ACTUAL FINAL EXAM CA CALIFORNIA LIFE INSURANCE (ELABORATED QUESIONS AND ANSWERS)

ACTUAL FINAL EXAM CA CALIFORNIA LIFE INSURANCE (ELABORATED QUESIONS AND ANSWERS) According to the California Insurance Code, what is "insurance"? - CORRECT ANSWER-A contract Which of these statements correctly describes risk? - CORRECT ANSWER-Pure risk is the only insurable risk Only pure risks are insurable Which of the following does NOT have to be included on life insurance policy illustrations? - CORRECT ANSWER-Statement that all values and benefits are guaranteed An agent's attempt to stop the replacement of an existing life insurance policy is known as - CORRECT ANSWER-conservation If a material warranty violation on the part of the insured is found, what recourse does an insurer have? - CORRECT ANSWER-Rescind the policy Which of the following pieces of information is NOT gathered during the personal financial planning process? - CORRECT ANSWER-An individual's civic organization memberships Which of the following does the California Insurance Code NOT require an insurance policy to specify? - CORRECT ANSWER-Insurer's financial rating What is an "insurance broker" according to California Insurance Code? - CORRECT ANSWER-A person compensated for transacting insurance on behalf of another person with an insurer The objective of underwriting is to - CORRECT ANSWER-avoid selecting a disproportionate number of bad risks An annuitant would like to determine the amount of an annuity distribution that is exempt from taxation. What is used to calculate this? - CORRECT ANSWER-Exclusion ratio A worker is entitled to Social Security disability benefits if all of the following are true, EXCEPT for: - CORRECT ANSWER-worker cannot perform his or her current job, but is actively seeking other employment How are death benefits that are received by a beneficiary normally treated for tax purposes? - CORRECT ANSWER-Exempt from federal income taxes Which of the following statements correctly describes a contract of indemnity? - CORRECT ANSWER-One party is restored to the same financial position the party was in before the loss occurred How is a life insurance policy dividend legally defined? - CORRECT ANSWER-A