CALIFORNIA LIFE, ACCIDENT & HEALTH INSURANCE
FINAL EXAM
COMPREHENSIVE PRACTICE (2026/2027 Edition)
California Department of Insurance (CDI) Licensing Preparation
100 Questions with Correct Answers & Rationale
Format: 100 multiple-choice questions (single best answer, A–D).
Structure: Ten sections spanning life, health, disability, group, CA law, underwriting,
annuities, and taxation.
Cognitive ~30% recall • ~50% application • ~20% analysis.
levels:
Grading: One point per question; correct answer and rationale provided after each
item.
Content basis: California Department of Insurance requirements, California Insurance Code,
federal/state regulations, ACA/Medicare/Medi-Cal, and NAIC model
standards for the 2026/2027 period.
Special 5 CA-mandated benefits; 3 CDI consumer-complaint/producer/reporting
inclusions: items; 2 comprehensive case studies (estate planning with life insurance;
group plan + Medicare coordination).
Important This is an independent practice exam for educational study; it is not an official
note: CDI licensing exam.
, Section 1: Life Insurance Basics & Policy Provisions (15 questions)
Q1: The policy provision that prevents an insurer from contesting the validity of a policy after a
specified period (usually 2 years) is the:
A. Incontestability clause [CORRECT]
B. Grace period clause
C. Suicide clause
D. Reinstatement clause
Correct Answer: A
Rationale: A is correct: incontestability bars contest after the period. B, C, and D are other provisions.
Q2: The period after the premium due date during which the policy remains in force is the:
A. Contestability period
B. Grace period [CORRECT]
C. Elimination period
D. Free-look period
Correct Answer: B
Rationale: A is correct: the grace period allows late payment. B, C, and D are other periods.
Q3: The provision that returns premiums (or cash value) if the insured dies by suicide within the
policy's first two years is the:
A. Incontestability clause
B. Reinstatement clause
C. Suicide clause [CORRECT]
D. Assignment clause
Correct Answer: C
Rationale: A is correct: the suicide clause limits payment in the first two years. B, C, and D are other clauses.
Q4: The person named in the policy to receive the death benefit is the:
A. Contingent owner
B. Policyowner
C. Producer
D. Beneficiary [CORRECT]
Correct Answer: D
Rationale: A is correct: the beneficiary receives the benefit. B, C, and D are other roles.
Q5: The person who owns the policy and has the right to name the beneficiary, assign, and
surrender the policy is the:
A. Policyowner [CORRECT]
B. Beneficiary
C. Insured
D. Assignee
Correct Answer: A
Rationale: A is correct: the policyowner holds ownership rights. B, C, and D are other roles.
Q6: Which policy provision states that the application is attached to and made part of the policy?
A. Grace period clause
B. Entire contract clause [CORRECT]
C. Misstatement of age clause
D. Assignment clause
Correct Answer: B
Rationale: A is correct: the entire contract clause includes the application. B, C, and D are other provisions.
CA Life, Accident & Health Insurance Final Exam (2026/2027) Page 2
, Q7: The clause that adjusts the benefit (but does not void the policy) when the insured's age is
misstated is the:
A. Incontestability clause
B. Suicide clause
C. Misstatement of age clause [CORRECT]
D. Reinstatement clause
Correct Answer: C
Rationale: A is correct: misstatement of age adjusts benefits. B, C, and D are other clauses.
Q8: The right of the policyowner to transfer ownership rights to another party is called:
A. Reinstatement
B. Nonforfeiture
C. Conversion
D. Assignment [CORRECT]
Correct Answer: D
Rationale: A is correct: assignment transfers rights. B, C, and D are other rights/provisions.
Q9: Nonforfeiture options allow a policyowner who lapses to:
A. Receive the policy's cash value (cash, reduced paid-up, or extended term) [CORRECT]
B. Lose all value
C. Double the premium
D. Cancel the beneficiary
Correct Answer: A
Rationale: A is correct: nonforfeiture provides the cash value options. B, C, and D are incorrect.
Q10: A policyowner who lets a policy lapse may have it restored through the:
A. Incontestability clause
B. Reinstatement provision [CORRECT]
C. Suicide clause
D. Entire contract clause
Correct Answer: B
Rationale: A is correct: reinstatement restores a lapsed policy. B, C, and D are other provisions.
Q11: The free-look period allows a policyowner to:
A. Name a new beneficiary
B. Take a policy loan
C. Review the policy and return it for a full premium refund within the stated period [CORRECT]
D. Extend the grace period
Correct Answer: C
Rationale: A is correct: the free-look period provides a refund if the policy is returned. B, C, and D are
incorrect.
Q12: A policy loan is:
A. A loan from a bank
B. A gift from the beneficiary
C. A tax credit
D. A loan from the insurer using the policy's cash value as collateral [CORRECT]
Correct Answer: D
Rationale: A is correct: a policy loan is secured by cash value. B, C, and D are incorrect.
