California Life, Accident, and Health Insurance State License Exam
Preparation Guide 2026–2027: Comprehensive Review with 300
Practice Questions and Verified Correct Answers
Employer-provided group term life insurance is exempt from income taxation up to
- Answer - $50,000
Medicare Part B has an initial enrollment period. How many months after an
individual's 65th birthday month does this enrollment period end? - Answer - 3
months
Which statement is true regarding policy dividends? - Answer - A dividend option
is selected by the insured at the time of policy purchase
What does the insurance term "indemnity" refer to? - Answer - Make whole
What is a common reason people purchase an annuity? - Answer - To protect
against the risk of outliving their financial resources
The importance of a representation is demonstrated in what rule? - Answer -
Materiality of concealment
Who does a life settlement broker represent? - Answer - Individual wanting to sell
their life policy to a third party
Who is financially liable for the payment of covered claims in a fully insured
group health plan? - Answer - Insurer
,The Human Life Value concept is based on - Answer - income
Business Overhead Expense Insurance pays for - Answer - business expenses when
a business owner becomes disabled
At what point does a self-insured group qualify for stop-loss coverage? - Answer -
When claims exceed a specified limit in a set period of time
What percentage of eligible employees must participate in a noncontributory group
health plan before it can be put in effect? - Answer - 100%
A life insurance policy where the insured can choose where the cash value can be
invested is called - Answer - variable life
Which of these statements correctly describes risk? - Answer - Pure and
speculative risks are both insurable
The elimination period in a disability income policy serves the same purpose as
a(n) ______ in a medical expense policy. - Answer - deductible
What is required after a life agent sells an insurance policy to an applicant without
being appointed by the insurer? - Answer - Notice of appointment must be
submitted to the Commissioner
Retirement plans are prevented from favoring highly compensated employees
under which government regulation? - Answer - Nondiscrimination
ESOPs are typically invested in - Answer - employer stock
,The reason for social insurance is to - Answer - protect certain vulnerable segments
of the population
Cindy buys a 10-year certain annuity with an installment refund. After receiving
monthly payments for 5 years, Cindy dies. How many remaining payments will the
insurer make to her beneficiary? - Answer - 60 payments
he free-look period for life insurance policyowners age 60 or older is - Answer - 30
days
What is considered to be the definition of disability, according to Social Security? -
Answer - Unable to engage in any substantial gainful activity
"Life insurance creates an immediate estate". This phrase means: - Answer - when
the insured dies, a death benefit is paid
How are death benefits that are received by a beneficiary normally treated for tax
purposes? - Answer - Exempt from federal income taxes
Exempt from federal income taxes - Answer - Payment for services goes directly to
the provider
When an insurance company requests an attending physician's report, the request
must be accompanied by a - Answer - copy of the signed authorization
Which policy provision protects the policyowner from unintentional lapse of the
contract? - Answer - Grace period
, What kind of annuity pays income to two annuitants until their deaths? - Answer -
Joint and survivor annuity
What type of changes can be made to a guaranteed renewable health insurance
policy? - Answer - The premium rates of the policyowner
Which of the following is NOT considered to be insurer expenses? - Answer -
Policy premiums
In what situation does a waiver of premium provision keep a health insurance
policy in force without premium payments? - Answer - When an insured becomes
totally disabled
What is an "insurance broker" according to California Insurance Code? - Answer -
A person authorized to assist a broker or agent in transacting insurance.
A participating company is also referred to as which type of insurer? - Answer -
Mutual insurer
Which of the following is NOT considered to be an act of insurance solicitation? -
Answer - Publishing a magazine where one of the advertisers is an insurer
Restoring an insured to the same condition as before a loss is an example of the
principle of - Answer - Indemnity
All of these are reasons the Commissioner may disapprove a licensee's request to
use a fictitious name EXCEPT - Answer - The name is the licensee's actual name
Preparation Guide 2026–2027: Comprehensive Review with 300
Practice Questions and Verified Correct Answers
Employer-provided group term life insurance is exempt from income taxation up to
- Answer - $50,000
Medicare Part B has an initial enrollment period. How many months after an
individual's 65th birthday month does this enrollment period end? - Answer - 3
months
Which statement is true regarding policy dividends? - Answer - A dividend option
is selected by the insured at the time of policy purchase
What does the insurance term "indemnity" refer to? - Answer - Make whole
What is a common reason people purchase an annuity? - Answer - To protect
against the risk of outliving their financial resources
The importance of a representation is demonstrated in what rule? - Answer -
Materiality of concealment
Who does a life settlement broker represent? - Answer - Individual wanting to sell
their life policy to a third party
Who is financially liable for the payment of covered claims in a fully insured
group health plan? - Answer - Insurer
,The Human Life Value concept is based on - Answer - income
Business Overhead Expense Insurance pays for - Answer - business expenses when
a business owner becomes disabled
At what point does a self-insured group qualify for stop-loss coverage? - Answer -
When claims exceed a specified limit in a set period of time
What percentage of eligible employees must participate in a noncontributory group
health plan before it can be put in effect? - Answer - 100%
A life insurance policy where the insured can choose where the cash value can be
invested is called - Answer - variable life
Which of these statements correctly describes risk? - Answer - Pure and
speculative risks are both insurable
The elimination period in a disability income policy serves the same purpose as
a(n) ______ in a medical expense policy. - Answer - deductible
What is required after a life agent sells an insurance policy to an applicant without
being appointed by the insurer? - Answer - Notice of appointment must be
submitted to the Commissioner
Retirement plans are prevented from favoring highly compensated employees
under which government regulation? - Answer - Nondiscrimination
ESOPs are typically invested in - Answer - employer stock
,The reason for social insurance is to - Answer - protect certain vulnerable segments
of the population
Cindy buys a 10-year certain annuity with an installment refund. After receiving
monthly payments for 5 years, Cindy dies. How many remaining payments will the
insurer make to her beneficiary? - Answer - 60 payments
he free-look period for life insurance policyowners age 60 or older is - Answer - 30
days
What is considered to be the definition of disability, according to Social Security? -
Answer - Unable to engage in any substantial gainful activity
"Life insurance creates an immediate estate". This phrase means: - Answer - when
the insured dies, a death benefit is paid
How are death benefits that are received by a beneficiary normally treated for tax
purposes? - Answer - Exempt from federal income taxes
Exempt from federal income taxes - Answer - Payment for services goes directly to
the provider
When an insurance company requests an attending physician's report, the request
must be accompanied by a - Answer - copy of the signed authorization
Which policy provision protects the policyowner from unintentional lapse of the
contract? - Answer - Grace period
, What kind of annuity pays income to two annuitants until their deaths? - Answer -
Joint and survivor annuity
What type of changes can be made to a guaranteed renewable health insurance
policy? - Answer - The premium rates of the policyowner
Which of the following is NOT considered to be insurer expenses? - Answer -
Policy premiums
In what situation does a waiver of premium provision keep a health insurance
policy in force without premium payments? - Answer - When an insured becomes
totally disabled
What is an "insurance broker" according to California Insurance Code? - Answer -
A person authorized to assist a broker or agent in transacting insurance.
A participating company is also referred to as which type of insurer? - Answer -
Mutual insurer
Which of the following is NOT considered to be an act of insurance solicitation? -
Answer - Publishing a magazine where one of the advertisers is an insurer
Restoring an insured to the same condition as before a loss is an example of the
principle of - Answer - Indemnity
All of these are reasons the Commissioner may disapprove a licensee's request to
use a fictitious name EXCEPT - Answer - The name is the licensee's actual name
