CALIFORNIA PRE-NEED INSURANCE
EXAM QUESTIONS AND ANSWERS
WITH COMPLETE SOLUTIONS 100%
CORRECT!!!
1. Who would be in the least need of purchasing errors and omissions
insurance?
✔✔ Answer: c. Football player-star quarterback
✅ Explanation: Errors and omissions (E&O) insurance is primarily for
professionals who provide advice or services (like architects, insurance agents,
and beauticians). A football player does not need this kind of coverage for their
profession.
2. A term-to-65 life policy is paid up at 65
✔✔ Answer: b. False
✅ Explanation: A term-to-65 policy provides coverage until age 65, but it is not
considered "paid-up" in the sense of permanent insurance. Premiums are paid up
until age 65, but the policy ends at that point unless it’s converted.
3. All are methods for handling a risk except:
✔✔ Answer: d. Identify and increase the hazards
✅ Explanation: Risk management methods include: retaining, transferring,
avoiding, or reducing risks. Increasing hazards is not a risk management strategy;
it’s irresponsible and increases exposure.
4. Which of the following is not used to determine health insurance rates?
✔✔ Answer: d. Mortality
✅ Explanation: Health insurance rates are based on morbidity (likelihood of
illness), interest, and expenses. Mortality is used more in life insurance
underwriting.
,A person applying for insurance has a hazardous job and the insurer wants to
exclude anything that happens at work. The type of policy would be:
a. Limited
b. Hazardous
c. Non-occupational
d. Level term -ANSWER✔✔c. Non-occupational
6. Which is NOT part of a transitioning insurance?
a. Solicitation
b. Negotiation
c. Execution of a contract
d. Establishing a list of clients -ANSWER✔✔d. Establishing a list of clients
The best example of fiduciary responsibility is:
a. Submitting premiums to the insurance company
b. Serving the best interest of the client
c. Annually reviewing the clients insurance
d. Making sure a claim is handled promptly -ANSWER✔✔a. Submitting
premiums to the insurance company
What term describes the concept that the insurer and the insured share in:
a. Stop loss limit
b. Deductible
c. Coinsurance
d. Benefit restoration -ANSWER✔✔c. Coinsurance
,Mike die before his annuity had paid out an amount at least equal to the purchase
price of the annuity. Paul's beneficiary continues to receive what?
a. Straight life annuity
b. Joint and last survivor annuity
c. Refund life annuity
d. Cash refund annuity -ANSWER✔✔c. Refund life annuity
What does the insurance commissioner have the right to do if an agent lacks
authority from an insurer named on a binder for coverage?
a. Request his certificate of authority
b. Authorize agent with certificate of convenience
c. Suspend or revoke the license of the agent
d. Fine the insurance company -ANSWER✔✔c. Suspend or revoke the license of
the agent
An insured bought an annuity 10 years ago. He will retire in five years. To
determine the value of the annuity, the number of accumulation units is:
a. Variable annuity
b. Fixed premium annuity
c. Tax sheltered annuity
d. Single payment annuity -ANSWER✔✔a. Variable annuity
A person with an insurance agent/broker license is placing business with a
company with whom he has an appointment. He is acting as:
a. A broker
b. He may choose to act as either
, c. An agent
d. None of the above -ANSWER✔✔c. An agent
The person whose life is the object of a life insurance policy is
a. Applicant
b. Policy owner
c. Insured
d. Beneficiary -ANSWER✔✔c. Insured
The incontestability period in a funeral policy is:
a. 1 year from the date issue
b. 2 years from the date issue
c. 2 years from the date issue or from the date of reinstatement
d. 6 months from the date issue or from date of reinstatement -ANSWER✔✔c. 2
years from the date issue or from the date of reinstatement
A new person license will need to take continuing education courses. The
requirements are:
a. 25 hours during the first four 12 month intervals
b. 25 hours during the first two 12 month intervals
c. 25 during the first 48 hours
d. 30 hours during the first 24 month intervals -ANSWER✔✔a. 25 hours during
the first four 12 month intervals
What type of policy builds cash value?
a. Term insurance
EXAM QUESTIONS AND ANSWERS
WITH COMPLETE SOLUTIONS 100%
CORRECT!!!
