Insurance Exam Questions

What is meant by referring to an insurance policy as a unilateral contract?

• Only one party makes a legally enforceable promise.

• Both parties make legally enforceable promises.

• The contract is voidable at the option of one party.

• The contract is voidable at the option of both parties.

When must insurance records of insurance agents and brokers be made available to the Insurance Commissioner?

• At all times.

• Only during business hours.

• Only upon request by the Insurance Commissioner.

• Never.

Any situation that presents the possibility of a loss is known as

• a loss exposure

• a gain exposure

• a risk exposure

• a hazard exposure

Which of the following information is not required to be communicated in a Life insurance contract?

• Personal judgment.

• Policy coverage details.

• Premium payment schedule.

• Beneficiary information.

The direct distribution of insurance utilizes all of the following to promote the sale of insurance EXCEPT

• Telephone call from an agent.

• Online advertisements.

• Direct mail.

• Telemarketing.

A contract in which one party promises to indemnify another against loss that arises from an unknown event is

• An insurance policy.

• A service contract.

• A lease agreement.

• A sales contract.

All of the occurrences listed below are examples of an insurable event as defined by the California Insurance Code EXCEPT

• An insured suffers a financial loss in the state lottery

• An insured's car is damaged in an accident.

• An insured's house is damaged in a fire.

• An insured's health is affected by a covered illness.

All of the following statements about aleatory contracts are true EXCEPT

• The insured and insurer contribute equally to the contract.

• The performance of the contract depends on an uncertain event.

• The value received by each party may not be equal.

• The contract is based on chance.

All of the following would be considered unfair trade practices EXCEPT

• Committing any act of discrimination whether it be deemed fair or unfair.

• Misrepresenting the benefits of an insurance policy.

• Using deceptive advertising to sell insurance.

• Coercing a policyholder to surrender their policy.

As authorized by the California Insurance Code, the Insurance Commissioner has provided standards for names used by life insurance agents. Under these standards which, if any, of the following are automatically acceptable for Mary Brown, a holder of the CLU designation?

• Mary Brown Insurance Services.

• Brown's Life Insurance Agency.

• Mary's Insurance Solutions.

• Brown & Associates Insurance.