CA Life, Accident & Health Insurance Final Exam (2026/2027) Page 3
FINAL EXAM
COMPREHENSIVE PRACTICE (2026/2027 Edition)
California Department of Insurance (CDI) Licensing Preparation
100 Questions with Correct Answers & Rationale
Format: 100 multiple-choice questions (single best answer, A–D).
Structure: Ten sections spanning life, health, disability, group, CA law, underwriting,
annuities, and taxation.
Cognitive ~30% recall • ~50% application • ~20% analysis.
levels:
Grading: One point per question; correct answer and rationale provided after each
item.
Content basis: California Department of Insurance requirements, California Insurance Code,
federal/state regulations, ACA/Medicare/Medi-Cal, and NAIC model
standards for the 2026/2027 period.
Special 5 CA-mandated benefits; 3 CDI consumer-complaint/producer/reporting
inclusions: items; 2 comprehensive case studies (estate planning with life insurance;
group plan + Medicare coordination).
Important This is an independent practice exam for educational study; it is not an official
note: CDI licensing exam.
, Section 1: Life Insurance Basics & Policy Provisions (15 questions)
Q1: The policy provision that prevents an insurer from contesting the validity of a policy after a
specified period (usually 2 years) is the:
A. Incontestability clause [CORRECT]
B. Grace period clause
C. Suicide clause
D. Reinstatement clause
Correct Answer: A
Rationale: A is correct: incontestability bars contest after the period. B, C, and D are other provisions.
Q2: The period after the premium due date during which the policy remains in force is the:
A. Contestability period
B. Grace period [CORRECT]
C. Elimination period
D. Free-look period
Correct Answer: B
Rationale: A is correct: the grace period allows late payment. B, C, and D are other periods.
Q3: The provision that returns premiums (or cash value) if the insured dies by suicide within the
policy's first two years is the:
A. Incontestability clause
B. Reinstatement clause
C. Suicide clause [CORRECT]
D. Assignment clause
Correct Answer: C
Rationale: A is correct: the suicide clause limits payment in the first two years. B, C, and D are other clauses.
Q4: The person named in the policy to receive the death benefit is the:
A. Contingent owner
B. Policyowner
C. Producer
D. Beneficiary [CORRECT]
Correct Answer: D
Rationale: A is correct: the beneficiary receives the benefit. B, C, and D are other roles.
Q5: The person who owns the policy and has the right to name the beneficiary, assign, and
surrender the policy is the:
A. Policyowner [CORRECT]
B. Beneficiary
C. Insured
D. Assignee
Correct Answer: A
Rationale: A is correct: the policyowner holds ownership rights. B, C, and D are other roles.
Q6: Which policy provision states that the application is attached to and made part of the policy?
A. Grace period clause
B. Entire contract clause [CORRECT]
C. Misstatement of age clause
D. Assignment clause
Correct Answer: B
Rationale: A is correct: the entire contract clause includes the application. B, C, and D are other provisions.
CA Life, Accident & Health Insurance Final Exam (2026/2027) Page 2
, Q7: The clause that adjusts the benefit (but does not void the policy) when the insured's age is
misstated is the:
A. Incontestability clause
B. Suicide clause
C. Misstatement of age clause [CORRECT]
D. Reinstatement clause
Correct Answer: C
Rationale: A is correct: misstatement of age adjusts benefits. B, C, and D are other clauses.
Q8: The right of the policyowner to transfer ownership rights to another party is called:
A. Reinstatement
B. Nonforfeiture
C. Conversion
D. Assignment [CORRECT]
Correct Answer: D
Rationale: A is correct: assignment transfers rights. B, C, and D are other rights/provisions.
Q9: Nonforfeiture options allow a policyowner who lapses to:
A. Receive the policy's cash value (cash, reduced paid-up, or extended term) [CORRECT]
B. Lose all value
C. Double the premium
D. Cancel the beneficiary
Correct Answer: A
Rationale: A is correct: nonforfeiture provides the cash value options. B, C, and D are incorrect.
Q10: A policyowner who lets a policy lapse may have it restored through the:
A. Incontestability clause
B. Reinstatement provision [CORRECT]
C. Suicide clause
D. Entire contract clause
Correct Answer: B
Rationale: A is correct: reinstatement restores a lapsed policy. B, C, and D are other provisions.
Q11: The free-look period allows a policyowner to:
A. Name a new beneficiary
B. Take a policy loan
C. Review the policy and return it for a full premium refund within the stated period [CORRECT]
D. Extend the grace period
Correct Answer: C
Rationale: A is correct: the free-look period provides a refund if the policy is returned. B, C, and D are
incorrect.
Q12: A policy loan is:
A. A loan from a bank
B. A gift from the beneficiary
C. A tax credit
D. A loan from the insurer using the policy's cash value as collateral [CORRECT]
Correct Answer: D
Rationale: A is correct: a policy loan is secured by cash value. B, C, and D are incorrect.
CA Life, Accident & Health Insurance Final Exam (2026/2027) Page 3
