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CA Life Insurance Exam 3 Questions & Answers, Exams of Nursing

Valdosta State University (VSU)Nursing

A set of multiple-choice questions and answers related to ca life insurance exam 3. It covers various aspects of life insurance, including annuities, policy provisions, and tax implications. Useful for individuals preparing for the ca life insurance exam 3.

Typology: Exams

2024/2025

Available from 02/03/2025

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CA Life Insurance Exam 3 Questions &
Answers 100% pass
the insured bought an annuity ten years ago. He will retire in 5 years. To determine the
value of his annuity, he must multiply the value of the "accumulation units" he owns,
times the value of the "separate account". This type of annuity is known as a
a.fixed annuity
b.flexible annuity
c. variable annuity
d. accumulation annuity - ANSWERSc. variable annuity
why is the delivery of a life insurance policy important?
a.the policy is not in effect until it is delivered b.the grace period begins on the policy
delivery date
c. commissions are not paid unitil the policy is delivered
d.the free-look period begins on the policy delivery date - ANSWERSd.the free-look
period begins on the policy delivery date
life insurance policies written without a physical examination are called
a.non-medical
b.preferred
c.standard
d.substandar - ANSWERSda.non-medical
a policy owner has the right to change all of the following EXCEPT the
a.beneficiary
b.payment mode
c.dividend option
d.dividend schedule - ANSWERSd.dividend schedule
a life insurance policy written after 1988 that fails to meet the seve-pay test is known as
a.an endowment policy
b.a modified life policy
c.a single premium contract
d.a modified endowment contract - ANSWERSd.a modified endowment contract
which of the following information is a characteristic of non qualified annuities?
a.tax-deductible contribution
b.limits on contributions
c.mandatory participation
d.tax-deferred earnings - ANSWERSd.tax-deferred earnings
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CA Life Insurance Exam 3 Questions &

Answers 100% pass

the insured bought an annuity ten years ago. He will retire in 5 years. To determine the value of his annuity, he must multiply the value of the "accumulation units" he owns, times the value of the "separate account". This type of annuity is known as a a.fixed annuity b.flexible annuity c. variable annuity d. accumulation annuity - ANSWERSc. variable annuity why is the delivery of a life insurance policy important? a.the policy is not in effect until it is delivered b.the grace period begins on the policy delivery date c. commissions are not paid unitil the policy is delivered d.the free-look period begins on the policy delivery date - ANSWERSd.the free-look period begins on the policy delivery date life insurance policies written without a physical examination are called a.non-medical b.preferred c.standard d.substandar - ANSWERSda.non-medical a policy owner has the right to change all of the following EXCEPT the a.beneficiary b.payment mode c.dividend option d.dividend schedule - ANSWERSd.dividend schedule a life insurance policy written after 1988 that fails to meet the seve-pay test is known as a.an endowment policy b.a modified life policy c.a single premium contract d.a modified endowment contract - ANSWERSd.a modified endowment contract which of the following information is a characteristic of non qualified annuities? a.tax-deductible contribution b.limits on contributions c.mandatory participation d.tax-deferred earnings - ANSWERSd.tax-deferred earnings

individual life insurance policies sold to seniors in the state of california must include a prominently placed statement that divulges all of the following information EXCEPT a.the policy should be returned to the agent or insurer if rot wanted b.proof of surrender must be notarized at eh agent's principal office c. a charge might apply if declined after the time allowed for surrender d. the policy can be returned during a free look period for a full refund - ANSWERSb.proof of surrender must be notarized at eh agent's principal office which policy provision protects the insurer against possible adverse selection? a.nonforfeiture b.reinstatement c.suicide clause d. entire contract - ANSWERSc.suicide clause people commonly purchase an annuity to protect against the risk of a.dying too soon b.becoming insurable c. outliving their financial resources d.dying before their home mortgage is paid off - ANSWERSc. outliving their financial resources what is used to determine the amount of an annuity distribution that is exempt from taxation?a.the seven-pay test b.the exclusion ratio c. the economic benefit d. the incidental limitation - ANSWERSb.the exclusion ratio when a family policy covers children, all of the following are true EXCEPT a.the coverage is term insurance for a fixed amount b.there is no additional charge for covering new additions to the new family c.evidence of insurability is required to covered coverage for children to permanent insurance d.all children living with the family are covered even if adopt or born after the policy is issued - ANSWERSc.evidence of insurability is required to covered coverage for children to permanent insurance Which of the following would an agent be guilty of for misrepresenting the amount of dividends a policy will pay? a.felony b.a misdemeanor c. an aleatoric breach d. a fiduciary infraction - ANSWERSb.a misdemeanor all of the following information is gathered during the personal financial planning process EXCEPT

d.an unnecessary replacement - ANSWERSd.an unnecessary replacement which of the following contracts provides benefits that fluctuate automatically with investment results? a.variable life insurance b.universal life insurance c.adjustable life insurance d.continuous premium whole life insurance - ANSWERSa.variable life insurance Which type of insurance coverage has both a saving element and a flexible premium option?a.term life b.whole life c. Universal Life d. there is currently no insurance product available in the standard market which has both of these features - ANSWERSc. Universal Life What dose the statement "life insurance creates an immediate estate" mean? a.Premiums are due and payable immediately b.The total cash value is available immediately c.The total death benefit is paid whenever the insured dies d.Policy proceeds are automatically paid to the insured's estate - ANSWERSc.The total death benefit is paid whenever the insured dies A person owns a life annuity. He elects to receive his annuity payments monthly. For the remainder of his life with "10 years certain". The annuity will make payments a.for 120 months, if the insured lives that long b.for a minimum of 120 months and a maximum of the of the remainder of his life c.until his death, when the beneficiary begins receiving payments for 120 additional months d.during the "period certain" after which the payments will be reduced, but they will continue for the rest of his life - ANSWERSb.for a minimum of 120 months and a maximum of the of the remainder of his life a 10 -year certain annuity with an installment refund is purchased. The annuitant dies after receiving monthly payments for 5 years. How many remaining payments will the insurer make a.none b.60 payments c.120 payments d.one lump payment - ANSWERSb.60 payments which type of lig insurance gives an owner the right to share in the insurer's surplus? a.level term b.participating c.decreasing term d. non-participating - ANSWERSb.participating

