California Life Practice Exams A&B (old version)

Which best describes industrial insurance?

$2000 or less in coverage and premiums collected by agent

In a seven year vesting schedule, what percentage of employer contributions is vested after seven years?

100%

In a non-contributory group policy

100% of eligible employees must participate

Which of the following statements about a resident life only agent licensing is incorrect?

A licensee has 30 days to update a change in address

And insured has a terminal illness and needs to 1/3 of his death benefit to pay mounting medical expenses. Which rider would meet the insurance current needs?

Accelerated (Living) Benefit

Which rider pays a multiple of the original face amount ?

Accidental Death Benefit

Which statement about life insurance code and ethics is not true?

Acts of fair and unfair discrimination are prohibited

According to the California insurance code, What information is the agent required to include on their business card?

All of the above

According to the code, and you person legally capable of making an insurance policy is considered

An insurer

Which of the following would not be considered a speculative risk?

Any action that could do harm to your clients well-being such as reckless driving

Bob and Neal are partners In a law firm together. If one of them were to pass away, they want to make sure that their surviving family will receive a fair value for their stake in the business. What life insurance arrangement would be most suited for transitioning the business during this time of loss?

Buy-Sell Agreement

Which of the following statements about the process of replacement is incorrect?

Copies of any written illustration or comparisons used in the process of making the replacement do not need to be included with the submitted application

In disability insurance, the period of time between when the disability started and the commencement of benefits is the

Elimination Period

And agent follows the rules and terms of his agent contract. He is exercising his _____ authority

Express

All of the following are dividend options, except

Interest only option

A beneficiary decides to take the option that will pay the largest amount per payment, knowing after death no monies Will be paid out to any descendants. The settlement option is

Life Income (Straight Life)

Rank from lowest to highest, the amount of monthly income that would result from the following annuity settlement options

Life with refund option, life with 10 years certain, straight life

Members of the MIB are required to report

Medical conditions found during underwriting

Tommy Greene has a CU certification. Which of the following names would be automatically approved for use as his agency's name?

None of these would ever be automatically approved

All of the following statements about mutual insurance companies are correct except

Policy dividends issued by a mutual company's are guaranteed and not taxable

How does the IRS classify the two different types of retirement accounts?

Qualified and nonqualified

Which qualified plan is characterized by having a non-deductible contribution and tax-free distribution ?

Roth IRA

Which is a false statement? The California insurance commissioner is

Selected by the governor as an appointee

Mrs. Anderson needs to invest the proceeds from her late husband life insurance. She invests a portion of the money into an annuity. Since she is 62, and is still working, she decides to purchase a single premium deferred annuity. She won't need an income for a few more years. What should the agent makes sure Mrs. Anderson understands?

She has a 30 day free look period in case she changes her mind

A life only agent issues a binding receipt to his client since the client did include a check for the initial premium with his completed application. Which statement is true?

The client is covered during underwriting

All of the following statements about survivorship life are true, except:

The face amount is payable after the first death

Which of the following characteristics would not stop an Insurance company from accepting an insurance risk?

The items to be insured is part of a large group of homogeneous exposure units

An employee has lost access to their group term life insurance plan, but they are allowed to convert to a new plan. Which best describes this new plan?

The new policy will be cash value. The employee pays all the premiums

After 12 years, the policyowner decides she no longer needs the large death benefit on her whole life policy. She calls you, her agent,and you tell her she can use the reduced paid-up non-forfeiture option. Which of the following is not true about the new policy?

The new policy will expire in 10 years

Any person who misappropriates fiduciary funds for personal use is guilty of

Theft

A clients flexible premium is invested into a separate account. What type of insurance product did he purchase?

Variable universal life