California Life and Health Pre-licensing A+ Exams Questions & Answers

What is a participating life insurance policy? A. Contract that allows the policyowner to receive a share of surplus in the form of policy dividends B. Contract that gives beneficiaries the right to participate in any dividends C. Agreement that insures two or more lives D. Agreement that allows two or more beneficiaries to share in the death benefit - ANSWER-A. Contract that allows the policyowner to receive a share of surplus in the form of policy dividends A participating life insurance policy is defined as a contract that allows the policyowner to receive a share of surplus in the form of policy dividends. Which of the following is a type of insurance where an insurer transfers loss exposures from policies written for its insureds? A. Reinsurance B. Mutual insurance C. Treaty insurance D. Captive insurance - ANSWER-A. Reinsurance = an arrangement by which an insurance company transfers a portion of a risk it has assumed to another insurer. An insurer enters into a contract with a third party to insure itself against losses from insurance policies it issues. What is this agreement called? A. Reserves B. Mutual C. Mutli-line D. Reinsurance - ANSWER-D. Reinsurance