of the following statements about aleatory contracts are true EXCEPT -
(ANSWER)the insured and insurer contribute equally to the contract.
All of the following would be considered unfair trade practices EXCEPT -
(ANSWER)committing any act of discrimination whether it be deemed fair or
unfair.
As authorized by the California Insurance Code, the Insurance Commissioner has
provided standards for names used by life insurance agents. Under these
standards which, if any, of the following are automatically acceptable for Mary
Brown, a holder of the CLU designation? - (ANSWER)Mary Brown Insurance
Services.
A contract of indemnity is one in which - (ANSWER)one party is restored to the
same financial position the party was in before the loss occurred.
In insurance terminology, "indemnity" means - (ANSWER)make whole.
As defined in the California insurance Code, "insurance" is a - (ANSWER)contract.
What would a person be guilty of who refuses to deliver any books, records, or
assets to the commissioner once a seizure order has been executed? -
(ANSWER)A misdemeanor
, An agent who is acting as an insurance agent, broker, solicitor, life agent, accident
and health, or bail agent acts in which capacity when handling premiums or
return premiums for an insured? - (ANSWER)Fiduciary
Which of the following statements regarding risk is TRUE? - (ANSWER)Only pure
risks are insurable.
The purchase of an insurance policy may accomplish all of the following for the
insured EXCEPT - (ANSWER)the elimination of risk.
Insureds are entitled to recover an amount NOT greater than the amount of their
loss under the principle of - (ANSWER)indemnity.
What rule is used to determine the importance of a representation? -
(ANSWER)The materiality of concealment.
The required contents of a policy include all of the following EXCEPT -
(ANSWER)the probability of loss
All of the following are characteristics of reinsurance EXCEPT it -
(ANSWER)increases the unearned premium reserve.
According to the California Insurance Code, an insurance policy must specify all of
the following EXCEPT the - (ANSWER)financial rating of the insurer.
