CALIFORNIA LIFE PRACTICE EXAM A QUESTIONS AND ANSWERS ALREADY PASSED

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CALIFORNIA LIFE PRACTICE EXAM A QUESTIONS AND ANSWERS ALREADY PASSED AN ANNUITY THAT IS PURCHASED WITH A LUMP SUM PREMIUM AND WHOSE BENEFITS BEGIN AFTER 12 MONTHS IS CALLED A ✔✔SINGLE PREMIUM ... DEFERRED ANNUITY A TECHNIQUE USED TO DETERMINE THE AMOUNT OF LIFE INSURANCE NEEDED BY FOCUSING ON THE PROJECTED EARNING POTENTIAL OF AN INSURED IS CALLED THE ✔✔HUMAN LIFE VALUE APPROACH WHEN REPLACING A POLICY THE PRODUCER MUST PRESENT THE APPLICANT WITH A NOTICE REGARDING REPLACEMENT OF LIFE INSURANCE ✔✔AT THE TIME OF TAKING THE APPLICATION THE POSSIBILITY OF A FINANCIAL LOSS INCURRED BY A LIFE INSURANCE COMPANY FOR THE PREMATURE DEATH OF AN INSURED IS KNOW AS A ✔✔RISK THE MEDICAL INFORMATION BUREAU (MIB) IS A NONPROFIT TRADE ASSOCIATION THAT MAINTAINS ✔✔MEDICAL INFORMATION ON APPLICANTS FOR LIFE AND HEALTH INSURANCE A PERSON WHO SIGNS A FRAUDULENT CLAIM FORM MAY BE FOUND GUILTY OF ✔✔PERJURY WHICH POLICY IS A COMBINATION OF ANNUAL RENEWABLE TERM INSURANCE AND INTEREST-SENSITIVE CASH VALUE ✔✔UNIVERSAL LIFE THE RIGHT TO A FULL REFUND OF PREMIUMS FOR INSUREDS AGE 60 OR OLDER IS ✔✔30 DAYS THE PREMIUM MODES CAN BE BEST DESCRIBED AS THE ✔✔FREQUENCY OF PREMIUM PAYMENT INTENTIONALLY OMITTING A HISTORY OF HEART PROBLEMS ON AN APPLICATION IS ✔✔CONCEALMENT A TAX-SHELTERED ANNUITY (TSA) IS A QUALIFIED PLAN AVAILABLE FOR ✔✔NONPROFIT ORGANIZATIONS THE INTENT OF REPLACEMENT REGULATIONS IS TO PROTECT THE ✔✔POLICYOWNER WHICH PROVISION ALLOWS A LAPSED POLICY TO BE PUT BACK IN FORCE? ✔✔REINSTATEMENT ACCORDING TO THE CALIFORNIA DEPARTMENT OF INSURANCE, AN INSURER WHOSE ARTICLES OF INCORPORATION ARE REGISTERED IN OSLO, NORWAY IS CONSIDERED A/AN ✔✔ALIEN INSURER MORTALITY IS DEFINED AS THE ✔✔RATE OF DEATH WHICH OF THE FOLLOWING IS NOT A CHARACTERISTIC OF GROUP LIFE INSURANCE? ✔✔A GROUP MAY EXIST FOR THE PURPOSE OF PURCHASING INSURANCE. WHEN A PRODUCER COLLECTS THE INITIAL PREMIUM AND ISSUES A CONDITIONAL RECEIPT, THE RECEIPT ✔✔MAY ALLOW LIFE INSURANCE COMPANIES TO START COVERAGE BEFORE POLICY DELIVERY THE LAW OF LARGE NUMBERS ALLOWS AN INSURANCE COMPANY TO PREDICT THE EXPECTED LOSSES AMONG ✔✔MEMBERS OF A GROUP OF INDIVIDUALS WITH SIMILAR RISKS IF AN INSURER'S LEGAL RESERVE FUNDS ARE FOUND TO BE LESS THAN THE MINIMUM REQUIRED BY LAW THE INSURER IS CONSIDERED ✔✔INSOLVENT WHICH TYPE OF POLICY WOULD BE SUITABLE TO PROTECT THE BALANCE OF A HOME MORTGAGE? ✔✔DECREASING TERM WHEN MUST INSURABLE INTEREST EXIST? ✔✔AT THE TIME OF APPLICATION THE RIDER THAT PROVIDES FOR PARTIAL PAYMENT OF THE DEATH BENEFIT IN ADVANCE TO HELP WITH NURSING OR COALESCENT HOME EXPENSES IS THE ✔✔LONG-TERM CARE WHICH ANNUITY PAYOUT OPTIONS GUARANTEES THE RETURN OF ALL THE PRINCIPAL INVESTED IN THE CONTRACT? ✔✔REFUND LIFE ANNUITY WHICH OF THE FOLLOWING STATEMENTS IS NOT TRUE ABOUT PARTICIPATION POLICIES? ✔✔THEY