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California Life Insurance State Exam
Simulator / Exam Questions &
Expertly Verified Answers, 2025 /
_____________Quiz____________? Exclusion ratio -
Answer ✓✓
An annuitant would life to determine the amount of an annuity distribution that is exempt from taxation. What is used to calculate this? Mortality rate, Exclusion ratio, Morbidity rate, Debt-to-Equity ration _____________Quiz____________? Offers a maximum interest rate that increases annually -
Answer ✓✓
Which of the following is NOT a feature of equity-indexed annuities?
Offers long term inflation protection, Offers a minimum guaranteed rate, Offers a maximum interest rate that increases annually, Offers protection during a decline in the stock market _____________Quiz____________? Joint and survivor annuity -
Answer ✓✓
What kind of annuity pays income to two annuitants until their deaths? Period certain annuity Joint and survivor annuity Straight life annuity Installment refund _____________Quiz____________? For a minimum of 120 months and a maximum of the remainder of his life -
Answer ✓✓
Victoria owns a life annuity and elects to receive annuity payments monthly for the remainder of her life with "ten years certain". Her annuity will make payments For a period of time dependent on the performance of the annuity's underlying assets For a maximum of 120 months For the remainder of her life only For a minimum of 120 months and a maximum of the remainder of his life _____________Quiz____________? Variable annuity -
Answer ✓✓
An annuitant would life to determine the current value of her annuity. To do this, she multiplies the number of "accumulation units" she owns times the unit value of the "separate account". What kind of annuity BEST matches this description?
An annuity which is backed by a life insurer's separate account is called a(n) Equity indexed annuity Variable annuity Immediate annuity 403(b) plan _____________Quiz____________? The time at which benefit payments start -
Answer ✓✓
What distinguishes a deferred annuity from an immediate annuity? The time at which benefit payments start The benefit payment amount The taxation of benefit payments The age at which the annuity can be purchased _____________Quiz____________? Deferred annuity -
Answer ✓✓
A savings vehicle designed to first accumulate funds and then systematically liquidates the funds is called a(n) Immediate annuity Deferred annuity Endowment Whole life policy _____________Quiz____________? Insurance policy -
Answer ✓✓
Which of the following is a contract that involves one party which indemnifies another when a loss arises from an unknown event? Insurance policy Loss contract Warranty arrangement Indemnification arrangement _____________Quiz____________? Mutual insurer -
Answer ✓✓
A participating company is also referred to as which type of insurer? Reciprocal insurer Re-insurer Mutual insurer Domestic insurer _____________Quiz____________? Reinsurance -
Answer ✓✓
An insurer enters into a contract with a third party to insure itself against losses from insurance policies it issues. What is this agreement called? Reinsurance Mutual Multi-line Reserves _____________Quiz____________? Primary insurer -
_____________Quiz____________? Increases the unearned premium reserve -
Answer ✓✓
Which of the following is NOT a characteristic of reinsurance? Protects against a very large claim Increases the unearned premium reserve A specialized branch of the insurance industry Enables insurer to meet certain objectives _____________Quiz____________? Marketing -
Answer ✓✓
One important function of an insurance company is to identify and sell to potential customers. Which of the BEST describes this function? Regulation Marketing Underwriting Reinsurance _____________Quiz____________? It is the distribution of excess of funds accumulated by the insurer on participating policies
Answer ✓✓
Which of the following statements regarding a life insurance policy dividend is TRUE? It is a stockholders return on his investment in the company It is the distribution of excess of funds accumulated by the insurer on participating policies It represents the built-up of cash value in a permanent insurance policy It represents a refund of overcharged premium in a non-participating whole life policy
_____________Quiz____________? Losses due to fraud are eliminated -
Answer ✓✓
Which of the following is NOT a benefit of insurance? Source of investment funds Makes a loss whole again Reduces the uncertainty of loss exposures Losses due to fraud are eliminated _____________Quiz____________? Mutual insurer -
Answer ✓✓
An insurer owned by its policyholders is called a Multi-line insurer Mutual insurer Reinsurer Stock insurer _____________Quiz____________? One party is restored to the same financial position the party was in before the loss occurred -
Answer ✓✓
Which of the following statements statements correctly describes a contract of indemnity? One party is restored to the same financial position the party was in before the loss occurred The unequal exchange of value or consideration for both parties One party (the insurance company) prepares the contract with no negotiation between the application and insurer
_____________Quiz____________? Implied authority -
Answer ✓✓
Reasonably necessary acts that an agent must perform for carrying out his/her expressly authorized duties are covered by an agent's Express authority Implied authority Apparent authority Evident authority _____________Quiz____________? Indemnity -
Answer ✓✓
