California Life Insurance State Exam
Simulator Questions And Answers
Verified 100% Correct
A return of excess premium and not taxable - ANSWER -How is a life insurance
policy dividend legally defined?
A return of excess premium and partially taxable
A return of excess of premium and fully taxable
A return of excess premium and not taxable
A return of excess premium subject to capital gain tax
Dividend schedule - ANSWER -Which of the following does a policyowner NOT
have the right to change?
Payment method
Dividend option
Dividend schedule
Beneficiary
Grace period - ANSWER -What time period allows an insured's life insurance
policy to remain in force even if the premium was not paid on the due date?
Entire contract period
Free-look period
Reinstatement period
Grace period
Reinstatement provision - ANSWER -After a policy has lapsed, which provision
allows the insured to continue coverage?
Entire contract provision
Reinstatement provision
Nonforfeiture provision
Grace period provision
, Waiver of premium provision - ANSWER -Bruce is involved in an accident and
becomes totally and permanently disabled. His insurance policy continues in force
without payment of further premiums. Which policy provision is responsible for
this?
Waiver of premium provision
Insuring provision
Return of premium provision
Automatic premium loan provision
Suicide clause - ANSWER -An insurer can be protected from adverse selection
with which policy provision?
Insuring clause
Grace period
Suicide clause
Reinstatement
A dividend option is selected by the insured at the time of policy purchase -
ANSWER -Which statement is true regarding policy dividends?
Dividends are always guaranteed
Nonparticipating policies issue dividends
A dividend option is selected by the insured at the time of policy purchase
Purchase additional coverage with no evidence of insurability required -
ANSWER -What does the guaranteed insurability option allow an insured to do?
Transfer ownership of the policy
Purchase additional coverage with no evidence of insurability required
Provides for the early payment of some portion of the policy face amount should
the insured suffer from a terminal illness
Allows the insured to convert a term life policy to whole life with no evidence of
insurability required
Insured becomes totally disabled - ANSWER -When does a life insurance policy's
waiver of premium take effect?
Insured becomes unemployed
,Insured becomes totally disabled
Insured has had policy in force for a specified number of years
Insured has become terminally ill
Nonforfeiture options - ANSWER -A life insurance police can be surrendered for
its cash value under which policy provision?
Payor options
Dividend options
Settlement options
Nonforfeiture options
Extended term - ANSWER -Which of the following is NOT a common life
insurance policy rider?
Extended term
Automatic premium loan
Waiver of premium
Accidental death
12/15th of the policy's face amount - ANSWER -Jerry is an insured who
understated his age on his life insurance application, paying $12 per $1,000 of
insurance instead of $15 per $1,000. If he dies, how will the adjusted death benefit
be calculated?
12/15th of the policy's face amount
1/2 of the policy's face amount
3/4 of the policy's face amount
Full face amount
Policy and attached application - ANSWER -In a life insurance policy, the entire
contract consists of
Policy and conditional receipt
Policy and all sales material
Policy and any verbal agreements
Policy and attached application
, Modified premium, ordinary life, single premium - ANSWER -What is the proper
order of initial life insurance premiums, from lowest to highest?
Ordinary life, single premium, modified premium
Modified premium, ordinary life, single premium
Single premium, modified premium, ordinarylife
Ordinary life, modified premium, single premium
Non-medical - ANSWER -Which of the following is a life insurance policy that
does NOT require a physical exam?
Non-medical
Graded
Substandard
Noncancelable
Require a higher premium payable at each renewal - ANSWER -In a renewable
tern life insurance policy, the contract will usually
Require a higher premium payable at each renewal
Require a lower premium payable at each renewal
Stipulate a higher cash value at each renewal
Mortgage redemption - ANSWER -Scott has just purchased a new house. He is
now shopping for a life insurance policy that provides a death benefit that matches
the projected outstanding debt of his mortgage. Which life policy would best suit
his needs?
Variable
Universal
Adjustable
Mortgage redemption
Endowment insurance - ANSWER -A life insurance policy that pays the face
amount if the insured survives to a specified period of time is called
Universal life
Endowment insurance
Modified life
Whole life
Simulator Questions And Answers
Verified 100% Correct
A return of excess premium and not taxable - ANSWER -How is a life insurance
policy dividend legally defined?
