CA Life Insurance Exam 2026 Questions
and Answers
What is meant by referring to an insurance policy as a unilateral contract? - Correct
Answer -Only one party makes a legally enforceable promise.
When must insurance records of insurance agents and brokers be made available to
the Insurance Commissioner? - Correct Answer -At all times.
Any situation that presents the possibility of a loss is known as - Correct Answer -a
loss exposure
Which of the following information is not required to be communicated in a Life
insurance contract? - Correct Answer -Personal judgment.
The direct distribution of insurance utilizes all of the following to promote the sale
of insurance EXCEPT - Correct Answer -telephone call from an agent.
A contract in which one party promises to indemnify another against loss that
arises from an unknown event is - Correct Answer -an insurance policy.
©COPYRIGHT 2025 ALL RIGHTS RESERVED 1
,All of the occurrences listed below are examples of an insurable event as defined
by the California Insurance Code EXCEPT - Correct Answer -an insured suffers a
financial loss in the state lottery
All of the following statements about aleatory contracts are true EXCEPT - Correct
Answer -the insured and insurer contribute equally to the contract.
All of the following would be considered unfair trade practices EXCEPT - Correct
Answer -committing any act of discrimination whether it be deemed fair or unfair.
As authorized by the California Insurance Code, the Insurance Commissioner has
provided standards for names used by life insurance agents. Under these standards
which, if any, of the following are automatically acceptable for Mary Brown, a
holder of the CLU designation? - Correct Answer -Mary Brown Insurance
Services.
A contract of indemnity is one in which - Correct Answer -one party is restored to
the same financial position the party was in before the loss occurred.
In insurance terminology, "indemnity" means - Correct Answer -make whole.
As defined in the California insurance Code, "insurance" is a - Correct Answer -
contract.
©COPYRIGHT 2025 ALL RIGHTS RESERVED 2
, What would a person be guilty of who refuses to deliver any books, records, or
assets to the commissioner once a seizure order has been executed? - Correct
Answer -A misdemeanor
An agent who is acting as an insurance agent, broker, solicitor, life agent, accident
and health, or bail agent acts in which capacity when handling premiums or return
premiums for an insured? - Correct Answer -Fiduciary
Which of the following statements regarding risk is TRUE? - Correct Answer -
Only pure risks are insurable.
The purchase of an insurance policy may accomplish all of the following for the
insured EXCEPT - Correct Answer -the elimination of risk.
Insureds are entitled to recover an amount NOT greater than the amount of their
loss under the principle of - Correct Answer -indemnity.
What rule is used to determine the importance of a representation? - Correct
Answer -The materiality of concealment.
The required contents of a policy include all of the following EXCEPT - Correct
Answer -the probability of loss
All of the following are characteristics of reinsurance EXCEPT it - Correct Answer
-increases the unearned premium reserve.
©COPYRIGHT 2025 ALL RIGHTS RESERVED 3
and Answers
What is meant by referring to an insurance policy as a unilateral contract? - Correct
Answer -Only one party makes a legally enforceable promise.
When must insurance records of insurance agents and brokers be made available to
the Insurance Commissioner? - Correct Answer -At all times.
Any situation that presents the possibility of a loss is known as - Correct Answer -a
loss exposure
Which of the following information is not required to be communicated in a Life
insurance contract? - Correct Answer -Personal judgment.
The direct distribution of insurance utilizes all of the following to promote the sale
of insurance EXCEPT - Correct Answer -telephone call from an agent.
A contract in which one party promises to indemnify another against loss that
arises from an unknown event is - Correct Answer -an insurance policy.
©COPYRIGHT 2025 ALL RIGHTS RESERVED 1
,All of the occurrences listed below are examples of an insurable event as defined
by the California Insurance Code EXCEPT - Correct Answer -an insured suffers a
financial loss in the state lottery
All of the following statements about aleatory contracts are true EXCEPT - Correct
Answer -the insured and insurer contribute equally to the contract.
All of the following would be considered unfair trade practices EXCEPT - Correct
Answer -committing any act of discrimination whether it be deemed fair or unfair.
As authorized by the California Insurance Code, the Insurance Commissioner has
provided standards for names used by life insurance agents. Under these standards
which, if any, of the following are automatically acceptable for Mary Brown, a
holder of the CLU designation? - Correct Answer -Mary Brown Insurance
Services.
A contract of indemnity is one in which - Correct Answer -one party is restored to
the same financial position the party was in before the loss occurred.
In insurance terminology, "indemnity" means - Correct Answer -make whole.
As defined in the California insurance Code, "insurance" is a - Correct Answer -
contract.
©COPYRIGHT 2025 ALL RIGHTS RESERVED 2
, What would a person be guilty of who refuses to deliver any books, records, or
assets to the commissioner once a seizure order has been executed? - Correct
Answer -A misdemeanor
An agent who is acting as an insurance agent, broker, solicitor, life agent, accident
and health, or bail agent acts in which capacity when handling premiums or return
premiums for an insured? - Correct Answer -Fiduciary
Which of the following statements regarding risk is TRUE? - Correct Answer -
Only pure risks are insurable.
The purchase of an insurance policy may accomplish all of the following for the
insured EXCEPT - Correct Answer -the elimination of risk.
Insureds are entitled to recover an amount NOT greater than the amount of their
loss under the principle of - Correct Answer -indemnity.
What rule is used to determine the importance of a representation? - Correct
Answer -The materiality of concealment.
The required contents of a policy include all of the following EXCEPT - Correct
Answer -the probability of loss
All of the following are characteristics of reinsurance EXCEPT it - Correct Answer
-increases the unearned premium reserve.
©COPYRIGHT 2025 ALL RIGHTS RESERVED 3
