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Quizzes > Business & Finance

Master Your California Life Insurance Practice Exam Now!

Ready to tackle California insurance exam questions? Dive into our practice test now!

Editorial: Review CompletedCreated By: Kory GloverUpdated Aug 27, 2025
Difficulty: Moderate
2-5mins
Learning OutcomesCheat Sheet
Paper art illustration for a California life insurance practice exam quiz on a sky blue background

This free California life insurance practice exam helps you get exam-ready with questions on risk, policy types, and ethics. See where you're strong, spot gaps, and review clear explanations. Pair it with the California life and health exam prep and our extra practice set to sharpen your score.

Which California license is required to sell individual life insurance policies?
Life-only agent license
Surplus lines broker license
Property broker-agent license
Personal lines broker-agent license
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In California, the free look period for an individual life insurance policy purchased by a senior citizen is
10 days
20 days
15 days
30 days
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The typical grace period for an individual life insurance policy in California is
31 days
60 days
15 days
7 days
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A life insurance policy's incontestability clause in California generally becomes effective after
1 year from policy issue, whether or not the insured is alive
3 years from policy issue, only if premiums are level
2 years from policy issue, during the insured's lifetime
2 years from policy delivery or first premium payment, whichever is later
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Which policy type provides temporary coverage for a specified period with no cash value accumulation?
Universal life insurance
Whole life insurance
Variable universal life insurance
Term life insurance
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In California, HIV testing for life insurance underwriting requires
Consent only after policy delivery
No consent if the face amount is over $500,000
Oral consent witnessed by the agent
Written informed consent
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Which of the following is true about policy loans on whole life in California?
They are taxable as ordinary income when taken
They do not accrue interest under nonforfeiture law
They reduce the death benefit if not repaid, plus any accrued interest
They forfeit the cash value immediately
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Under California replacement rules, the existing insurer's attempt to keep a policy in force is called
Coordination
Subrogation
Conservation
Twisting
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A variable life insurance policy requires the producer to hold which additional registration?
FINRA securities registration
Tax preparer registration
Mortgage loan originator license
Real estate broker license
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The contestability clause allows an insurer to rescind a life policy within the contestable period for
The insured moving to another state
Non-fraudulent error by the agent
Material misrepresentation on the application
A change in occupation after issue
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A life agent in California is required to maintain errors and omissions insurance by statute to keep the license active.
True
False
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Which nonforfeiture option uses the policy's cash value to buy term insurance for the full face amount for as long as the cash value will purchase?
Reduced paid-up
Cash surrender
Extended term
Automatic premium loan
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In California, the Notice Regarding Replacement must be signed by the applicant and the agent, and a copy must be left with the applicant at the time of application.
False
True
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Under California law, using the term guarantee fund or implying state endorsement in life insurance advertising is prohibited.
False
True
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The primary purpose of the investigative consumer report disclosure under the Fair Credit Reporting Act is to
Provide the applicant a free copy of the insurer's underwriting guidelines
Guarantee approval if no adverse findings are discovered
Inform the applicant of the right to request additional information about the nature and scope of the investigation
Allow the agent to share medical data with family members
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Under California law, an insurer may refuse to insure solely because an applicant previously traveled to a country where travel is lawful.
False
True
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When replacement is involved, the replacing insurer must ensure that the applicant receives a comprehensive comparison of benefits and costs to determine suitability.
False
True
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Misrepresenting the dividends of a participating life policy as guaranteed is considered an unfair or deceptive practice in California.
False
True
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Which statement about the California Life and Health Insurance Guarantee Association is accurate?
It guarantees all benefits in full if any admitted insurer fails
It covers only property and casualty lines
It covers certain life, annuity, and health benefits subject to statutory limits, not all amounts
Membership is voluntary for admitted life insurers
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A life insurance policy delivered in California to a senior must include a conspicuous notice on the cover page of the right to return the policy for a full refund within 30 days.
False
True
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Study Outcomes

  1. Understand Core Life Insurance Concepts -

    Grasp essential principles of life insurance policies, benefits and coverage to tackle the life insurance practice exam with confidence.

  2. Analyze California Insurance Exam Questions -

    Break down typical question formats and topics you'll encounter on the California insurance license exam practice test for efficient review.

  3. Apply Ethics and Risk Management Principles -

    Apply ethical guidelines and risk management strategies to real-world scenarios similar to those on the California insurance exam questions.

  4. Recall Licensing Rules and Regulations -

    Memorize key licensing requirements and state regulations that are frequently tested on the California life insurance exam answers.

  5. Interpret Instant Feedback and Explanations -

    Use detailed answer explanations to identify knowledge gaps and reinforce understanding of complex topics.

  6. Develop Effective Test-Taking Strategies -

    Adopt proven techniques for time management, question prioritization and stress reduction to maximize your quiz performance.

Cheat Sheet

  1. Elements of a Valid Insurance Contract -

    Master the four legal elements - offer, acceptance, consideration, and legal purpose - as outlined by the NAIC, using the mnemonic "OACL" to lock them in memory. Understanding these elements is key to tackling contract-focused questions on your life insurance practice exam. Clear knowledge of each element ensures you can spot contract pitfalls in policy scenarios.

  2. Risk Management and Insurable Risk -

    Differentiate between pure and speculative risk by focusing on the Law of Large Numbers, which states that predictions become more accurate as exposures increase. Remember the four characteristics of insurable risk - definite, accidental, calculable, and affordable - to quickly identify valid scenarios. This concept is frequently tested on the California insurance license exam practice test when assessing risk pools and underwriting decisions.

  3. Key Policy Provisions and Clauses -

    Review essential clauses - insuring clause, entire contract clause, incontestability clause, and the free look period - using the mnemonic "I, E, I, F" for quick recall. Each clause defines contractual rights and obligations that commonly appear in california insurance exam questions. Familiarity with these provisions helps you analyze policy interpretations under varied conditions.

  4. Types of Life Insurance and Cash Value Formulas -

    Compare term, whole, and universal life by memorizing that whole life offers level premiums and guaranteed cash value, while universal life features flexible premiums and adjustable benefits. Use the Cash Value Equation - Premiums Paid + Interest - Cost of Insurance = Cash Value - to solve test problems. Testing these differences in your california life insurance exam answers practice will help you determine which policy best fits a client profile.

  5. California Licensing Rules and Continuing Education -

    Study CDI requirements: 20 hours of continuing education every two years, including three hours of ethics, to maintain your license. Learn the replacement regulations, such as the required Notice Regarding Replacement form, to avoid compliance missteps. These topics often appear on the California insurance test questions and can make or break your score.

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