California Life Practice Exam A

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Question 1 of 1

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472064

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The term aleatory is best defined by which of the following?

Select the correct answer(s).

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Explanation

Insurance is designed so that those who don't make claims help pay for those who do make claims. Thus, it is possible that a policyowner could pay a small amount of premium before the insured dies, and the beneficiary would receive a large death benefit.

472067

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Of the following, which best describes the difference between life insurance and annuities?

Select the correct answer(s).

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Explanation

Life insurance replaces the income the insured would have earned if the insured had lived to retirement age. During the annuitant’s retirement years, annuities slowly pay out money the annuitant already owns.

472068

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Which pair are Activities of Daily Living (ADLs)?

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Explanation

ADLs are personal care, nutrition, and health issues such as walking, hygiene, dressing, transferring, and eating. Seeing, hearing, speaking, and sleeping are not used as an evaluation for paying benefits.

472071

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The definitions of mortality and morbidity:

Select the correct answer(s).

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Explanation

Mortal relates to death, while morbid relates to illness/disability.

472074

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Per the Code, the best definitions of “shall” and “may” are:

Select the correct answer(s).

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Explanation

While “shall” means required or mandatory, “may” means permissible or allowed.

472076

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Starting from lowest to highest, rank the initial premium paid by the client for these insurance policies below:

Select the correct answer(s).

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Explanation

Modified whole life allows the insured to pay a lower premium than traditional/ordinary whole life for the first few years. Single premium whole life requires a large, one-time, up-front payment to begin the policy; thus, it costs more than traditional whole life.

472080

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Sam has a $200,000 convertible life insurance policy. If he chooses, he can:

Select the correct answer(s).

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Explanation

Conversion allows a term policy to be changed into a cash value policy (often whole life). While the premium will increase for the same amount of death benefit, no evidence of insurability is required.

472081

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The future account value of the annuity Alex purchased is connected to the S&P 500 index. What type of annuity did he purchase?

Select the correct answer(s).

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Explanation

The S&P 500 is an index made up of the stock of 500 publically traded companies. Stocks are an ‘equity’ investment. This type of annuity is indexed to the market so that, as the economy grows, so does the value of the annuity. The money in the account is not invested directly into those 500 stocks.

472083

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The entire contract can include many components. Which of the following cannot be a part of the entire contract?

Select the correct answer(s).

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Explanation

The entire contract cannot reference any “outside” documents.

472084

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Which of the following can be written as a group policy?

Select the correct answer(s).

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Explanation

All of the above can be written as ordinary, or individual, policies. Only credit life can also be written as a group policy

472085

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How does the incontestability clause benefit the insured?

Select the correct answer(s).

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Explanation

The incontestability clause keeps the policy from being cancelled after the insured’s death despite the applicant’s misdeeds.

472087

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Under the cost of living adjustment rider, the policy:

Select the correct answer(s).

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Explanation

The COLA rider is tied to an inflation index, which permits the death benefit to increase periodically to offset the effects of inflation. The face amount will not decrease in times of deflation.

472089

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Every admitted insurer in California must maintain a unit, or department, responsible for investigating which of the following?

Select the correct answer(s).

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Explanation

While every insurer faces possible fraudulent claims, not every insurer deals with arson. The state would investigate insurer abuses such as fraud, not the companies themselves.

472091

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Concerning qualified plans, which statement is false?

Select the correct answer(s).

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Explanation

ESOP’s invest in the employer’s stock.

472092

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Of the following, which is not one of the three major loss exposures faced by insureds?

Select the correct answer(s).

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Explanation

According to the code, financial losses are not one of the 3 major loss exposures.

California Life Practice Exam A

Question 1 of 1

Time Left

The term aleatory is best defined by which of the following?

Select the correct answer(s).

(0/0)

Explanation

Of the following, which best describes the difference between life insurance and annuities?

Select the correct answer(s).

(0/0)

Explanation

Which pair are Activities of Daily Living (ADLs)?

Select the correct answer(s).

(0/0)

Explanation

The definitions of mortality and morbidity:

Select the correct answer(s).

(0/0)

Explanation

Per the Code, the best definitions of “shall” and “may” are:

Select the correct answer(s).

(0/0)

Explanation

Starting from lowest to highest, rank the initial premium paid by the client for these insurance policies below:

Select the correct answer(s).

(0/0)

Explanation

Sam has a $200,000 convertible life insurance policy. If he chooses, he can:

Select the correct answer(s).

(0/0)

Explanation

The future account value of the annuity Alex purchased is connected to the S&P 500 index. What type of annuity did he purchase?

Select the correct answer(s).

(0/0)

Explanation

The entire contract can include many components. Which of the following cannot be a part of the entire contract?

Select the correct answer(s).

(0/0)

Explanation

Which of the following can be written as a group policy?

Select the correct answer(s).

(0/0)

Explanation

How does the incontestability clause benefit the insured?

Select the correct answer(s).

(0/0)

Explanation

Under the cost of living adjustment rider, the policy:

Select the correct answer(s).

(0/0)

Explanation

Every admitted insurer in California must maintain a unit, or department, responsible for investigating which of the following?

Select the correct answer(s).

(0/0)

Explanation

Concerning qualified plans, which statement is false?

Select the correct answer(s).

(0/0)

Explanation

Of the following, which is not one of the three major loss exposures faced by insureds?

Select the correct answer(s).

(0/0)

Explanation

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