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California Life and Health Pre-licensing
Questions with Detailed Verified
Answers
Question: 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
Ans: 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.
Question: 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
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C. Treaty insurance
D. Captive insurance
Ans: A. Reinsurance
= an arrangement by which an insurance company transfers a portion of a risk
it has assumed to another insurer.
Question: 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
Ans: D. Reinsurance
Question: Which of the following is an insurer established by a parent
company for the purpose of insuring the parent company's loss exposures?
A. Mutual insurer
B. Fraternal insurer
C. Participating insurer
D. Captive insurer
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Ans: D. Captive insurer
=An insurer established and owned by a parent firm for the purpose of insuring
the parent firm's loss exposures is known as a captive insurer.
Question: Which of the following is NOT a characteristic of reinsurance?
A. Protects against a very large claim
B. Increases the unearned premium reserve
C. A specialized branch of the insurance industry
D. Enables insurer to meet certain objectives
Ans: B. Increases the unearned premium reserve
Question: A participating company is also referred to as which type of
insurer?
A. Mutual insurer
B. Domestic insurer
C. Re-insurer
D. Reciprocal insurer
California Life and Health Pre-licensing
Questions with Detailed Verified
Answers
Question: 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
Ans: 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.
Question: 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
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C. Treaty insurance
D. Captive insurance
Ans: A. Reinsurance
= an arrangement by which an insurance company transfers a portion of a risk
it has assumed to another insurer.
Question: 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
Ans: D. Reinsurance
Question: Which of the following is an insurer established by a parent
company for the purpose of insuring the parent company's loss exposures?
A. Mutual insurer
B. Fraternal insurer
C. Participating insurer
D. Captive insurer
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Ans: D. Captive insurer
=An insurer established and owned by a parent firm for the purpose of insuring
the parent firm's loss exposures is known as a captive insurer.
Question: Which of the following is NOT a characteristic of reinsurance?
A. Protects against a very large claim
B. Increases the unearned premium reserve
C. A specialized branch of the insurance industry
D. Enables insurer to meet certain objectives
Ans: B. Increases the unearned premium reserve
Question: A participating company is also referred to as which type of
insurer?
A. Mutual insurer
B. Domestic insurer
C. Re-insurer
D. Reciprocal insurer
