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CA Life Insurance Practice Questions Exam Correct Detailed Answers (Verified Answers) Already Graded A+
- Question: 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.
- Question: All of the following would be considered unfair trade practices EXCEPT
- Question: All of the following statements about aleatory contracts are true EXCEPT
Correct Answer: committing any act of discrimination whether it be deemed fair or unfair.
Correct Answer: the insured and insurer contribute equally to the contract.
- Question: 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.
- Question: A contract in which one party promises to indemnify another against loss that
arises from an unknown event is
Correct Answer: an insurance policy.
- Question: The direct distribution of insurance utilizes all of the following to promote the
sale of insurance EXCEPT
Correct Answer: telephone call from an agent.
- Question: Which of the following information is not required to be communicated in a
Life insurance contract?
Correct Answer: Personal judgment.
8. Question: Any situation that presents the possibility of a loss is known as
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Correct Answer: a loss exposure.
- Question: When must insurance records of insurance agents and brokers be made
available to the Insurance Commissioner?
Correct Answer: At all times.
- Question: What is meant by referring to an insurance policy as a unilateral contract?
Correct Answer: Only one party makes a legally enforceable promise.
11. Question: 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. Question: In insurance terminology, "indemnity" means
Correct Answer: make whole.
- Question: As defined in the California insurance Code, "insurance" is a
Correct Answer: contract.
- Question: 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
- Question: 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. Question: Which of the following statements regarding risk is TRUE?
Correct Answer: Only pure risks are insurable.
- Question: The purchase of an insurance policy may accomplish all of the following for
the insured EXCEPT
Correct Answer: the elimination of risk.
- Question: Insureds are entitled to recover an amount NOT greater than the amount of
their loss under the principle of
Correct Answer: indemnity.
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- Question: What rule is used to determine the importance of a representation?
Correct Answer: The materiality of concealment.
- Question: The required contents of a policy include all of the following EXCEPT
Correct Answer: the probability of loss
21. Question: All of the following are characteristics of reinsurance EXCEPT it
Correct Answer: increases the unearned premium reserve.
- Question: According to the California Insurance Code, an insurance policy must
specify all of the following EXCEPT the
Correct Answer: financial rating of the insurer.
- Question: All of the following qualify as "background information" as defined in Section
1729.2 of the California Insurance Code, EXCEPT
Correct Answer: misdemeanor charges filed, not resulting in a conviction.
- Question: Loss retention is an effective risk management technique when all of the
following conditions exist EXCEPT the
Correct Answer: probability of loss is unknown.
- Question: A situation in which there is a possibility of loss or a gain is a
Correct Answer: speculative risk.
- Question: Why is having a large number of similar exposure units important to
insurers?Correct Answer: The greater the number insured, the more accurately the insurer can predict losses and set appropriate premiums.
27. Question: All of the following are benefits of insurance EXCEPT it
Correct Answer: eliminates fraudulent losses.
28. Question: Who are members of the Medical information Bureau?
Correct Answer: Life and health insurers.
- Question: The process by which an insurer decides whether to issue requested
insurance is called
Correct Answer: underwriting.
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- Question: Unless it is merely a statement of an expectation or belief, a representation
as to the future is considered which of the following?
Correct Answer: Promise
- Question: Upon notification of a claim, a claimant must be given access to the
California Fair Claims Settlement Practices resolution by all of the following means
EXCEPT
Correct Answer: by interview appointment with the agent of record.
32. Question: What is the definition of premium?
Correct Answer: Money an insured pays an insurer to obtain the benefits provided in the policy.
33. Question: What is the goal of the underwriting process?
Correct Answer: to avoid selecting a disproportionate number of bad risks.
34. Question: Insurer policy expenses include all of the following EXCEPT
Correct Answer: premiums.
- Question: Unintentional concealment entitles the injured party to which course of
action, if any?
Correct Answer: Rescission of the contract.
- Question: Making an insured whole by restoring them to the same condition as before
a loss is an example of
Correct Answer: the principle of indemnity.
37. Question: Risk can be defined as all of the following EXCEPT
Correct Answer: the cause of loss
38. Question: Which of the following is a requirement of a contract?
Correct Answer: There must be an offer and acceptance of the contract terms.
39. Question: Moral hazard can be defined as the increase
Correct Answer: chance of a loss occurring due to an insured's dishonest tendencies.
