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CALIFORNIA LIFE PRACTICE EXAM A
{ALREADY GRADED A+ } NEWEST
VERSION
1. Question: INTENTIONALLY OMITTING A HISTORY OF HEART PROBLEMS ON AN
APPLICATION IS
Correct Answer: CONCEALMENT
2. Question: THE PREMIUM MODES CAN BE BEST DESCRIBED AS THE
Correct Answer: FREQUENCY OF PREMIUM PAYMENT
3. Question: THE RIGHT TO A FULL REFUND OF PREMIUMS FOR INSUREDS AGE 60 OR
OLDER IS
Correct Answer: 30 DAYS
4. Question: WHICH POLICY IS A COMBINATION OF ANNUAL RENEWABLE TERM
INSURANCE AND INTEREST-SENSITIVE CASH VALUE?
Choices:
- Whole Life
- Universal Life
- Variable Life
- Adjustable Life
Correct Answer: B) UNIVERSAL LIFE
5. Question: A PERSON WHO SIGNS A FRAUDULENT CLAIM FORM MAY BE FOUND GUILTY
OF
Correct Answer: PERJURY
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6. Question: THE MEDICAL INFORMATION BUREAU (MIB) IS A NONPROFIT TRADE
ASSOCIATION THAT MAINTAINS
Correct Answer: MEDICAL INFORMATION ON APPLICANTS FOR LIFE AND HEALTH
INSURANCE
7. Question: THE POSSIBILITY OF A FINANCIAL LOSS INCURRED BY A LIFE INSURANCE
COMPANY FOR THE PREMATURE DEATH OF AN INSURED IS KNOW AS A
Correct Answer: RISK
8. Question: WHEN REPLACING A POLICY THE PRODUCER MUST PRESENT THE
APPLICANT WITH A NOTICE REGARDING REPLACEMENT OF LIFE INSURANCE
Correct Answer: AT THE TIME OF TAKING THE APPLICATION
9. Question: A TECHNIQUE USED TO DETERMINE THE AMOUNT OF LIFE INSURANCE
NEEDED BY FOCUSING ON THE PROJECTED EARNING POTENTIAL OF AN INSURED IS
CALLED THE
Correct Answer: HUMAN LIFE VALUE APPROACH
10. Question: AN ANNUITY THAT IS PURCHASED WITH A LUMP SUM PREMIUM AND
WHOSE BENEFITS BEGIN AFTER 12 MONTHS IS CALLED A
Correct Answer: SINGLE PREMIUM DEFERRED ANNUITY
11. Question: A TAX-SHELTERED ANNUITY (TSA) IS A QUALIFIED PLAN AVAILABLE FOR
Correct Answer: NONPROFIT ORGANIZATIONS
12. Question: THE INTENT OF REPLACEMENT REGULATIONS IS TO PROTECT THE
Correct Answer: POLICYOWNER
13. Question: WHICH PROVISION ALLOWS A LAPSED POLICY TO BE PUT BACK IN FORCE?
Choices:
- Reinstatement
- Grace Period
- Nonforfeiture
- Incontestability
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Correct Answer: A) REINSTATEMENT
14. Question: ACCORDING TO THE CALIFORNIA DEPARTMENT OF INSURANCE, AN
INSURER WHOSE ARTICLES OF INCORPORATION ARE REGISTERED IN OSLO, NORWAY IS
CONSIDERED A/AN
Correct Answer: ALIEN INSURER
15. Question: MORTALITY IS DEFINED AS THE
Correct Answer: RATE OF DEATH
16. Question: WHICH OF THE FOLLOWING IS NOT A CHARACTERISTIC OF GROUP LIFE
INSURANCE?
Choices:
- It is generally written as annual renewable term.
- Participants receive a certificate of insurance.
- A group may exist for the purpose of purchasing insurance.
- The employer is the policyholder.
Correct Answer: C) A GROUP MAY EXIST FOR THE PURPOSE OF PURCHASING
INSURANCE.
17. Question: WHEN A PRODUCER COLLECTS THE INITIAL PREMIUM AND ISSUES A
CONDITIONAL RECEIPT, THE RECEIPT
Correct Answer: MAY ALLOW LIFE INSURANCE COMPANIES TO START COVERAGE
BEFORE POLICY DELIVERY
18. Question: THE LAW OF LARGE NUMBERS ALLOWS AN INSURANCE COMPANY TO
PREDICT THE EXPECTED LOSSES AMONG
Correct Answer: MEMBERS OF A GROUP OF INDIVIDUALS WITH SIMILAR RISKS
19. Question: IF AN INSURER'S LEGAL RESERVE FUNDS ARE FOUND TO BE LESS THAN
THE MINIMUM REQUIRED BY LAW THE INSURER IS CONSIDERED
Correct Answer: INSOLVENT
20. Question: WHICH TYPE OF POLICY WOULD BE SUITABLE TO PROTECT THE BALANCE
OF A HOME MORTGAGE?
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Choices:
- Increasing Term
- Level Term
- Decreasing Term
- Whole Life
Correct Answer: C) DECREASING TERM
21. Question: WHEN MUST INSURABLE INTEREST EXIST?
Correct Answer: AT THE TIME OF APPLICATION
22. Question: THE RIDER THAT PROVIDES FOR PARTIAL PAYMENT OF THE DEATH BENEFIT
IN ADVANCE TO HELP WITH NURSING OR COALESCENT HOME EXPENSES IS THE
Correct Answer: LONG-TERM CARE
23. Question: WHICH ANNUITY PAYOUT OPTIONS GUARANTEES THE RETURN OF ALL THE
PRINCIPAL INVESTED IN THE CONTRACT?
Choices:
- Life with Period Certain
- Refund Life Annuity
- Joint and Survivor Annuity
- Straight Life Annuity
Correct Answer: B) REFUND LIFE ANNUITY
24. Question: WHICH OF THE FOLLOWING STATEMENTS IS NOT TRUE ABOUT
PARTICIPATION POLICIES?
Choices:
- They pay dividends to policyholders.
- They pay dividends to stockholders.
- Dividends are not guaranteed.
- Premiums may be slightly higher than non-participating policies.
