CA Life and Health Exam Questions With
Correct Answers
What is insurance? - AnswerInsurance is the legal contract where two parties agree that
if something will happen, a value will be exchanged.
.What's the difference between pure risk and speculative risk? - AnswerPure risk is
when you'll lose it all or there will be no change. Speculative risk you can either win or
lose.
.What is peril? - Answerperil is the causes of loss insured against in an insurance policy
.What is hazard? - Answerconditions that increase the probability of something bad
happening
.What's the diff between moral, morale, and physical hazard? - Answerphysical is the
hazard that results from physical body issues. Moral hazard is the evaluation of
character (lying) morale hazard is an indifference which causes risk.
.What is the law of large numbers? - Answerthe larger the number of people more
exposed to risk, the more predictable the risk outcome.
.What is an insurable event? - Answerthe more predictable an event, the more insurable
it becomes
.What's the diff between contract and tort law - Answertort is non-contract and private
.Four major elements of a contract - Answeragreement, consideration, competent
parties, legal purpose
.contract of adhesion - Answerprepared by insurer then accepted or rejected
.Conditional contract - Answerconditions need to be met in order for contract to be
executed
.aleatory contract - Answerexchange of unequal amounts of value
.unilateral contract - Answeronly one party is forced to do something
.personal contract - Answercan't be transferred w/out notifying insurer
.When can you rescind a contract - Answerintentional or unintentional concealment,
violation of material warranty, false material representation
, .six specifications for insurance policies - Answerparties contracted
person insured
statement of insurable interest
risks insured against
time period
stated premium
.4 categories of info necessary for financial planning - Answerdebt
income
mortgage
expenses
.key person insurance - Answerlosing someone key to a business
.buy-sell insurance (business continuation) - Answerwhat will be done with a business if
the owner dies
.Premiums - Answerlife insurance payment installments
.term life insurance - Answercovered only for a specific term
.three types of term life insurance - Answerlevel
increasing
decreasing
.fixed life insurance is - Answercontracts that offer guaranteed minimum or stated
benefits
.Variable life insurance is - Answerwhere it keeps place with inflation and cash value
accumulates based upon a specific portfolio of stocks (investment based) ; level fixed
.Class designation for beneficiaries - Answer
.Consideration clause - Answerstates value offered by insured (amount of premium
payment)
.accumulation period - Answerwhen the annuitant makes payments and grow tax
deferred
.What is not funded by an annuity - Answerdeath benefits
.Annuitants must be a - Answernatural person
.Gross premium = - AnswerMortality - Interest + Expenses
Correct Answers
What is insurance? - AnswerInsurance is the legal contract where two parties agree that
if something will happen, a value will be exchanged.
.What's the difference between pure risk and speculative risk? - AnswerPure risk is
when you'll lose it all or there will be no change. Speculative risk you can either win or
lose.
.What is peril? - Answerperil is the causes of loss insured against in an insurance policy
.What is hazard? - Answerconditions that increase the probability of something bad
happening
.What's the diff between moral, morale, and physical hazard? - Answerphysical is the
hazard that results from physical body issues. Moral hazard is the evaluation of
character (lying) morale hazard is an indifference which causes risk.
.What is the law of large numbers? - Answerthe larger the number of people more
exposed to risk, the more predictable the risk outcome.
.What is an insurable event? - Answerthe more predictable an event, the more insurable
it becomes
.What's the diff between contract and tort law - Answertort is non-contract and private
.Four major elements of a contract - Answeragreement, consideration, competent
parties, legal purpose
.contract of adhesion - Answerprepared by insurer then accepted or rejected
.Conditional contract - Answerconditions need to be met in order for contract to be
executed
.aleatory contract - Answerexchange of unequal amounts of value
.unilateral contract - Answeronly one party is forced to do something
.personal contract - Answercan't be transferred w/out notifying insurer
.When can you rescind a contract - Answerintentional or unintentional concealment,
violation of material warranty, false material representation
, .six specifications for insurance policies - Answerparties contracted
person insured
statement of insurable interest
risks insured against
time period
stated premium
.4 categories of info necessary for financial planning - Answerdebt
income
mortgage
expenses
.key person insurance - Answerlosing someone key to a business
.buy-sell insurance (business continuation) - Answerwhat will be done with a business if
the owner dies
.Premiums - Answerlife insurance payment installments
.term life insurance - Answercovered only for a specific term
.three types of term life insurance - Answerlevel
increasing
decreasing
.fixed life insurance is - Answercontracts that offer guaranteed minimum or stated
benefits
.Variable life insurance is - Answerwhere it keeps place with inflation and cash value
accumulates based upon a specific portfolio of stocks (investment based) ; level fixed
.Class designation for beneficiaries - Answer
.Consideration clause - Answerstates value offered by insured (amount of premium
payment)
.accumulation period - Answerwhen the annuitant makes payments and grow tax
deferred
.What is not funded by an annuity - Answerdeath benefits
.Annuitants must be a - Answernatural person
.Gross premium = - AnswerMortality - Interest + Expenses
