CALIFORNIA LIFE ACCIDENT AND HEALTH INSURANCE
STATE EXAM QUESTIONS AND ANSWERS (2025/2026)
Which of the following statements correctly describes a contract of indemnity ? - ANSWER-One party
is restored to the same financial position the part was in before the loss occurred
Under a noncancellable health insurance policy, an insurer can - ANSWER-Cancel the policy for
nonpayment of premium
What does ESOP stand for? - ANSWER-Employee Stock Ownership Plan
What does the term "illustration" mean when used in the phrase "life insurance policy illustration" ,
according to the California Insurance Code - ANSWER-Presentation of policy features that includes
non-guaranteed elements
Life insurance creates an immediate estate. This phrase means - ANSWER-when the insured dies, a
death benefit is paid; Life insurance creates an immediate estate by paying a death benefit whenever
the insured dies.
When handling premiums for an insured, an agent is acting in which capacity? - ANSWER-Fiduciary
An agent acting as an insurance agent, broker, solicitor, life agent, or bail agent acts in fiduciary
capacity when handling premiums or return premiums
Health insurance policies typically contain a provision stating that insureds and their insurer will share
covered losses in an agreed proportion. Which provision does this refer to? - ANSWER-Coinsurance is
a sharing of expenses by the insured and the insurer. Once the insured satisfies the deductible, the
insurance company pays a high percentage of the additional expenses (usually 75% or 80%) and the
insured pays the remainder.
Kimberly is an employee on leave under the Family and Medical Leave Act (FMLA). What will happen
to her group health coverage? - ANSWER-She continues to be enrolled during the leave; FMLA
requires the same group health insurance benefits that would exist if the employee were not on leave.
Which of the following is NOT true regarding a family policy that covers children? - ANSWER-
Conversion of child's coverage to permanent insurance requires evidence of insurability
Which of the following describes a contributory group insurance plan? - ANSWER-Part of the premium
is paid by the employee
What is a common reason people purchase an annuity? - ANSWER-To protect against the risk of
outliving their financial resources
of the After the annual deductible is met, Medicare Part B will pay remaining approved charges. -
ANSWER-80%
A contract requires - ANSWER-an offer and acceptance of the contract terms
When selling a long term care insurance rider to an applicant, a life agent must take into
consideration all of these factors. EXCEPT - ANSWER-Attending physician's statement
, correct answer- ability to pay, needs of the client, goals of the client
What is the proper order of initial life insurance premiums, from lowest to highest ? - ANSWER-
Modified premium, ordinary life, single premium
What does the insurance term "indemnity " refer to? - ANSWER-"Make whole"
Contracts of indemnity attempt to return the
insured to their original financial position, or "made whole".
The probability of death, listed by year, is demonstrated in - ANSWER-"Mortality tables".
Mortality tables give a measure of the number of deaths in a given population over a certain period of
time.
Which type of health insurance policy cannot be canceled by the insurer nor increase the premiums? -
ANSWER-Noncancellable
A noncancellable policy cannot be cancelled nor can its premium rates be increased under any
circumstances.
What must an applicant do in order to authorize the release of an attending physician report? -
ANSWER-sign a consent form
An employee for XYZ Corp is injured on the job. Where does coverage for the employee's injuries
come from? - ANSWER-Workers' Compensation; In this situation, coverage for the employee's injuries
comes from XYZ's Workers' Compensation.
Which of the following could lower the premium of a proposed disability income policy ? - ANSWER-
Increase in the elimination period
Employer contributions to qualified plans are - ANSWER-Tax deductible by the employer
Periodic increases in policy benefits are allowed in which long-term care policy provision? - ANSWER-
Inflation protection; An inflation protection provision allows for a periodic increase in policy benefits
due to inflation.
Which of the following is NOT included in comprehensive major medical plans? - ANSWER-First-dollar
coverage
An insurer can be protected from adverse selection with which policy provision? - ANSWER-"Suicide
clause".
The suicide clause protects the insurer against possible
adverse selection.
