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Life and Health Insurance Producer Exam

Replacement (CA): practice questions

Our Life & Health Insurance bank has 8 questions on this topic. Here are 5 of them with answers; the full mock exam draws from every topic, like the real one.

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Question 1 · California

What is the minimum administrative penalty for an agent's first violation of California's replacement rules?

  1. $1,000
  2. $10
  3. $100
  4. $50,000
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A. $1,000 — Repeat or knowing violations bring $5,000 to $50,000 each.

Question 2 · California

How long does a California buyer have to return a replacement life policy for a full refund?

  1. No refund is available
  2. 60 days from delivery
  3. 10 days from delivery
  4. 30 days from delivery
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D. 30 days from delivery — The replacing insurer must give written notice of this right.

Question 3 · California

What must a California agent give the applicant when a sale involves replacing existing life insurance?

  1. A verbal warning only, given at the time the old policy is surrendered
  2. A letter from the old insurer
  3. A signed Notice Regarding Replacement, with a copy left with the applicant
  4. Nothing beyond the application
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C. A signed Notice Regarding Replacement, with a copy left with the applicant — Both the applicant and the agent sign it. The insurer also gets a list of the policies being replaced.

Question 4 · California

What does California presume if an agent's clients repeatedly buy replacement policies after saying no replacement was involved?

  1. Nothing; it's the client's choice
  2. That the insurer made an error
  3. That the clients were confused
  4. That the agent knew replacement was intended and intended to violate the law
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D. That the agent knew replacement was intended and intended to violate the law — It is a rebuttable presumption.

Question 5 · California

What must a California agent leave with the applicant in a replacement?

  1. Only the agent's business card
  2. Only the old policy
  3. Originals or copies of all printed materials used in the presentation
  4. Nothing
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C. Originals or copies of all printed materials used in the presentation — The agent also lists the policies being replaced.

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