California Life Insurance

Front 1

When an accidental death benefit is added to a whole life policy, how does this affect this policy's cash value?

Back 1

The policy's cash value will NOT be affected

Front 2

Which of the following is NOT a common life insurance policy rider?

Back 2

Extended term

Hint 2

Term

Front 3

ESPOs (employee stalk ownership) are typically invested in

Back 3

Employer stock

Hint 3

Definition

Front 4

The CA Life Insurance Code requires an insurer must have enough assets to cover its liabilities and for reinsurance of all outstanding risks. To remain solvent, it must also possess additional assets equal to what amount?

Back 4

Its paid-in capital

Front 5

Materiality

Back 5

Used to describe relevant information that would probably influence an insurer's assesment of a proposed contract

Front 6

Consumer Report

Back 6

Based on creditworthiness and personal characteristics that influence and insurance applicant's eligilbilty for life and health insurance

Front 7

Solicitor

Back 7

Anyone employed in CA to assist an insurance agent in transacting insurance

Front 8

Substandard

Back 8

This risk classificatiom charges the highest premium

Front 9

Which of the following is NOT a primary objective of insurance regulation?

Back 9

Interest policy provisions

Front 10

Variable Life

Back 10

A life insurance policy where the insured can choose where the cash value can be invested

Front 11

Deferred Annuity

Back 11

A savings vehicle designed to first accumulate funds and then systematically liquidate the funds

Hint 11

Annuity

Front 12

A creditor would be allowed rights to life insurance policy proceeds if which of the following beneficiaries is chosen?

Back 12

The insured's estate

Front 13

May

Back 13

Implies permissiveness according to the CA Insurance Code

Front 14

Blackout Period

Back 14

Affects the surviving spouce's benefits

Front 15

Conservation

Back 15

An agent's attempt to stop the replacement of an existing life insurance policy

Front 16

What are collateral assignments normally associated with?

Back 16

Bank loans

Front 17

Divident Options

Back 17

A life insurance policy can be surrendered for its cash value under which policy provision

Front 18

Which type of risk is gambling?

Back 18

Speculative Risk

Front 19

Reinsurance

Back 19

An insurer enters into a contract with a third party to insure itself against losses from insurance policies it issues

Front 20

The free-look period for life insurance policyowners age 60 or older is

Back 20

30 days

Front 21

In order to be considered "currently insured" under Social Security, an individual must be credited with

Back 21

6 quarters of coverage during the last 13-quarter period

Front 22

The CA Insurance Code has authorized standards for names used by life insurance agents. Which of the following, if any, are automatically acceptable for Lance Manyon, a holder of the CLU designation?

Back 22

Lance Manyon Insurance Services

Front 23

Joint Life Policy

Back 23

Covers 2 people. Only pay face amount when the first person dies

Front 24

Which of the following statements about aleatory contracts is NOT true

Back 24

The unsured and the insurer contribute equally to the contract

Front 25

What type of license is required for an individual who charges a fee to review an insured's existing life insurance policy?

Back 25

Life and disability analyst

Front 26

Participating Policies

Back 26

Gives the policy owner the right to share in the insurer's surplus

Front 27

Which of the following is NOT a life insurance settlement option?

Back 27

Extended term option

Front 28

Implied authority

Back 28

Unwritten authority that is not expressy granted, but which the agent is assumed to have in order to transact the business of the insurer.

Front 29

Which of the following does the CA Department of Insurance (CDI) have NO jurisdiction over?

Back 29

Medicare

Front 30

A terninated employee that has exercised the conversion privilege is able to convert

Back 30

Term insurance into permanent insurance

Front 31

Premiums are best described as

Back 31

The amount an insured pays per unit of coverage

Front 32

An insurer owned by its policyholders is called a

Back 32

Mutual insurer

Front 33

Loss exposures

Back 33

Any situation that has the potential for loss

Front 34

Rate

Back 34

The price of insurance for each exposure unit

Front 35

Admitted

Back 35

When an insurer has met the qualifications necessary to transact business in California, it is said to be

Front 36

What is a common reason people purchase an annuity?

Back 36

To protect against the risk of outliving their financial resources

Front 37

In California, an insurer organized under the state laws of Oregon is called a

Back 37

Foreign insurer

Front 38

Commercial Insurers (Private)

Back 38

Sell insurance for profit

Hint 38

Sells primarily: life insurance & annuities, somwtimes accident/health insurance & property/casualty insurance

Front 39

Non-deductible contributions are typically associated with a

Back 39

Roth IRA

Hint 39

Entirely tax free when withdrawn

Front 40

A representation may be altered or withdrawn

Back 40

Only beroee the insurance is in effect

Front 41

When handling premiums for an insured, an agent is acting in which capacity?

Back 41

Fiduciary

Front 42

According to the CA Insurance Code, who is responsible for submitting a life agent's appointment?

Back 42

Insurer

Front 43

Which statement is CORRECT when describing a contract of adhesion

Back 43

Contract may be accepted or rejected by the insured

Front 44

Which of the following does NOT have to be included on life insurance policy illustrations?

Back 44

Statement that all values and benefits are guarenteed

Front 45

Which of the following is a type of insurance where an insurer transfers loss exposures from policies written for its insureds?

Back 45

Reinsurance

Front 46

Which or these is NOT a valid policy dividend option?

Back 46

Monthly income payments

Front 47

Which of the following is NOT a component of determining policy premiums?

Back 47

Dividends

Front 48

Why is a life insurance policy's delivery date important?

Back 48

The free-look period begins on the policy delivery date.

Hint 48

The CA Insurance Cide gives an individual between 10-30 days to return a life policy for cancellation.

Front 49

Mike and Ike are 30 year old identical twins. Both are in excellent health. Each brother purchases a life policy that has a $750 annual premium. Mike buys a 10-year renewable term policy. Ike purchases a whole life policy. All of the following statements are true EXCEPT

Back 49

Mike's policy will develop no cash value over the policy’s term

Hint 49

Since a term policy provides for no cash value, there are no nonforfeiture benefit options available to Mike

Front 50

Which of the following is NOT an important reason for a life insurance application?

Back 50

The beneficiary must sign the application before the insurer will issue the policy

Front 51

Which of these is the automatic mode of settlement for life insurance policy proceeds?

Back 51

Lump-sum

Front 52

The importance of a representation is demonstrated in what rule?

Back 52

Materiality of concealment

Front 53

What area of group health insurance is regulated under the Employee Retirement Security Act of 1974 (ERISA)?

Back 53

Disclosure and reporting

Front 54

Which of the following does the California Insurance Code NOT require an insurance policy to specify?

Back 54

An insurer's financial rating