FINAL EXAM - CALIFORNIA LIFE AND
HEALTH WITH CORRECT QUESTIONS
AND ANSWERS 2025/2026
Employer-provided group term life insurance is exempt from income taxation up to - CORRECT
ANSWERS -$50,000
Medicare Part B has an initial enrollment period. How many months after an individual's 65th birthday
month does this enrollment period end? - CORRECT ANSWERS -3 months
Which statement is true regarding policy dividends? - CORRECT ANSWERS -A dividend option is selected
by the insured at the time of policy purchase
What does the insurance term "indemnity" refer to? - CORRECT ANSWERS -Make whole
What is a common reason people purchase an annuity? - CORRECT ANSWERS -To protect against the risk
of outliving their financial resources
The importance of a representation is demonstrated in what rule? - CORRECT ANSWERS -Materiality of
concealment
Who does a life settlement broker represent? - CORRECT ANSWERS -Individual wanting to sell their life
policy to a third party
Who is financially liable for the payment of covered claims in a fully insured group health plan? -
CORRECT ANSWERS -Insurer
The Human Life Value concept is based on - CORRECT ANSWERS -income
,Business Overhead Expense Insurance pays for - CORRECT ANSWERS -business expenses when a
business owner becomes disabled
At what point does a self-insured group qualify for stop-loss coverage? - CORRECT ANSWERS -When
claims exceed a specified limit in a set period of time
What percentage of eligible employees must participate in a noncontributory group health plan before it
can be put in effect? - CORRECT ANSWERS -100%
A life insurance policy where the insured can choose where the cash value can be invested is called -
CORRECT ANSWERS -variable life
Which of these statements correctly describes risk? - CORRECT ANSWERS -Pure and speculative risks are
both insurable
The elimination period in a disability income policy serves the same purpose as a(n) ______ in a medical
expense policy. - CORRECT ANSWERS -deductible
What is required after a life agent sells an insurance policy to an applicant without being appointed by
the insurer? - CORRECT ANSWERS -Notice of appointment must be submitted to the Commissioner
Retirement plans are prevented from favoring highly compensated employees under which government
regulation? - CORRECT ANSWERS -Nondiscrimination
ESOPs are typically invested in - CORRECT ANSWERS -employer stock
The reason for social insurance is to - CORRECT ANSWERS -protect certain vulnerable segments of the
population
, Cindy buys a 10-year certain annuity with an installment refund. After receiving monthly payments for 5
years, Cindy dies. How many remaining payments will the insurer make to her beneficiary? - CORRECT
ANSWERS -60 payments
he free-look period for life insurance policyowners age 60 or older is - CORRECT ANSWERS -30 days
What is considered to be the definition of disability, according to Social Security? - CORRECT ANSWERS -
Unable to engage in any substantial gainful activity
"Life insurance creates an immediate estate". This phrase means: - CORRECT ANSWERS -when the
insured dies, a death benefit is paid
How are death benefits that are received by a beneficiary normally treated for tax purposes? - CORRECT
ANSWERS -Exempt from federal income taxes
Exempt from federal income taxes - CORRECT ANSWERS -Payment for services goes directly to the
provider
When an insurance company requests an attending physician's report, the request must be
accompanied by a - CORRECT ANSWERS -copy of the signed authorization
Which policy provision protects the policyowner from unintentional lapse of the contract? - CORRECT
ANSWERS -Grace period
What kind of annuity pays income to two annuitants until their deaths? - CORRECT ANSWERS -Joint and
survivor annuity
HEALTH WITH CORRECT QUESTIONS
AND ANSWERS 2025/2026
Employer-provided group term life insurance is exempt from income taxation up to - CORRECT
ANSWERS -$50,000
Medicare Part B has an initial enrollment period. How many months after an individual's 65th birthday
month does this enrollment period end? - CORRECT ANSWERS -3 months
Which statement is true regarding policy dividends? - CORRECT ANSWERS -A dividend option is selected
by the insured at the time of policy purchase
What does the insurance term "indemnity" refer to? - CORRECT ANSWERS -Make whole
What is a common reason people purchase an annuity? - CORRECT ANSWERS -To protect against the risk
of outliving their financial resources
The importance of a representation is demonstrated in what rule? - CORRECT ANSWERS -Materiality of
concealment
Who does a life settlement broker represent? - CORRECT ANSWERS -Individual wanting to sell their life
policy to a third party
Who is financially liable for the payment of covered claims in a fully insured group health plan? -
CORRECT ANSWERS -Insurer
The Human Life Value concept is based on - CORRECT ANSWERS -income
,Business Overhead Expense Insurance pays for - CORRECT ANSWERS -business expenses when a
business owner becomes disabled
At what point does a self-insured group qualify for stop-loss coverage? - CORRECT ANSWERS -When
claims exceed a specified limit in a set period of time
What percentage of eligible employees must participate in a noncontributory group health plan before it
can be put in effect? - CORRECT ANSWERS -100%
A life insurance policy where the insured can choose where the cash value can be invested is called -
CORRECT ANSWERS -variable life
Which of these statements correctly describes risk? - CORRECT ANSWERS -Pure and speculative risks are
both insurable
The elimination period in a disability income policy serves the same purpose as a(n) ______ in a medical
expense policy. - CORRECT ANSWERS -deductible
What is required after a life agent sells an insurance policy to an applicant without being appointed by
the insurer? - CORRECT ANSWERS -Notice of appointment must be submitted to the Commissioner
Retirement plans are prevented from favoring highly compensated employees under which government
regulation? - CORRECT ANSWERS -Nondiscrimination
ESOPs are typically invested in - CORRECT ANSWERS -employer stock
The reason for social insurance is to - CORRECT ANSWERS -protect certain vulnerable segments of the
population
, Cindy buys a 10-year certain annuity with an installment refund. After receiving monthly payments for 5
years, Cindy dies. How many remaining payments will the insurer make to her beneficiary? - CORRECT
ANSWERS -60 payments
he free-look period for life insurance policyowners age 60 or older is - CORRECT ANSWERS -30 days
What is considered to be the definition of disability, according to Social Security? - CORRECT ANSWERS -
Unable to engage in any substantial gainful activity
"Life insurance creates an immediate estate". This phrase means: - CORRECT ANSWERS -when the
insured dies, a death benefit is paid
How are death benefits that are received by a beneficiary normally treated for tax purposes? - CORRECT
ANSWERS -Exempt from federal income taxes
Exempt from federal income taxes - CORRECT ANSWERS -Payment for services goes directly to the
provider
When an insurance company requests an attending physician's report, the request must be
accompanied by a - CORRECT ANSWERS -copy of the signed authorization
Which policy provision protects the policyowner from unintentional lapse of the contract? - CORRECT
ANSWERS -Grace period
What kind of annuity pays income to two annuitants until their deaths? - CORRECT ANSWERS -Joint and
survivor annuity