Which of these statements is NOT true concerning recurrent disabilities? - ANSWER-The insurer
continues coverage after a new elimination period
Minimum participation standards exist for group health insurance plans in order to - ANSWER-prevent
adverse selection
Which of the following is NOT a common life insurance policy rider? - ANSWER-Extended term
Which entity has jurisdiction over health care coverage providers? - ANSWER-Department of
Insurance
STATE EXAM QUESTIONS AND ANSWERS (2025/2026)
Which of the following statements correctly describes a contract of indemnity ? - ANSWER-One party
is restored to the same financial position the part was in before the loss occurred
Under a noncancellable health insurance policy, an insurer can - ANSWER-Cancel the policy for
nonpayment of premium
What does ESOP stand for? - ANSWER-Employee Stock Ownership Plan
What does the term "illustration" mean when used in the phrase "life insurance policy illustration" ,
according to the California Insurance Code - ANSWER-Presentation of policy features that includes
non-guaranteed elements
Life insurance creates an immediate estate. This phrase means - ANSWER-when the insured dies, a
death benefit is paid; Life insurance creates an immediate estate by paying a death benefit whenever
the insured dies.
When handling premiums for an insured, an agent is acting in which capacity? - ANSWER-Fiduciary
An agent acting as an insurance agent, broker, solicitor, life agent, or bail agent acts in fiduciary
capacity when handling premiums or return premiums
Health insurance policies typically contain a provision stating that insureds and their insurer will share
covered losses in an agreed proportion. Which provision does this refer to? - ANSWER-Coinsurance is
a sharing of expenses by the insured and the insurer. Once the insured satisfies the deductible, the
insurance company pays a high percentage of the additional expenses (usually 75% or 80%) and the
insured pays the remainder.
Kimberly is an employee on leave under the Family and Medical Leave Act (FMLA). What will happen
to her group health coverage? - ANSWER-She continues to be enrolled during the leave; FMLA
requires the same group health insurance benefits that would exist if the employee were not on leave.
Which of the following is NOT true regarding a family policy that covers children? - ANSWER-
Conversion of child's coverage to permanent insurance requires evidence of insurability
Which of the following describes a contributory group insurance plan? - ANSWER-Part of the premium
is paid by the employee
What is a common reason people purchase an annuity? - ANSWER-To protect against the risk of
outliving their financial resources
of the After the annual deductible is met, Medicare Part B will pay remaining approved charges. -
ANSWER-80%
A contract requires - ANSWER-an offer and acceptance of the contract terms
When selling a long term care insurance rider to an applicant, a life agent must take into
consideration all of these factors. EXCEPT - ANSWER-Attending physician's statement
, correct answer- ability to pay, needs of the client, goals of the client
What is the proper order of initial life insurance premiums, from lowest to highest ? - ANSWER-
Modified premium, ordinary life, single premium
What does the insurance term "indemnity " refer to? - ANSWER-"Make whole"
Contracts of indemnity attempt to return the
insured to their original financial position, or "made whole".
The probability of death, listed by year, is demonstrated in - ANSWER-"Mortality tables".
Mortality tables give a measure of the number of deaths in a given population over a certain period of
time.
Which type of health insurance policy cannot be canceled by the insurer nor increase the premiums? -
ANSWER-Noncancellable
A noncancellable policy cannot be cancelled nor can its premium rates be increased under any
circumstances.
What must an applicant do in order to authorize the release of an attending physician report? -
ANSWER-sign a consent form
An employee for XYZ Corp is injured on the job. Where does coverage for the employee's injuries
come from? - ANSWER-Workers' Compensation; In this situation, coverage for the employee's injuries
comes from XYZ's Workers' Compensation.
Which of the following could lower the premium of a proposed disability income policy ? - ANSWER-
Increase in the elimination period
Employer contributions to qualified plans are - ANSWER-Tax deductible by the employer
Periodic increases in policy benefits are allowed in which long-term care policy provision? - ANSWER-
Inflation protection; An inflation protection provision allows for a periodic increase in policy benefits
due to inflation.
Which of the following is NOT included in comprehensive major medical plans? - ANSWER-First-dollar
coverage
An insurer can be protected from adverse selection with which policy provision? - ANSWER-"Suicide
clause".
The suicide clause protects the insurer against possible
adverse selection.
Which of these statements is NOT true concerning recurrent disabilities? - ANSWER-The insurer
continues coverage after a new elimination period
Minimum participation standards exist for group health insurance plans in order to - ANSWER-prevent
adverse selection
Which of the following is NOT a common life insurance policy rider? - ANSWER-Extended term
Which entity has jurisdiction over health care coverage providers? - ANSWER-Department of
Insurance
