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California Life, Accident, and Health
Insurance Final Exam: Questions and
Answers Latest Version Already Passed
What type of insurance provides income if the insured becomes disabled?✔✔ Disability income insurance.
What is the grace period for individual life insurance policies in California?✔✔ 30 days.
Who regulates life and health insurance in California?✔✔ The California Department of Insurance.
What does the free-look period allow a policyholder to do?✔✔ Cancel the policy for a full refund within a specified number of days.
What is the standard length of the free-look period in California?✔✔ 10 days from policy delivery.
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What is a beneficiary in a life insurance policy?✔✔ The person or entity designated to receive the policy's death benefit.
What is insurable interest?✔✔ A financial or emotional connection between the policyowner and the insured.
What does an accidental death benefit rider do?✔✔ Pays an additional amount if death results from an accident.
What is the contestability period in California life insurance policies?✔✔ Two years.
What is term life insurance?✔✔ Life insurance that provides coverage for a set period and pays a benefit only if the insured dies during that term.
What is whole life insurance?✔✔ Permanent life insurance that includes a death benefit and builds cash value over time. 2 / 4
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What is the main feature of universal life insurance?✔✔ Flexible premiums and adjustable death benefits.
What is a premium?✔✔ The amount paid by the policyholder to keep the insurance policy active.
What happens if a policy lapses?✔✔ Coverage ends due to nonpayment of premiums.
What is the purpose of a waiver of premium rider?✔✔ To waive premium payments if the insured becomes totally disabled.
What is the cash value in a life insurance policy?✔✔ The savings portion that builds over time in permanent policies.
What is a reinstatement clause?✔✔ Allows a lapsed policy to be reactivated under certain conditions. 3 / 4
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What is the difference between group and individual insurance?✔✔ Group insurance is offered to members of a group, while individual insurance is purchased by a single person.
Who pays the premium in an employer-sponsored group health plan?✔✔ It may be shared by the employer and employee.
What is an HMO (Health Maintenance Organization)?✔✔ A managed care plan that requires members to use a specific network of doctors and hospitals.
What is a PPO (Preferred Provider Organization)?✔✔ A type of health plan that allows more flexibility in choosing providers and does not require referrals.
What is coinsurance?✔✔ The percentage of covered medical costs the insured must pay after meeting the deductible.
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