CA LIFE INSURANCE EXAM QUESTIONS WITH COMPLETE
SOLUTION
An insurer that operates for one or more social, educational,
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.
C
Life insurance creates an immediate estate. Which of 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 beneficiary upon the
death of the insured.
D
Which of the following is guaranteed under a variable whole life
insurance policy?
a) Minimum death benefit
b) Interest rates
c) Cash value
d) Stock performance
A
Which of the following is NOT true regarding a deferred 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.
B
Joe, age 63, was disabled and can no longer work. He 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
B
All of the following are advantages of a qualified retirement 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.
C
If an insured purchases an insurance policy with a large deductible,
what risk management technique is the insured exercising?
a) Avoidance
b) Sharing
c) Retention
d) Transfer only
C
Key person insurance can provide protection for all of 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.
d) Fund the expense of finding a suitable replacement following the
death of an employee.
B
According to the Common Disaster clause, if the insured 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 contingent 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.
C
Any person to whom the Commissioner has issued 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 unintentional, 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.
A
If an individual willfully violates provisions of the Fair Credit
Reporting Act, what is the maximum civil penalty?
a) $1,000
b) $2,500
c) $5,000
d) $10,000
B
What type of insurer uses a formal sharing agreement?
a) Stock insurers
b) Mutual insurers
c) Fraternal Benefit Societies
d) Reciprocal insurers
D
In the Social Security blackout period, the surviving spouse will not
receive benefits until the age of
a) 59 1/2.
b) 60.
c) 65.
d) 70 1/2
B
Which of the following is NOT a component of an insurance policy
premium?
a) Insurer expenses
b) Investment return
c) Number of beneficiaries
d) Mortality cost
C
An insured intentionally did not disclose a material fact on an
application for insurance. This would be considered
a) Misrepresentation.
b) Concealment.
c) Coercion.
d) Avoidance.
B
, As an insurer's field underwriter, a producer has all of the following
responsibilities EXCEPT
a) Issuing policies on behalf of the insurer.
b) Completing applications.
c) Soliciting insurance contracts.
d) Collecting premiums.
A
According to the life insurance replacement regulations, which of the
following would be an example of policy replacement?
a) A term policy expires, and the insured buys another term life
policy.
b) Term insurance is changed to a Whole Life policy.
c) A lapsed policy is reinstated within a specific timeframe.
d) A policy is reissued with a reduction in cash value.
D
Guaranteeing future dividends is considered to be an unfair or
deceptive act known as
a) Misrepresentation.
b) Twisting.
c) False financial statements.
d) Rebating.
A
At what point would an automatic premium loan be generated?
a) Upon the surrender of the policy
b) Following the grace period
c) Upon the insured's death
d) Once the policy is delivered
B
All of the following are true regarding the waiver of cost of insurance
rider EXCEPT
a) The rider waives insurance costs in the event the insured becomes
disabled.
b) The rider is only applicable to universal life policies.
c) The rider cannot waive the cost of premiums that accumulate cash
value.
d) The rider expires when the insured reaches age 60.
D
All of the following are true of the Survivorship Life policy EXCEPT
a) It can insure more than 2 lives.
b) The premium is based on the age of each insured.
SOLUTION
An insurer that operates for one or more social, educational,
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.
C
Life insurance creates an immediate estate. Which of 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 beneficiary upon the
death of the insured.
D
Which of the following is guaranteed under a variable whole life
insurance policy?
a) Minimum death benefit
b) Interest rates
c) Cash value
d) Stock performance
A
Which of the following is NOT true regarding a deferred 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.
B
Joe, age 63, was disabled and can no longer work. He 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
B
All of the following are advantages of a qualified retirement 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.
C
If an insured purchases an insurance policy with a large deductible,
what risk management technique is the insured exercising?
a) Avoidance
b) Sharing
c) Retention
d) Transfer only
C
Key person insurance can provide protection for all of 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.
d) Fund the expense of finding a suitable replacement following the
death of an employee.
B
According to the Common Disaster clause, if the insured 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 contingent 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.
C
Any person to whom the Commissioner has issued 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 unintentional, 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.
A
If an individual willfully violates provisions of the Fair Credit
Reporting Act, what is the maximum civil penalty?
a) $1,000
b) $2,500
c) $5,000
d) $10,000
B
What type of insurer uses a formal sharing agreement?
a) Stock insurers
b) Mutual insurers
c) Fraternal Benefit Societies
d) Reciprocal insurers
D
In the Social Security blackout period, the surviving spouse will not
receive benefits until the age of
a) 59 1/2.
b) 60.
c) 65.
d) 70 1/2
B
Which of the following is NOT a component of an insurance policy
premium?
a) Insurer expenses
b) Investment return
c) Number of beneficiaries
d) Mortality cost
C
An insured intentionally did not disclose a material fact on an
application for insurance. This would be considered
a) Misrepresentation.
b) Concealment.
c) Coercion.
d) Avoidance.
B
, As an insurer's field underwriter, a producer has all of the following
responsibilities EXCEPT
a) Issuing policies on behalf of the insurer.
b) Completing applications.
c) Soliciting insurance contracts.
d) Collecting premiums.
A
According to the life insurance replacement regulations, which of the
following would be an example of policy replacement?
a) A term policy expires, and the insured buys another term life
policy.
b) Term insurance is changed to a Whole Life policy.
c) A lapsed policy is reinstated within a specific timeframe.
d) A policy is reissued with a reduction in cash value.
D
Guaranteeing future dividends is considered to be an unfair or
deceptive act known as
a) Misrepresentation.
b) Twisting.
c) False financial statements.
d) Rebating.
A
At what point would an automatic premium loan be generated?
a) Upon the surrender of the policy
b) Following the grace period
c) Upon the insured's death
d) Once the policy is delivered
B
All of the following are true regarding the waiver of cost of insurance
rider EXCEPT
a) The rider waives insurance costs in the event the insured becomes
disabled.
b) The rider is only applicable to universal life policies.
c) The rider cannot waive the cost of premiums that accumulate cash
value.
d) The rider expires when the insured reaches age 60.
D
All of the following are true of the Survivorship Life policy EXCEPT
a) It can insure more than 2 lives.
b) The premium is based on the age of each insured.
