CA Life Insurance Exam Questions with
100% Correct Answers | Latest Update
What type of risk is insurable? - ✔✔Pure Risk
According to the Law of Agency, a principal is represented by whom? -
✔✔Agent or Producer
What type of insurer is a voluntarily formed organization that provides
insurance benefits for members of an affiliated lodge or religious organization
with a representative form of government? - ✔✔Fraternal Insurer
When a change needs to be made on the application for insurance, which is the
best method for correcting the information? - ✔✔Complete a new application
or ask the applicant to initial the correction on the original application.
A person who does not lock the doors to his or her house shows an indifferent
attitude. This person presents what type of hazard? - ✔✔Morale Hazard
An insurance policy paid a nontaxable dividend to the insured one year, and
nothing the next. From what type of insurer did the insured purchase the
policy? - ✔✔A mutual insurer
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©KERRYMARTIN 2025/2026. YEAR PUBLISHED 2025.
,What are the strategies used by underwriters to prevent adverse selection? -
✔✔Restriction of coverage, refusal to accept a high risk, and accepting a risk at
a higher rate.
What entities make up the Medical Information Bureau? - ✔✔Insurers
What is the name of the process that insurance companies use to determine
whether or not an applicant is insurable? - ✔✔Underwriting
What law is the foundation of the statistical prediction of loss upon which rates
for insurance are calculated? - ✔✔Law of Large Numbers
When agents act within the scope of their contract, their actions will be
assumed to be the acts of whom? - ✔✔The insurer
Whose responsibility is it to determine that all of the questions on an insurance
application are answered? - ✔✔The agent's
What document is required for an insurance company to transact insurance? -
✔✔Certificate of Authority
What is the best way to handle incomplete insurance applications? - ✔✔Return
the application to the applicant for completion.
What is the term for the causes of loss insured against in an insurance policy? -
✔✔Peril
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©KERRYMARTIN 2025/2026. YEAR PUBLISHED 2025.
, In forming an insurance contract, when does an acceptance usually occur? -
✔✔When the insurer approves a prepaid application.
In insurance, when is the offer usually made on a contract? - ✔✔When the
insurance application is submitted.
What law protects consumers from the circulation of inaccurate or obsolete
information? - ✔✔The Fair Credit Reporting Act
What are the three types of agent authority? - ✔✔Express, Implied, and
Apparent
When does an insurance policy go into effect? - ✔✔When the policy is delivered
and the premium is paid.
The reduction, decrease, or disappearance of value of the person or property
insured in a policy is known as what? - ✔✔Loss
An applicant conceals relevant health information on the application. The
applicant presents what type of hazard? - ✔✔Moral Hazard
In order to transact insurance within a given state, an alien insurer must first
obtain what? - ✔✔Certificate of Authority
What do individuals use to transfer risk of loss to larger group? - ✔✔Insurance
Insurance is a contract that protects the insured from what? - ✔✔Loss
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©KERRYMARTIN 2025/2026. YEAR PUBLISHED 2025.
100% Correct Answers | Latest Update
What type of risk is insurable? - ✔✔Pure Risk
According to the Law of Agency, a principal is represented by whom? -
✔✔Agent or Producer
What type of insurer is a voluntarily formed organization that provides
insurance benefits for members of an affiliated lodge or religious organization
with a representative form of government? - ✔✔Fraternal Insurer
When a change needs to be made on the application for insurance, which is the
best method for correcting the information? - ✔✔Complete a new application
or ask the applicant to initial the correction on the original application.
A person who does not lock the doors to his or her house shows an indifferent
attitude. This person presents what type of hazard? - ✔✔Morale Hazard
An insurance policy paid a nontaxable dividend to the insured one year, and
nothing the next. From what type of insurer did the insured purchase the
policy? - ✔✔A mutual insurer
1|Page
©KERRYMARTIN 2025/2026. YEAR PUBLISHED 2025.
,What are the strategies used by underwriters to prevent adverse selection? -
✔✔Restriction of coverage, refusal to accept a high risk, and accepting a risk at
a higher rate.
What entities make up the Medical Information Bureau? - ✔✔Insurers
What is the name of the process that insurance companies use to determine
whether or not an applicant is insurable? - ✔✔Underwriting
What law is the foundation of the statistical prediction of loss upon which rates
for insurance are calculated? - ✔✔Law of Large Numbers
When agents act within the scope of their contract, their actions will be
assumed to be the acts of whom? - ✔✔The insurer
Whose responsibility is it to determine that all of the questions on an insurance
application are answered? - ✔✔The agent's
What document is required for an insurance company to transact insurance? -
✔✔Certificate of Authority
What is the best way to handle incomplete insurance applications? - ✔✔Return
the application to the applicant for completion.
What is the term for the causes of loss insured against in an insurance policy? -
✔✔Peril
2|Page
©KERRYMARTIN 2025/2026. YEAR PUBLISHED 2025.
, In forming an insurance contract, when does an acceptance usually occur? -
✔✔When the insurer approves a prepaid application.
In insurance, when is the offer usually made on a contract? - ✔✔When the
insurance application is submitted.
What law protects consumers from the circulation of inaccurate or obsolete
information? - ✔✔The Fair Credit Reporting Act
What are the three types of agent authority? - ✔✔Express, Implied, and
Apparent
When does an insurance policy go into effect? - ✔✔When the policy is delivered
and the premium is paid.
The reduction, decrease, or disappearance of value of the person or property
insured in a policy is known as what? - ✔✔Loss
An applicant conceals relevant health information on the application. The
applicant presents what type of hazard? - ✔✔Moral Hazard
In order to transact insurance within a given state, an alien insurer must first
obtain what? - ✔✔Certificate of Authority
What do individuals use to transfer risk of loss to larger group? - ✔✔Insurance
Insurance is a contract that protects the insured from what? - ✔✔Loss
3|Page
©KERRYMARTIN 2025/2026. YEAR PUBLISHED 2025.
