CA LIFE INSURANCE EXAM 2025/2026 | ACTUAL EXAM SET QUESTIONS AND VERIFIED ANSWERS (CORRECT SOLUTIONS)
What is meant by referring to an insurance policy as a unilateral contract? ✔️Only one party makes a legally enforceable promise.
When must insurance records of insurance agents and brokers be made available to the Insurance Commissioner? ✔️At all times.
Any situation that presents the possibility of a loss is known as ✔️a loss exposure
Which of the following information is not required to be communicated in a Life insurance contract? ✔️Personal judgment.
The direct distribution of insurance utilizes all of the following to promote the sale of insurance EXCEPT ✔️telephone call from an agent.
A contract in which one party promises to indemnify another against loss that arises from an unknown event is ✔️an insurance policy.
All of the occurrences listed below are examples of an insurable event as defined by the California Insurance Code EXCEPT ✔️an insured suffers
a financial loss in the state lottery
All of the following statements about aleatory contracts are true EXCEPT ✔️the insured and insurer contribute equally to the contract.
All of the following would be considered unfair trade practices EXCEPT ✔️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? ✔️Mary
Brown Insurance Services.
A contract of indemnity is one in which ✔️one party is restored to the same financial position the party was in before the loss occurred.
In insurance terminology, "indemnity" means ✔️make whole.
As defined in the California insurance Code, "insurance" is a ✔️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? ✔️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? ✔️Fiduciary
Which of the following statements regarding risk is TRUE? ✔️Only pure risks are insurable.
The purchase of an insurance policy may accomplish all of the following for the insured EXCEPT ✔️the elimination of risk.
Insureds are entitled to recover an amount NOT greater than the amount of their loss under the principle of ✔️indemnity.
What rule is used to determine the importance of a representation? ✔️The materiality of concealment.
The required contents of a policy include all of the following EXCEPT ✔️the probability of loss
All of the following are characteristics of reinsurance EXCEPT it ✔️increases the unearned premium reserve.
According to the California Insurance Code, an insurance policy must specify all of the following EXCEPT the ✔️financial rating of the insurer.
All of the following qualify as "background information" as defined in Section 1729.2 of the California Insurance Code, EXCEPT ✔️misdemeanor
charges filed, not resulting in a conviction.
Loss retention is an effective risk management technique when all of the following conditions exist EXCEPT the ✔️probability of loss is unknown.
A situation in which there is a possibility of loss or a gain is a ✔️speculative risk.
Why is having a large number of similar exposure units important to insurers? ✔️The greater the number insured, the more accurately the
insurer can predict losses and set appropriate premiums.
All of the following are benefits of insurance EXCEPT it ✔️eliminates fraudulent losses.
, Who are members of the Medical information Bureau? ✔️Life and health insurers.
The process by which an insurer decides whether to issue requested insurance is called ✔️underwriting.
Unless it is merely a statement of an expectation or belief, a representation as to the future is considered which of the following? ✔️Promise
Upon notification of a claim, a claimant must be given access to the California Fair Claims Settlement Practices resolution by all of the following
means EXCEPT ✔️by interview appointment with the agent of record.
hat is the definition of premium? ✔️Money an insured pays an insurer to obtain the benefits provided in the policy.
What is the goal of the underwriting process? ✔️to avoid selecting a disproportionate number of bad risks.
Insurer policy expenses include all of the following EXCEPT ✔️premiums.
Unintentional concealment entitles the injured party to which course of action, if any? ✔️Rescission of the contract.
Making an insured whole by restoring them to the same condition as before a loss is an example of ✔️the principle of indemnity.
Risk can be defined as all of the following EXCEPT ✔️the cause of loss
Which of the following is a requirement of a contract? ✔️There must be an offer and acceptance of the contract terms.
Moral hazard can be defined as the increase ✔️chance of a loss occurring due to an insured's dishonest tendencies.
According to the California Insurance Code, the Commissioner can disapprove a licensee's request to use a fictitious name for any of the
following reasons EXCEPT that the ✔️name is the licensee's actual name.
It is considered an unfair method of competition for an agent to advertise that the insurer the agent is appointed with is ✔️a member of the
Insurance Guarantee Association.
All of the following are requirements of contract EXCEPT ✔️there must be equal consideration between the parties.
If an insurer must have its rates accepted by the insurance Department prior to using them, the insurer would be operating in which of the
following types of jurisdictions? ✔️Prior approval.
It is Federal offense for an insurance agent to do all of the following EXCEPT ✔️misrepresent facts on an insurance application.
How often MUST an insurer file the National Association of Insurance Commissioners (NAIC) financial statement? ✔️Annually.
A person authorized by and on behalf of an insurer who transacts life, disability or life and accident and health insurance is defined as a ✔️life
agent.
An insurer entitled to transact business by complying with the California Insurance Code is known as an ✔️admitted carrier.
Who are the members of the Medical Information Bureau? ✔️Life and Health insurers.
If you have been convicted of a misdemeanor and that misdemeanor conviction is later expunged pursuant to California Penal Code Section
1203.4, which of the following is true? ✔️Even though your misdemeanor conviction was expunged, you must still disclose your misdemeanor
conviction on your individual application for an insurance license.
The direct response distribution of Insurance utilizes all of the following to promote the sales of insurance EXCEPT ✔️telephone call from the
agent.
The increase in the probability of a loss resulting from an insured's dishonest tendencies is known as ✔️moral hazard.
Which is an agreement in which an insurer contacts with a third party to insure itself against losses from insurance policies it issues?
✔️Reinsurance
Which if the following would an agent be guilty of for misrepresenting the amount of dividends a policy will pay? ✔️A misdemeanor.
What rule is used to determine the importance of a representation? ✔️The materiality of concealment.