PAY DIVIDENDS TO STOCKHOLDERS INSURANCE CONTRACTS ARE BASED UPON A DOCTRINE WHICH REQUIRES ALL PARTIES TO THE CONTRACT TO BE HONEST. THIS IS KNOWN AS THE DOCTRINE OF ✔✔UTMOST GOOD FAITH ACCORDING TO THE CALIFORNIA INSURANCE CODE, LIFE-ONLY PRODUCERS MUST KEEP RECORDS OF THEIR TRANSACTIONS FOR AT LEAST ✔✔5 YEARS WHICH OF THESE IS NOT AN ELEMENT OF A LEGAL CONTRACT? ✔✔UNILATERAL WHICH STATEMENT IS INCORRECT ABOUT A FIXED ANNUITY? ✔✔INCOME PAYMENTS VARY FROM MONTH TO MONTH IN A GROUP POLICY, THE EMPLOYER RECEIVES ✔✔MASTER CONTRACT THE RISK OF A LOSS TO AN INSURANCE COMPANY IS ALSO REFERRED TO AS A/AN ✔✔EXPOSURE WITH A MODIFIED PREMIUM WHOLE LIFE CONTRACT, PREMIUM PAYMENTS ARE ✔✔LOWER IN THE EARLY YEARS OF THE CONTRACT IF A MISSTATEMENT OF AGE IS DISCOVERED DURING THE PROCESSING OF A LIFE INSURANCE CLAIM, THE INSURER WILL ✔✔ADJUST THE DEATH BENEFIT THE PAY-IN TIME FOR DEFERRED ANNUITIES IS KNOWN AS THE ✔✔ACCUMULATION PERIOD STATEMENTS MADE BY AN APPLICANT ON AN APPLICATION FOR INSURANCE ARE CONSIDERED TO BE ✔✔REPRESENTATIONS THE CAUSE OF A LOSS IS KNOWN AS A/AN ✔✔PERIL WHEN A PRODUCER, BROKER, OR SOLICITOR HANDLES PREMIUMS FOR AN INSURER, THEY ARE ACTING IN WHICH OF THE FOLLOWING CAPACITIES? ✔✔LEGAL REPRESENTATIVE WITH POWER OF ATTORNEY WHAT IS THE RISK CLASSIFICATION FOR THOSE WHO ARE INSURABLE BUT HAVE A HIGHER THAN AVERAGE RISK? ✔✔SUBSTANDARD THE OPTION THAT PAYS A SPECIFIED AMOUNT TO THE ANNUITANT WITH NO REMAINING VALUE PAYABLE TO A BENEFICIARY IS ✔✔LIFE ONLY MONEY BORROWED FROM A LIFE INSURANCE POLICY'S CASH VALUE IS ✔✔NOT TAXABLE AN INSURED WHO SUBMITS A FRAUDULENT CLAIM TO AN INSURER IS AN EXAMPLE OF A /AN ✔✔MORAL HAZARD SELLING WHICH OF THE FOLLOWING POLICES WOULD REQUIRE A LICENSE ISSUED BY FINRA? ✔✔VARIABLE UNIVERSAL LIFE THE TRANSFER OF A POSSIBLE FINANCIAL LOSS TO ANOTHER PARTY REFERS TO ✔✔INSURANCE THE TYPE OF WHOLE LIFE INSURANCE WHERE PREMIUMS ARE PAYABLE OVER THE WHOLE LIFE OF THE INSURED TO AGE 100 IS CALLED ✔✔ORDINARY (STRAIGHT) LIFE WHICH OF THE FOLLOWING IS NOT A RISK MANAGEMENT TECHNIQUE? ✔✔EXPOSURE SOCIAL SECURITY BENEFITS DO NOT INCLUDE ✔✔WORKERS COMPENSATION TO BE INSURABLE, A RISK MUST NOT BE ✔✔CATASTROPHIC A LIFE INSURANCE DEATH BENEFIT PAID IN A LUMP SUM TO A BENEFICIARY IS ✔✔NOT SUBJECT TO ANY TAXES TWO BUSINESS PARTNERS OWN LIFE INSURANCE ON EACH OTHER. IF ONE PARTNER DIES WHICH CONTRACT WILL ALLOW THE SURVIVING PARTNER TO USE THE DEATH BENEFIT TO PURCHASE THE DECEASED'S BUSINESS INTERESTS? ✔✔BUY-SELL AGREEMENT THE TYPE OF POLICY THAT CAN BE CHANGED FROM ONE THAT DOES NOT HAVE CASH VALUE TO ONE THAT DOES IS A ✔✔CONVERTIBLE TERM POLICY WHICH DOCUMENT DESCRIBES THE SPECIFIC FEATURES AND ELEMENTS OF A POLICY? ✔✔POLICY SUMMARY THE ATTEMPT THAT AN INSURER MAKES TO KEEP ITS EXISTING INSURANCE POLICY IN FORCE AFTER RECEIPT OF A NOTICE OF REPLACEMENT FROM ANOTHER COMPANY IS CALLED ✔✔CONSERVATION A PRIVATE AND CIVIL WRONG FOR WHICH A REMEDY MAY BE