1. Who would be in the least need of purchasing errors and omissions
insurance?
✔✔ Answer: c. Football player-star quarterback
✅ Explanation: Errors and omissions (E&O) insurance is primarily for
professionals who provide advice or services (like architects, insurance agents,
and beauticians). A football player does not need this kind of coverage for their
profession.
2. A term-to-65 life policy is paid up at 65
✔✔ Answer: b. False
✅ Explanation: A term-to-65 policy provides coverage until age 65, but it is not
considered "paid-up" in the sense of permanent insurance. Premiums are paid up
until age 65, but the policy ends at that point unless it’s converted.
3. All are methods for handling a risk except:
✔✔ Answer: d. Identify and increase the hazards
✅ Explanation: Risk management methods include: retaining, transferring,
avoiding, or reducing risks. Increasing hazards is not a risk management strategy;
it’s irresponsible and increases exposure.
4. Which of the following is not used to determine health insurance rates?
✔✔ Answer: d. Mortality
✅ Explanation: Health insurance rates are based on morbidity (likelihood of
illness), interest, and expenses. Mortality is used more in life insurance
underwriting.
,A person applying for insurance has a hazardous job and the insurer wants to
exclude anything that happens at work. The type of policy would be:
a. Limited
b. Hazardous
c. Non-occupational
d. Level term -ANSWER✔✔c. Non-occupational
6. Which is NOT part of a transitioning insurance?
a. Solicitation
b. Negotiation
c. Execution of a contract
d. Establishing a list of clients -ANSWER✔✔d. Establishing a list of clients
The best example of fiduciary responsibility is:
a. Submitting premiums to the insurance company
b. Serving the best interest of the client
c. Annually reviewing the clients insurance
d. Making sure a claim is handled promptly -ANSWER✔✔a. Submitting
premiums to the insurance company
What term describes the concept that the insurer and the insured share in:
a. Stop loss limit
b. Deductible
c. Coinsurance
d. Benefit restoration -ANSWER✔✔c. Coinsurance
,Mike die before his annuity had paid out an amount at least equal to the purchase
price of the annuity. Paul's beneficiary continues to receive what?
a. Straight life annuity
b. Joint and last survivor annuity
c. Refund life annuity
d. Cash refund annuity -ANSWER✔✔c. Refund life annuity
What does the insurance commissioner have the right to do if an agent lacks
authority from an insurer named on a binder for coverage?
a. Request his certificate of authority
b. Authorize agent with certificate of convenience
c. Suspend or revoke the license of the agent
d. Fine the insurance company -ANSWER✔✔c. Suspend or revoke the license of
the agent
An insured bought an annuity 10 years ago. He will retire in five years. To
determine the value of the annuity, the number of accumulation units is:
a. Variable annuity
b. Fixed premium annuity
c. Tax sheltered annuity
d. Single payment annuity -ANSWER✔✔a. Variable annuity
A person with an insurance agent/broker license is placing business with a
company with whom he has an appointment. He is acting as:
a. A broker
b. He may choose to act as either
, c. An agent
d. None of the above -ANSWER✔✔c. An agent
The person whose life is the object of a life insurance policy is
a. Applicant
b. Policy owner
c. Insured
d. Beneficiary -ANSWER✔✔c. Insured
The incontestability period in a funeral policy is:
a. 1 year from the date issue
b. 2 years from the date issue
c. 2 years from the date issue or from the date of reinstatement
d. 6 months from the date issue or from date of reinstatement -ANSWER✔✔c. 2
years from the date issue or from the date of reinstatement
A new person license will need to take continuing education courses. The
requirements are:
a. 25 hours during the first four 12 month intervals
b. 25 hours during the first two 12 month intervals
c. 25 during the first 48 hours
d. 30 hours during the first 24 month intervals -ANSWER✔✔a. 25 hours during
the first four 12 month intervals
What type of policy builds cash value?
a. Term insurance