Restoring an insured to the same condition as before a loss is an example of the principle of Utmost good faith Adhesion Legal purpose Indemnity _____________Quiz____________? Rescinding the contract -
Answer ✓✓
Which course of action is the insurer entitled to when deliberate concealment is committed by the insured? Rescinding the contract Charge a higher premium Charge a penalty
Nothing _____________Quiz____________? The insured and the insurer contribute equally to the contract -
Answer ✓✓
Which of the following statements about aleatory contracts is NOT true? Insurance contracts are considered aleatory The insured and the insurer have the potential for unequal contributions The insured and the insurer contribute equally to the contract Aleatory contracts are conditioned upon the occurrence of an event _____________Quiz____________? Fiduciary -
Answer ✓✓
When handling premiums for an insured, an agent is acting in which capacity? Adhesion Fiduciary Conditional Aleatory _____________Quiz____________? Indemnity -
Answer ✓✓
Which principle is accurately described with the statement "Insureds are entitled to recover an amount NOT greater than the amount of their loss"? Unilateral Indemnity Aleatory
Law of adhesion Materiality of concealment Consideration clause _____________Quiz____________? An offer and acceptance of the contract terms -
Answer ✓✓
A contract requires Implied authority An offer and acceptance of the contract terms Negotiation between the involved parties An offer and acceptance of the contract terms _____________Quiz____________? Dividends -
Answer ✓✓
Which of the following is NOT a component of determining policy premiums? Dividends Mortality Interest Expenses _____________Quiz____________? Insurer's expenses -
Answer ✓✓
When calculating life insurance premium rates, which component would an agent's commission fall under? Morbidity
Mortality Insurer's expenses Occupation _____________Quiz____________? Mortality tables -
Answer ✓✓
The probability of death, listed by year, is demonstrated in Risk tables Frequency tables Mortality tables Morbidity tables _____________Quiz____________? Exempt from federal income taxes -
Answer ✓✓
How are death benefits that are received by a beneficiary normally treated for tax purposes? Taxable at the beneficiary's current tax bracket Subject to state and local taxes only Exempt from federal income taxes Taxable as a capital gain _____________Quiz____________? Premiums -
Answer ✓✓
Which of the following is NOT an insurer policy expense? Rent
Assigns a policy's face amount to the insured's estate if the beneficiary dies before the insured Restricts the ability of the beneficiary to assign benefits _____________Quiz____________? The insured's estate -
Answer ✓✓
A creditor would be allowed rights to life insurance policy proceeds if which of the following beneficiaries is chosen? The insured's mother The insured's estate The insured's children The insured's spouse _____________Quiz____________? The amount an insured pays per unit of coverage -
Answer ✓✓
Premiums are best described as Money paid by the insurer for settling a claim Money paid by the insured to acquire a policy's benefits The amount an insured pays per unit of coverage Commissions payable to the writing agent _____________Quiz____________? Mortality rate -
Answer ✓✓
Which of the following describes the number of deaths in a year compared to the number of people in a select group? Law of large number ratio
Mortality rate Morbidity rate Risk ratio _____________Quiz____________? Interest option -
Answer ✓✓
A beneficiary receives only the death benefit earnings in which settlement option? Interest option Life option Stock option Fixed amount option _____________Quiz____________? Lump-sum -
Answer ✓✓
Which of these is the automatic mode of settlement for life insurance policy proceeds? Fixed period Interest only Extended term Lump-sum _____________Quiz____________? Grace period -
Answer ✓✓
Which policy provision protects the policyowner from unintentional lapse of the contract? Grace period Free look period
Covered hazard Mandatory provision _____________Quiz____________? Accelerated death benefit -
Answer ✓✓
Which provision will pay a portion of the death benefit prior to the insured's death due to a serious illness? Cash surrender Nonforfeiture Return of premium Accelerated death benefit _____________Quiz____________? A return of excess premium and not taxable -
Answer ✓✓
How is a life insurance policy dividend legally defined? A return of excess premium and partially taxable A return of excess of premium and fully taxable A return of excess premium and not taxable A return of excess premium subject to capital gain tax _____________Quiz____________? Dividend schedule -
Answer ✓✓
Which of the following does a policyowner NOT have the right to change? Payment method Dividend option
Dividend schedule Beneficiary _____________Quiz____________? Grace period -
Answer ✓✓
What time period allows an insured's life insurance policy to remain in force even if the premium was not paid on the due date? Entire contract period Free-look period Reinstatement period Grace period _____________Quiz____________? Reinstatement provision -
Answer ✓✓
After a policy has lapsed, which provision allows the insured to continue coverage? Entire contract provision Reinstatement provision Nonforfeiture provision Grace period provision _____________Quiz____________? Waiver of premium provision -
Answer ✓✓
Bruce is involved in an accident and becomes totally and permanently disabled. His insurance policy continues in force without payment of further premiums. Which policy provision is responsible for this? Waiver of premium provision