SOUGHT THROUGH LEGAL ACTION IS KNOWN AS A ✔✔TORT IF AN ANNUITANT DIES BEFORE THE ANNUITIZATION PERIOD, WHAT PROCEEDS WILL THE BENEFICIARY RECEIVE? ✔✔ACCUMULATION VALUE OR THE PREMIUMS PAID, WHICHEVER IS GREATER LIFE-ONLY AGENTS MAY TRANSACT ALL OF THE FOLLOWING TYPES OF INSURANCE EXCEPT ✔✔24-HOUR CARE COVERAGE WHICH OF THE FOLLOWING IS NOT A CHARACTERISTIC OF THE ACCELERATED BENEFIT (LIVING NEEDS) RIDER? ✔✔USUALLY REQUIRES ADDITIONAL PREMIUM IF THE CASH VALUE EXCEEDS THE PREMIUMS PAID IN A WHOLE LIFE POLICY, WHAT ARE THE TAX CONSEQUENCES IF THE POLICY IS SURRENDERED? ✔✔THE PORTION THAT EXCEEDS THE PREMIUMS PAID IS TAXABLE WHEN ONE PARTY PREPARES THE CONTRACT AND THE OTHER PARTY EITHER ACCEPTS OR REJECTS THE CONTRACT, IT IS A(N) ✔✔CONTRACT OF ADHESION WHICH OF THE FOLLOWING POLICIES COULD BE EXPECTED TO HAVE THE LOWEST PREMIUM? ✔✔STRAIGHT LIFE WHICH RIDER MAY INCREASE THE VALUE OF THE POLICY DUE TO AN INCREASE IN THE CONSUMER PRICE INDEX (CPI)? ✔✔COST OF LIVING WHEN COMPLETING AN APPLICATION FOR LIFE INSURANCE, A PRODUCER SHOULD DO WHICH OF THE FOLLOWING? ✔✔WITNESS THE APPLICANT'S SIGNATURE WHICH OF THE FOLLOWING CHARACTERIZES A SPECULATIVE RISK? ✔✔HAVING THE POSSIBILITY FOR LOSS OR GAIN WHICH POLICY PROVISION INCLUDES THE APPLICATION AND THE FIRST PREMIUM FROM THE INSURED AND THE PROMISE TO PAY FROM THE INSURER? ✔✔CONSIDERATION THE GUARANTEED INSURABILITY RIDER ALLOWS THE POLICYOWNER TO PURCHASE ADDITIONAL INSURANCE AT THE INSURED'S ✔✔ATTAINED AGE A LIFE POLICY THAT COVERS TWO LIVES AND PROVIDES FOR PAYMENT OF THE DEATH BENEFIT UPON THE DEATH OF THE FIRST INSURED IS CALLED ✔✔JOINT LIFE WHOSE SIGNATURE IS REQUIRED TO MAKE CHANGES TO A WRITTEN APPLICATION FOR A LIFE INSURANCE POLICY? ✔✔APPLICANT A PRODUCER WHO KNOWINGLY MISREPRESENTS MATERIAL INFORMATION FOR THE PURPOSE OF INDUCING A CLIENT TO LAPSE, FORFEIT, CHANGE OR SURRENDER A LIFE INSURANCE POLICY OR ANNUITY HAS COMMITTED AN ILLEGAL PRACTICE KNOWN AS ✔✔TWISTING UNDERWRITING IS THE PROCESS OF ✔✔DETERMINING THE COMPANY'S RISK REGARDING A PROPOSED INSURED AN ARRANGEMENT WHERE THE EMPLOYER AND EMPLOYEE AGREE TO PURCHASE AND FUND LIFE INSURANCE ON AN EMPLOYEE IS KNOWN AS A ✔✔SPLIT DOLLAR PLANS WHICH OF THE FOLLOWING IS TRUE ABOUT A JOINT AND SURVIVOR LIFE ANNUITY? ✔✔BENEFITS WILL STOP WHEN THE LAST ANNUITANT DIES A CONTRACT'S AGREEMENT FOR LIFE INSURANCE IS COMPOSED OF A(N) ✔✔OFFER AND ACCEPTANCE THE TERM LIMIT ON LIABILITY REFERS TO THE ✔✔DEATH BENEFIT OF A LIFE INSURANCE POLICY A POLICY THAT COMBINES WHOLE LIFE ON THE BREADWINNER AND TERM ON THE SPOUSE AND CHILDREN IS CALLED A ✔✔FAMILY POLICY WHICH NONFORFEITURE VALUES MAINTAINS THE ORIGINAL FACE VALUE OF THE CONTRACT BUT SACRIFICES THE LENGTH OF THE CONTRACT? ✔✔EXTENDED TERM WHICH METHOD OF HANDLING RISK IS SELF-INSURANCE? ✔✔RETENTION WHEN MUST INSURABLE INTEREST EXIST? ✔✔AT THE TIME OF APPLICATION [Show More]

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