California Insurance License Exam Practice Test
Question 1 of 5.
An agent must submit all of the following to the insurer EXCEPT a
A. statement signed by the applicant as to whether replacement of existing life insurance is involved in the transaction.
B. a signed statement as to whether or not the agent knows replacement may be involved in the transaction.
C. a copy of the signed replacement notice, if replacement is involved.
D. a copy of all printed communications used for the presentation.
Explanation: In replacement transactions, regulations require the agent to submit specific documents to the insurer: a statement from the applicant regarding replacement, a statement from the agent regarding their knowledge of replacement, and a copy of the signed replacement notice. However, there is no standard requirement to submit a copy of "all" printed sales materials used in the presentation. The focus is on the disclosure and compliance forms related to the replacement itself.
Question 2 of 5.
Which policy covering two or more individuals terminates after paying benefits only on the second death?
A. Family policy.
B. Joint life policy.
C. Survivorship life policy.
D. Limited payment whole life policy.
Explanation: A survivorship life policy, also known as a second-to-die policy, pays the death benefit only upon the death of the second insured. This contrasts with a joint life policy, which pays on the first death. A family policy typically covers multiple family members with benefits payable on any covered death. A limited payment whole life policy is for a single life and has a limited premium payment period, not related to multiple lives.
Question 3 of 5.
All of the following are requirements of a contract EXCEPT
A. the contract must have a legal purpose.
B. there must be equal consideration between the parties.
C. the parties to the contract must be legally competent.
D. there must be an offer and acceptance of the contract terms.
Explanation: Consideration in a contract requires that each party provides something of value, but the law does not require that the consideration be of equal value. The key is that there is a bargained-for exchange, not that the values are equivalent. The other options are fundamental elements of a valid contract: legality, competency, and offer and acceptance.
Question 4 of 5.
According to the California Insurance Code, the Commissioner can disapprove a licensee's request to use a fictitious name for any of the following reasons EXCEPT the
A. name is the licensee's actual name.
B. use of the name would be misleading.
C. name is too similar to a name already filed.
D. name implies that the licensee is an underwriter.
Explanation: The Commissioner can disapprove a fictitious name if it is misleading, too similar to an existing name, or implies the licensee is an insurer/underwriter. However, a licensee is generally permitted to use their own actual name without seeking approval for a fictitious name, making this the exception.
Question 5 of 5.
A husband and wife have a disabled child who is financially dependent upon them. The death of one parent would not result in financial disaster for the child, but the death of both parents would. Which policy should they purchase?
A. Juvenile policy.
B. First-to-die policy.
C. Second-to-die policy.
D. Family protection policy.
Explanation: A second-to-die policy (survivorship life) is designed to pay a benefit only upon the death of the second insured. This is ideal for situations where the financial need arises after both individuals are deceased, such as providing for a dependent child after both parents have passed away. A first-to-die policy pays on the first death, which is not the primary concern here. Juvenile and family protection policies do not specifically address this two-life dependency scenario.