Which of the following is a hazard? ✔️A condition that may increase the likelihood of a loss occurring.
What is meant by referring to an insurance policy as a unilateral contract? ✔️Only one party makes a legally enforceable promise.
When must insurance records of insurance agents and brokers be made available to the Insurance Commissioner? ✔️At all times.
Any situation that presents the possibility of a loss is known as ✔️a loss exposure
Which of the following information is not required to be communicated in a Life insurance contract? ✔️Personal judgment.
The direct distribution of insurance utilizes all of the following to promote the sale of insurance EXCEPT ✔️telephone call from an agent.
A contract in which one party promises to indemnify another against loss that arises from an unknown event is ✔️an insurance policy.
All of the occurrences listed below are examples of an insurable event as defined by the California Insurance Code EXCEPT ✔️an insured suffers
a financial loss in the state lottery
All of the following statements about aleatory contracts are true EXCEPT ✔️the insured and insurer contribute equally to the contract.
All of the following would be considered unfair trade practices EXCEPT ✔️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? ✔️Mary
Brown Insurance Services.
A contract of indemnity is one in which ✔️one party is restored to the same financial position the party was in before the loss occurred.
In insurance terminology, "indemnity" means ✔️make whole.
As defined in the California insurance Code, "insurance" is a ✔️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? ✔️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? ✔️Fiduciary
Which of the following statements regarding risk is TRUE? ✔️Only pure risks are insurable.
The purchase of an insurance policy may accomplish all of the following for the insured EXCEPT ✔️the elimination of risk.
Insureds are entitled to recover an amount NOT greater than the amount of their loss under the principle of ✔️indemnity.
What rule is used to determine the importance of a representation? ✔️The materiality of concealment.
The required contents of a policy include all of the following EXCEPT ✔️the probability of loss
All of the following are characteristics of reinsurance EXCEPT it ✔️increases the unearned premium reserve.
According to the California Insurance Code, an insurance policy must specify all of the following EXCEPT the ✔️financial rating of the insurer.
All of the following qualify as "background information" as defined in Section 1729.2 of the California Insurance Code, EXCEPT ✔️misdemeanor
charges filed, not resulting in a conviction.
Loss retention is an effective risk management technique when all of the following conditions exist EXCEPT the ✔️probability of loss is unknown.
A situation in which there is a possibility of loss or a gain is a ✔️speculative risk.
Why is having a large number of similar exposure units important to insurers? ✔️The greater the number insured, the more accurately the
insurer can predict losses and set appropriate premiums.
All of the following are benefits of insurance EXCEPT it ✔️eliminates fraudulent losses.
, Who are members of the Medical information Bureau? ✔️Life and health insurers.
The process by which an insurer decides whether to issue requested insurance is called ✔️underwriting.
Unless it is merely a statement of an expectation or belief, a representation as to the future is considered which of the following? ✔️Promise
Upon notification of a claim, a claimant must be given access to the California Fair Claims Settlement Practices resolution by all of the following
means EXCEPT ✔️by interview appointment with the agent of record.
hat is the definition of premium? ✔️Money an insured pays an insurer to obtain the benefits provided in the policy.
What is the goal of the underwriting process? ✔️to avoid selecting a disproportionate number of bad risks.
Insurer policy expenses include all of the following EXCEPT ✔️premiums.
Unintentional concealment entitles the injured party to which course of action, if any? ✔️Rescission of the contract.
Making an insured whole by restoring them to the same condition as before a loss is an example of ✔️the principle of indemnity.
Risk can be defined as all of the following EXCEPT ✔️the cause of loss
Which of the following is a requirement of a contract? ✔️There must be an offer and acceptance of the contract terms.
Moral hazard can be defined as the increase ✔️chance of a loss occurring due to an insured's dishonest tendencies.
According to the California Insurance Code, the Commissioner can disapprove a licensee's request to use a fictitious name for any of the
following reasons EXCEPT that the ✔️name is the licensee's actual name.
It is considered an unfair method of competition for an agent to advertise that the insurer the agent is appointed with is ✔️a member of the
Insurance Guarantee Association.
All of the following are requirements of contract EXCEPT ✔️there must be equal consideration between the parties.
If an insurer must have its rates accepted by the insurance Department prior to using them, the insurer would be operating in which of the
following types of jurisdictions? ✔️Prior approval.
It is Federal offense for an insurance agent to do all of the following EXCEPT ✔️misrepresent facts on an insurance application.
How often MUST an insurer file the National Association of Insurance Commissioners (NAIC) financial statement? ✔️Annually.
A person authorized by and on behalf of an insurer who transacts life, disability or life and accident and health insurance is defined as a ✔️life
agent.
An insurer entitled to transact business by complying with the California Insurance Code is known as an ✔️admitted carrier.
Who are the members of the Medical Information Bureau? ✔️Life and Health insurers.
If you have been convicted of a misdemeanor and that misdemeanor conviction is later expunged pursuant to California Penal Code Section
1203.4, which of the following is true? ✔️Even though your misdemeanor conviction was expunged, you must still disclose your misdemeanor
conviction on your individual application for an insurance license.
The direct response distribution of Insurance utilizes all of the following to promote the sales of insurance EXCEPT ✔️telephone call from the
agent.
The increase in the probability of a loss resulting from an insured's dishonest tendencies is known as ✔️moral hazard.
Which is an agreement in which an insurer contacts with a third party to insure itself against losses from insurance policies it issues?
✔️Reinsurance
Which if the following would an agent be guilty of for misrepresenting the amount of dividends a policy will pay? ✔️A misdemeanor.
What rule is used to determine the importance of a representation? ✔️The materiality of concealment.
Which of the following is a hazard? ✔️A condition that may increase the likelihood of a loss occurring.