A return of excess premium and partially taxable
A return of excess of premium and fully taxable
A return of excess premium and not taxable
A return of excess premium subject to capital gain tax
Dividend schedule - ANSWER -Which of the following does a policyowner NOT
have the right to change?
Payment method
Dividend option
Dividend schedule
Beneficiary
Grace period - ANSWER -What time period allows an insured's life insurance
policy to remain in force even if the premium was not paid on the due date?
Entire contract period
Free-look period
Reinstatement period
Grace period
Reinstatement provision - ANSWER -After a policy has lapsed, which provision
allows the insured to continue coverage?
Entire contract provision
Reinstatement provision
Nonforfeiture provision
Grace period provision
, Waiver of premium provision - ANSWER -Bruce is involved in an accident and
becomes totally and permanently disabled. His insurance policy continues in force
without payment of further premiums. Which policy provision is responsible for
this?
Waiver of premium provision
Insuring provision
Return of premium provision
Automatic premium loan provision
Suicide clause - ANSWER -An insurer can be protected from adverse selection
with which policy provision?
Insuring clause
Grace period
Suicide clause
Reinstatement
A dividend option is selected by the insured at the time of policy purchase -
ANSWER -Which statement is true regarding policy dividends?
Dividends are always guaranteed
Nonparticipating policies issue dividends
A dividend option is selected by the insured at the time of policy purchase
Purchase additional coverage with no evidence of insurability required -
ANSWER -What does the guaranteed insurability option allow an insured to do?
Transfer ownership of the policy
Purchase additional coverage with no evidence of insurability required
Provides for the early payment of some portion of the policy face amount should
the insured suffer from a terminal illness
Allows the insured to convert a term life policy to whole life with no evidence of
insurability required
Insured becomes totally disabled - ANSWER -When does a life insurance policy's
waiver of premium take effect?
Insured becomes unemployed
,Insured becomes totally disabled
Insured has had policy in force for a specified number of years
Insured has become terminally ill
Nonforfeiture options - ANSWER -A life insurance police can be surrendered for
its cash value under which policy provision?
Payor options
Dividend options
Settlement options
Nonforfeiture options
Extended term - ANSWER -Which of the following is NOT a common life
insurance policy rider?
Extended term
Automatic premium loan
Waiver of premium
Accidental death
12/15th of the policy's face amount - ANSWER -Jerry is an insured who
understated his age on his life insurance application, paying $12 per $1,000 of
insurance instead of $15 per $1,000. If he dies, how will the adjusted death benefit
be calculated?
12/15th of the policy's face amount
1/2 of the policy's face amount
3/4 of the policy's face amount
Full face amount
Policy and attached application - ANSWER -In a life insurance policy, the entire
contract consists of
Policy and conditional receipt
Policy and all sales material
Policy and any verbal agreements
Policy and attached application
, Modified premium, ordinary life, single premium - ANSWER -What is the proper
order of initial life insurance premiums, from lowest to highest?
Ordinary life, single premium, modified premium
Modified premium, ordinary life, single premium
Single premium, modified premium, ordinarylife
Ordinary life, modified premium, single premium
Non-medical - ANSWER -Which of the following is a life insurance policy that
does NOT require a physical exam?
Non-medical
Graded
Substandard
Noncancelable
Require a higher premium payable at each renewal - ANSWER -In a renewable
tern life insurance policy, the contract will usually
Require a higher premium payable at each renewal
Require a lower premium payable at each renewal
Stipulate a higher cash value at each renewal
Mortgage redemption - ANSWER -Scott has just purchased a new house. He is
now shopping for a life insurance policy that provides a death benefit that matches
the projected outstanding debt of his mortgage. Which life policy would best suit
his needs?
Variable
Universal
Adjustable
Mortgage redemption
Endowment insurance - ANSWER -A life insurance policy that pays the face
amount if the insured survives to a specified period of time is called
Universal life
Endowment insurance
Modified life
Whole life
