CA LIFE AND HEALTH INSURANCE EXAM 2 LATEST
VERSIONS (VERSION A AND B) ACTUAL EXAM 250
QUESTIONS AND CORRECT DETAILED ANSWERS WITH
RATIONALES (VERIFIED ANSWERS) |ALREADY GRADED
A
Alien insurer - ANSWER: principal office outside the country
Admitted - ANSWER: insurer authorized from a state's department of insurance, can
conduct business in that state
Insurance broker - ANSWER: represent BUYER, person compensated for transacting
insurance on behalf of another person with an insurer
Foreign insurer - ANSWER: different state
Adverse selection - ANSWER: buyers and sellers have two different sets of
information available, cost below true risk
Insurable interest - ANSWER: when destruction or loss could result in hardship for
another entity or person, for self unlimited (suicide 2 yr gap of insurance)
Pure risk - ANSWER: risk that is insurable with no possibility of gain ex: injury, illness
Speculative risk - ANSWER: chance of loss or gain ex: stocks, lottery
Indemnity - ANSWER: "restore loss"
Occurrence - ANSWER: event that causes a loss, every accident is an occurrence
Moral vs. Morale hazards - ANSWER: moral = dishonesty
morale = carelessness
For contract to be legally binding? - ANSWER: competent parties
legal purpose
offer and acceptance
consideration (app)
Life insurance policy contracts creates? - ANSWER: an immediate estate
Temporary life insurance (term) - ANSWER: max amount of life insurance at lowest
initial outlay of funds, can be level term increasing (income) decreasing (mortgage
redemption) etc.
VERSIONS (VERSION A AND B) ACTUAL EXAM 250
QUESTIONS AND CORRECT DETAILED ANSWERS WITH
RATIONALES (VERIFIED ANSWERS) |ALREADY GRADED
A
Alien insurer - ANSWER: principal office outside the country
Admitted - ANSWER: insurer authorized from a state's department of insurance, can
conduct business in that state
Insurance broker - ANSWER: represent BUYER, person compensated for transacting
insurance on behalf of another person with an insurer
Foreign insurer - ANSWER: different state
Adverse selection - ANSWER: buyers and sellers have two different sets of
information available, cost below true risk
Insurable interest - ANSWER: when destruction or loss could result in hardship for
another entity or person, for self unlimited (suicide 2 yr gap of insurance)
Pure risk - ANSWER: risk that is insurable with no possibility of gain ex: injury, illness
Speculative risk - ANSWER: chance of loss or gain ex: stocks, lottery
Indemnity - ANSWER: "restore loss"
Occurrence - ANSWER: event that causes a loss, every accident is an occurrence
Moral vs. Morale hazards - ANSWER: moral = dishonesty
morale = carelessness
For contract to be legally binding? - ANSWER: competent parties
legal purpose
offer and acceptance
consideration (app)
Life insurance policy contracts creates? - ANSWER: an immediate estate
Temporary life insurance (term) - ANSWER: max amount of life insurance at lowest
initial outlay of funds, can be level term increasing (income) decreasing (mortgage
redemption) etc.
