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CALIFORNIA LIFE,HEALTH,ACCIDENT
INSURANCE FINAL EXAM 2025/2026 LATEST
QUESTIONS AND ANSWERS GRADED A+
Which of the following statements correctly describes a contract of indemnity?
One party is restored to the same financial position the part was in before the loss occurred
Under a noncancellable health insurance policy, an insurer can
Cancel the policy for nonpayment of premium
What does ESOP stand for?
Employee Stock Ownership Plan
What does the term "illustration" mean when used in the phrase "life insurance policy illustration" , according to the California Insurance Code
Presentation of policy features that includes non-guaranteed elements
Life insurance creates an immediate estate. This phrase means
when the insured dies, a death benefit is paid; Life insurance creates an immediate estate by paying a death benefit whenever the insured dies.
When handling premiums for an insured, an agent is acting in which capacity?
Fiduciary
An agent acting as an insurance agent, broker, solicitor, life agent, or bail agent acts in fiduciary capacity when handling premiums or return premiums
Health insurance policies typically contain a provision stating that insureds and their insurer will share covered losses in an agreed proportion. Which provision does this refer to?
Coinsurance is a sharing of expenses by the insured and the insurer. Once the insured satisfies the deductible, the insurance company pays a high percentage of the additional expenses (usually 75% or 80%) and the insured pays the remainder.
Kimberly is an employee on leave under the Family and Medical Leave Act (FMLA). What will happen to her group health coverage?
She continues to be enrolled during the leave; FMLA requires the same group health insurance benefits that would exist if the employee were not on leave.
an offer and acceptance of the contract terms
When selling a long term care insurance rider to an applicant, a life agent must take into consideration all of these factors. EXCEPT
Attending physician's statement
correct answer- ability to pay, needs of the client, goals of the client
What is the proper order of initial life insurance premiums, from lowest to highest ?
Modified premium, ordinary life, single premium
What does the insurance term "indemnity " refer to?
"Make whole"
Contracts of indemnity attempt to return the
insured to their original financial position, or "made whole".
The probability of death, listed by year, is demonstrated in
"Mortality tables".
Mortality tables give a measure of the number of deaths in a given population over a certain period of time.
Which type of health insurance policy cannot be canceled by the insurer nor increase the premiums?
Noncancellable
A noncancellable policy cannot be cancelled nor can its premium rates be increased under any circumstances.
What must an applicant do in order to authorize the release of an attending physician report?
sign a consent form
An employee for XYZ Corp is injured on the job. Where does coverage for the employee's injuries come from?
Workers' Compensation; In this situation, coverage for the employee's injuries comes from XYZ's Workers' Compensation.
Which of these statements is NOT true concerning recurrent disabilities?
The insurer continues coverage after a new elimination period
Minimum participation standards exist for group health insurance plans in order to
prevent adverse selection
Which of the following is NOT a common life insurance policy rider?
Extended term
Which entity has jurisdiction over health care coverage providers?
Department of Insurance
The Consolidated Omnibus Budget Reconciliation Act (COBRA) applies to employers who employ at least
20 employees
Which of the following does NOT have to be included on life insurance policy illustrations?
Statement that all values and benefits are guaranteed
According to PPACA, how long can an adult be covered as a dependent under their parents ' insurance plan?
Up to age 26
Which of the following is NOT protected under the California Life and Health Guarantee Association?
Insurers
Which of the following would be considered an activity of daily living under a long term care policy?
bathing
An applicant has revealed conditions that require more information. Which of the following is needed next?
Attending Physician's Statement
admitted; The term for an insurer which has met the conditions required to transact business in the State of California
Lynn owns a life policy that guarantees the right to renew the policy each year, regardless of health, but at an increased premium. What kind of policy is this?
Renewable term
Which of the following risk classifications charges the highest premium?
substandard
During the underwriting process for a group health policy, it was discovered that 15 out of 50 members of the group have major health issuesHow would the insurer handle this?
Accept or reject the whole group
The "blackout period" affects whose benefits?
surviving spouse
Which of the following refers to a condition that may increase the chance of a loss?
hazard
Premiums are best described as
the amount an insured pays per unit of coverage
Which of these statements correctly describes risk?
Pure risk is the only insurable risk
What kind of annuity pays income to two annuitants until their deaths?
Joint and survivor annuity
What prevents a life insurance policy from being rescinded by the insurer after being in force for two years?
Incontestability clause
Insurance agents and brokers must make their insurance records available to the Commissioner
At all times
After the annual deductible is met, a Medicare Part B patient will pay of the remaining covered expenses.
20%
Which of the following does the California Insurance Code NOT require an insurance policy to specify?
Insurer's financial rating
What does the term coinsurance refer to?
After the deductible is satisfied, the percentage paid by the insured for the remaining covered expenses
An eligible individual who would like to obtain group health insurance without providing evidence of insurability must
Enroll within a specified eligibility period
Which of the following best describes the statement The more times event is repeated, the more predictable the outcome becomes?
law of large numbers
At age 65, which of the following is available at no cost to all individuals?
Medicare Part A
In a renewable term life insurance policythe contract will usually
Require a higher premium payable at each renewal
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?
grace period
According to Social Securityan individual with 6 credits of coverage during the previous 13-quarter period is considered to be:
Currently insured
A life insurance policy that pays the face amount if the insured survives to a specified period of time is called
endowment insurance
John owns an insurance policy that gives him the right to share in the insurer's surplus. What kind of policy is this?
participating
Which of the following is NOT considered to be a definition of the term loss
the probability that an event will occur
Jerry is an insured who understated his age on his life insurance application, paying $12 per $1,000 of insurance instead of $15 per $ 1,000 If he dies, how will the adjusted death benefit be calculated?
12/15th of the policy face amount
AAA Insurance Company has transferred a portion of its loss exposure to BBB Insurance Company. In this reinsurance transaction, what is AAA Insurance Company called?
primary insurer
Which of the following are two examples of activities of daily living (ADL's) used in qualifying for long-term care benefits?
Eating and dressing
Which of the following describes the number of deaths in a year compared to the number of people in a select group?
mortality rate
Dyan is considered partially disabled by her insurance company. Which of the following BEST describes her situation?
She is working part-time and receiving lost income under her long-term disability benefit
Who is NOT eligible for Social Security survivor benefits?
A deceased worker's dependent parents of any age
What distinguishes a deferred annuity from an immediate annuity
The time at which benefit payments start
An agent's attempt to stop the replacement of an existing life insurance policy is known as
conservation
Tom is shopping for a policy that covers two people and would pay the face amount ONLY when the first person dies. The type of life policy he is looking for is called a
Joint Life Policy
Which of the following is a situation where there is a possibility of either a loss or a gain?
Speculative risk
Why is a life insurance policy's delivery date important?
The free-look period begins on the policy delivery date
The California Insurance Code gives an individual between 10 and 30 days to return a life policy for cancellation. This free-look period begins on the policy delivery date.
When an insurance company requests an attending physician's report, the request must be accompanied by a
copy of the signed authorization
The conditions, times, and circumstances under which an insured is NOT covered by a health policy are called?
Exclusions
Key person insurance is intended to
cover business losses due to the death of a key employee
Which of the following is NOT a requirement for a terminated employee that has exercised the conversion privilege?
Provide proof of insurability
Which of the following does Medicare Part A NOT provide coverage for?
Doctor's services
Which of the following healthcare providers provides both the healthcare services and healthcare coverage?
Health Maintenance Organization (HMO)
