CA Life and Health Exam Questions &
Answers 100% pass
What is insurance? - ANSWERSInsurance 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? - ANSWERSPure 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? - ANSWERSperil is the causes of loss insured against in an insurance
policy
What is hazard? - ANSWERSconditions that increase the probability of something bad
happening
What's the diff between moral, morale, and physical hazard? - ANSWERSphysical 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? - ANSWERSthe larger the number of people more
exposed to risk, the more predictable the risk outcome.
What is an insurable event? - ANSWERSthe more predictable an event, the more
insurable it becomes
What's the diff between contract and tort law - ANSWERStort is non-contract and
private
Four major elements of a contract - ANSWERSagreement, consideration, competent
parties, legal purpose
contract of adhesion - ANSWERSprepared by insurer then accepted or rejected
Conditional contract - ANSWERSconditions need to be met in order for contract to be
executed
aleatory contract - ANSWERSexchange of unequal amounts of value
unilateral contract - ANSWERSonly one party is forced to do something
personal contract - ANSWERScan't be transferred w/out notifying insurer
, When can you rescind a contract - ANSWERSintentional or unintentional concealment,
violation of material warranty, false material representation
six specifications for insurance policies - ANSWERSparties contracted
person insured
statement of insurable interest
risks insured against
time period
stated premium
4 categories of info necessary for financial planning - ANSWERSdebt
income
mortgage
expenses
key person insurance - ANSWERSlosing someone key to a business
buy-sell insurance (business continuation) - ANSWERSwhat will be done with a
business if the owner dies
Premiums - ANSWERSlife insurance payment installments
term life insurance - ANSWERScovered only for a specific term
three types of term life insurance - ANSWERSlevel
increasing
decreasing
fixed life insurance is - ANSWERScontracts that offer guaranteed minimum or stated
benefits
Variable life insurance is - ANSWERSwhere it keeps place with inflation and cash value
accumulates based upon a specific portfolio of stocks (investment based) ; level fixed
Class designation for beneficiaries - ANSWERS
Consideration clause - ANSWERSstates value offered by insured (amount of premium
payment)
accumulation period - ANSWERSwhen the annuitant makes payments and grow tax
deferred
What is not funded by an annuity - ANSWERSdeath benefits
Annuitants must be a - ANSWERSnatural person
Answers 100% pass
What is insurance? - ANSWERSInsurance 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? - ANSWERSPure 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? - ANSWERSperil is the causes of loss insured against in an insurance
policy
What is hazard? - ANSWERSconditions that increase the probability of something bad
happening
What's the diff between moral, morale, and physical hazard? - ANSWERSphysical 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? - ANSWERSthe larger the number of people more
exposed to risk, the more predictable the risk outcome.
What is an insurable event? - ANSWERSthe more predictable an event, the more
insurable it becomes
What's the diff between contract and tort law - ANSWERStort is non-contract and
private
Four major elements of a contract - ANSWERSagreement, consideration, competent
parties, legal purpose
contract of adhesion - ANSWERSprepared by insurer then accepted or rejected
Conditional contract - ANSWERSconditions need to be met in order for contract to be
executed
aleatory contract - ANSWERSexchange of unequal amounts of value
unilateral contract - ANSWERSonly one party is forced to do something
personal contract - ANSWERScan't be transferred w/out notifying insurer
, When can you rescind a contract - ANSWERSintentional or unintentional concealment,
violation of material warranty, false material representation
six specifications for insurance policies - ANSWERSparties contracted
person insured
statement of insurable interest
risks insured against
time period
stated premium
4 categories of info necessary for financial planning - ANSWERSdebt
income
mortgage
expenses
key person insurance - ANSWERSlosing someone key to a business
buy-sell insurance (business continuation) - ANSWERSwhat will be done with a
business if the owner dies
Premiums - ANSWERSlife insurance payment installments
term life insurance - ANSWERScovered only for a specific term
three types of term life insurance - ANSWERSlevel
increasing
decreasing
fixed life insurance is - ANSWERScontracts that offer guaranteed minimum or stated
benefits
Variable life insurance is - ANSWERSwhere it keeps place with inflation and cash value
accumulates based upon a specific portfolio of stocks (investment based) ; level fixed
Class designation for beneficiaries - ANSWERS
Consideration clause - ANSWERSstates value offered by insured (amount of premium
payment)
accumulation period - ANSWERSwhen the annuitant makes payments and grow tax
deferred
What is not funded by an annuity - ANSWERSdeath benefits
Annuitants must be a - ANSWERSnatural person
