CA Life Insurance State Exam Questions With Complete Solutions

1.What is meant by referring to an insurance policy as a unilateral contract? correct answer: Only one party makes a legally enforceable promise. 2.When must insurance records of insurance agents and brokers be made available to the Insurance Commissioner? correct answer: At all times. 3.Any situation that presents the possibility of a loss is known as correct answer: a loss exposure 4.Which of the following information is not required to be communicated in a Life insurance contract? correct answer: Personal judgment. 5.The direct distribution of insurance utilizes all of the following to promote the sale of insurance EXCEPT correct answer: telephone call from an agent. 6.A contract in which one party promises to indemnify another against loss that arises from an unknown event is correct answer: an insurance policy. 7.All of the occurrences listed below are examples of an insurable event as defined by the California Insurance Code EXCEPT correct answer: an insured suffers a financial loss in the state lottery 8.All of the following statements about aleatory contracts are true EXCEPT correct answer: the insured and insurer contribute equally to the contract. 9.All of the following would be considered unfair trade practices EXCEPT correct answer: committing any act of discrimination whether it be deemed fair or unfair. 10.As authorized by the California Insurance Code, the Insurance Commissioner has provided standards for names used by life insurance agents. Under these standards which, if any, of the following are automatically acceptable for Mary Brown, a holder of the CLU designation? correct answer: Mary Brown Insurance Services. 11.A contract of indemnity is one in which correct answer: one party is restored to the same financial position the party was in before the loss occurred. 12.In insurance terminology, "indemnity" means correct answer: make whole. 13.As defined in the California insurance Code, "insurance" is a correct answer: contract. 14.What would a person be guilty of who refuses to deliver any books, records, or assets to the commissioner once a seizure order has been executed? correct answer: A misdemeanor 15.An agent who is acting as an insurance agent, broker, solicitor, life agent, accident and health, or bail agent acts in which capacity when handling premiums or return premiums for an insured? correct answer: Fiduciary 16.Which of the following statements regarding risk is TRUE? correct answer: Only pure risks are insurable. 17.The purchase of an insurance policy may accomplish all of the following for the insured EXCEPT correct answer: the elimination of risk. 18.Insureds are entitled to recover an amount NOT greater than the amount of their loss under the principle of correct answer: indemnity. 19.What rule is used to determine the importance of a representation? correct answer: The materiality of concealment. 20.The required contents of a policy include all of the following EXCEPT correct answer: the probability of loss