which component of a life insurance premium is based on the insured's age and gender?a.expense b.interest c.morbidity d.mortality - ANSWERSd.mortality your clients has just bought a new home which he has financed with a $150k, 7.5% interest, 30-year bank loan. He would like to be sure that if he dies that the unpaid balance of the mortgage would be paid. He wants a policy that will cover the mortgage balance-no more, no less- anytime during the life of the mortgage. Which policy is designed to meet this need? a.level term policy b.home service policy c.increasing term policy d.decreasing term policy - ANSWERSd.decreasing term policy death benefits that are received by a beneficiary are generally a.subject to capital gains tax b.subject to federal income tax c.exempt from federal income tax d.included in the beneficiary's adjusted gross income - ANSWERSc.exempt from federal income tax what is the difference between deferred annuities and immediate annuities? a.deferred annuities cover more lives b.deferred annuities have no surrender charges c.deferred annuities have longer liquidation periods d.deferred annuities have no longer accumulation periods - ANSWERSd.deferred annuities have no longer accumulation periods Which of the following in NOT an option for the use of the policy dividends? a.paid-up additions b.reduce the current premium c.purchase a 1-year term addition d.fund the distribution of monthly income payments - ANSWERSd.fund the distribution of monthly income payments all of the following are true about term life insurance policies EXCEPT the a.insured can choose the premium payment mode b.insured must answer medical question on the application c.face amount is paid if the insured dies during the policy period d.face amount is paid if the insured survives to the end of the policy period - ANSWERSd.face amount is paid if the insured survives to the end of the policy period

a.more than on contingent beneficiary may be named b.the contingent beneficiary shares death proceeds equally with the primary beneficiary c.they receive the death proceeds if the primary beneficiary is deceased at the time of the insured's death d.they receive the remaining payments to be made under a settlement agreement upon the primary beneficiary's death - ANSWERSb.the contingent beneficiary shares death proceeds equally with the primary beneficiary what do we call the process whereby insurers decide which customers to insure and what coverage to offer? a.adverse selection b.underwriting c.ratemaking d.marketing - ANSWERSb.underwriting what is one difference between group life and individual life underwriting? a.only group life insurance gives a choice of payment plans b.group life insurance usually requires a medical examination c.only individual life insurance requires the naming of a beneficiary d.individual life insurance requires the applicant to answer medical questions - ANSWERSd.individual life insurance requires the applicant to answer medical questions how long is the free cancellation period for life insurance policies offered to individuals who are 60 or older?a.10days b.20day c.30days d.45days - ANSWERSc.30days If a life agent sells a whole life policy to a prospect on behalf of an insurer without an appointment, the a.insurer must submit a notice of appointment to the Commissioner b.agents is fined for unauthorized transaction without an appointment c.insurer is relieved of any liability because there is no appointment d.agent is automatically appointed by default of transacting insurance - ANSWERSa.insurer must submit a notice of appointment to the Commissioner which benefits are provided bey key employee insurance a.retirement compensation for long-time employees b.bonuses to employees for exceptional performance c.payment to a business when an important employee dies d.death benefits to the family of a deceased stockholder - ANSWERSc.payment to a business when an important employee dies Which policy provision allows an insured to continue coverage under a previously lapsed policy? a.the settlement provision

b.the reinstatement provision c. the nonforfeiture provision d.the incontestability provision - ANSWERSb.the reinstatement provision the life insurance grace period allows the insured to a.return the policy for a full refund of premium b.pay the premium after the due date without loss of coverage c. reinstate the policy after it has lapse for non-payment of premium d.convert a term policy to cash value policy without evidence of insurability - ANSWERSb.pay the premium after the due date without loss of coverage which type of insurance policy provides a death benefit that matches the projected outstanding debt on an individual's home? a.level term b.joint life c.family protection d.mortgage redemption - ANSWERSd.mortgage redemption the insured is totally and permanently disabled. The insured's policy continues in force without payment of further premiums because the policy contains a a.guaranteed insurability provision b.waiver of premium provision c.reinstatement provision d.grace period provision - ANSWERSb.waiver of premium provision which policy is a saving instrument designed to first accumulate funds and then systematically to liquidate the funds? a.term life b.deferred annuity c.mortgage insurance d.disability income insurance - ANSWERSb.deferred annuity a life insurance policy dividend is a.a stockholder's return on his investment in the company b.legally defined as a return of excess premium and not taxable c.interest paid to the policyowner on the cash value in force on his permanent insurance policy d.somewhat larger in a non-participating whole life policy than in a comparable participating policy - ANSWERSb.legally defined as a return of excess premium and not taxable the insured bought an annuity ten years ago. He will retire ins five years. To determine the value of his annuity, he must multiply the value of the "accumulation units" he owns, time the value of the 'separate account". This type of annuity is known as a a.fixed annuity b.flexible annuity