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Final Exam - California Life Only
Questions and Correct Answers/ Latest
Update / Already Graded
According to the California Insurance Code, what is "insurance"?
Ans: A contract
Which of these statements correctly describes risk?
Ans: Pure risk is the only insurable risk
Only pure risks are insurable
Which of the following does NOT have to be included on life
insurance policy illustrations?
Ans: Statement that all values and benefits are guaranteed
An agent's attempt to stop the replacement of an existing life
insurance policy is known as
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Ans: conservation
If a material warranty violation on the part of the insured is found,
what recourse does an insurer have?
Ans: Rescind the policy
Which of the following pieces of information is NOT gathered during
the personal financial planning process?
Ans: An individual's civic organization memberships
Which of the following does the California Insurance Code NOT
require an insurance policy to specify?
Ans: Insurer's financial rating
What is an "insurance broker" according to California Insurance
Code?
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Ans: A person compensated for transacting insurance on behalf of
another person with an insurer
The objective of underwriting is to
Ans: avoid selecting a disproportionate number of bad risks
An annuitant would like to determine the amount of an annuity
distribution that is exempt from taxation. What is used to calculate
this?
Ans: Exclusion ratio
A worker is entitled to Social Security disability benefits if all of the
following are true, EXCEPT for:
Ans: worker cannot perform his or her current job, but is actively seeking
other employment
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How are death benefits that are received by a beneficiary normally
treated for tax purposes?
Ans: Exempt from federal income taxes
Which of the following statements correctly describes a contract of
indemnity?
Ans: One party is restored to the same financial position the party was in
before the loss occurred
How is a life insurance policy dividend legally defined?
Ans: A return of excess premium and not taxable
When handling premiums for an insured, an agent is acting in which
capacity?
Ans: Fiduciary
Final Exam - California Life Only
Questions and Correct Answers/ Latest
Update / Already Graded
According to the California Insurance Code, what is "insurance"?
Ans: A contract
Which of these statements correctly describes risk?
Ans: Pure risk is the only insurable risk
Only pure risks are insurable
Which of the following does NOT have to be included on life
insurance policy illustrations?
Ans: Statement that all values and benefits are guaranteed
An agent's attempt to stop the replacement of an existing life
insurance policy is known as
,2 | Page
Ans: conservation
If a material warranty violation on the part of the insured is found,
what recourse does an insurer have?
Ans: Rescind the policy
Which of the following pieces of information is NOT gathered during
the personal financial planning process?
Ans: An individual's civic organization memberships
Which of the following does the California Insurance Code NOT
require an insurance policy to specify?
Ans: Insurer's financial rating
What is an "insurance broker" according to California Insurance
Code?
,3 | Page
Ans: A person compensated for transacting insurance on behalf of
another person with an insurer
The objective of underwriting is to
Ans: avoid selecting a disproportionate number of bad risks
An annuitant would like to determine the amount of an annuity
distribution that is exempt from taxation. What is used to calculate
this?
Ans: Exclusion ratio
A worker is entitled to Social Security disability benefits if all of the
following are true, EXCEPT for:
Ans: worker cannot perform his or her current job, but is actively seeking
other employment
, 4 | Page
How are death benefits that are received by a beneficiary normally
treated for tax purposes?
Ans: Exempt from federal income taxes
Which of the following statements correctly describes a contract of
indemnity?
Ans: One party is restored to the same financial position the party was in
before the loss occurred
How is a life insurance policy dividend legally defined?
Ans: A return of excess premium and not taxable
When handling premiums for an insured, an agent is acting in which
capacity?
Ans: Fiduciary
