17 Free California Life & Health Practice Questions: California Statutes for Life & Health (2026)
How to Use This Set
California-specific law is not a section of its own on the Life or the Accident and Health objectives. The Insurance Code and ethics items are tagged inside both sets of objectives, which is why generic study material tends to under-prepare candidates for them.
This set pulls the Code items together by section: free look (§10127.9 and §10127.10), replacement (§10509.4 and §10509.8), twisting (§781), the senior duty of care (§785), fiduciary duty (§1733-1735), the 12-hour ethics course (§1749), continuing education (§1749.33), the SB 263 training (§1749.81), long-term care training and the exam retake cap (§1682).
Work through the questions, open each answer only after you have committed to one, and read the explanation even when you were right. Part of the learning is seeing why the wrong options are wrong.
Practice Questions 1-6: Free Look, Ethics Course, Twisting and Replacement
The rules that govern what you hand a consumer and when they can walk away.
Question 1 (Chapter 8)
A 62-year-old client purchases a variable annuity and requests a 30-day free look period. Under California Insurance Code §10127.10, how must the insurer handle the premium during this period?
- A) The premium must be invested in the sub-accounts selected by the client immediately.
- B) The premium must be held in a non-interest-bearing escrow account until the free look expires.
- C) The insurer may invest the premium at its discretion to maximize potential returns for the client.
- D) The premium must be held in a fixed account or money-market account unless the owner directs otherwise.
Show answer & explanation
Answer: D
Section 10127.10 requires that for owners age 60 or older, premiums for variable products must be held in fixed or money-market accounts during the free look period to protect against market volatility, unless the owner specifically directs otherwise.
Question 2 (Chapter 8)
An agent is applying for a life agent license. Which of the following is true regarding the 12-hour ethics and Insurance Code course?
- A) It must be completed to sit for the state exam.
- B) It is only required for agents who fail the exam on their first attempt.
- C) It is valid for 10 years from the date of completion.
- D) It must be completed before the license is issued.
Show answer & explanation
Answer: D
Per §1749(a)(1), the 12-hour ethics and Insurance Code course is a pre-licensing requirement that must be completed before the license is issued, but it is not a prerequisite to sit for the exam.
Question 3 (Chapter 8)
An agent is found guilty of 'twisting.' What is the definition of this prohibited practice?
- A) Charging a higher premium than what is filed with the Commissioner.
- B) Collecting a premium for a policy without having been appointed by the insurer.
- C) Making misleading representations to induce a policyholder to lapse or surrender an existing policy.
- D) Failing to disclose the agent's license number on a business card.
Show answer & explanation
Answer: C
Twisting (§781) specifically refers to the use of misrepresentation or misleading comparisons to induce a policyholder to terminate an existing policy in favor of a new one.
Question 4 (Chapter 8)
An agent is helping a client replace a life insurance policy. Which document must be left with the applicant during this process?
- A) A 'Notice Regarding Replacement' form.
- B) A copy of the agent's appointment letter.
- C) A list of all other insurance companies the agent represents.
- D) A summary of the agent's commission structure.
Show answer & explanation
Answer: A
Under §10509.4, the agent must provide a 'Notice Regarding Replacement' to the applicant and obtain a signed statement acknowledging the replacement.
Question 5 (Chapter 8)
A 55-year-old client buys a life insurance policy. How long is the free look period under §10127.9?
- A) 10 to 30 days, as specified in the policy.
- B) Exactly 30 days.
- C) At least 30 days.
- D) 10 days only.
Show answer & explanation
Answer: A
For individuals under age 60, §10127.9 mandates a free look period of 10 to 30 days, with the specific duration determined by the policy contract.
Question 6 (Chapter 8)
An agent is required to maintain records of all insurance transactions. How long must these records generally be kept?
- A) 2 years.
- B) 10 years.
- C) Until the policy expires.
- D) 5 years.
Show answer & explanation
Answer: D
While specific statutes vary, the general requirement for maintaining records of insurance transactions in California is 5 years.
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Practice Questions 7-12: Training Mandates, Fiduciary Duty, Suitability and CE
What an agent must complete and how client money must be handled.
Question 7 (Chapter 8)
An agent licensed on or after January 1, 2024, wants to sell non-term life insurance. What training is required under §1749.81?
- A) 8 hours annually.
- B) 2 hours per renewal.
- C) 4 hours one-time training.
- D) No training is required for life insurance.
Show answer & explanation
Answer: C
SB 263 requires agents licensed on or after 2024-01-01 to complete a one-time 4-hour training course before selling non-term life insurance products.
Question 8 (Chapter 8)
If an agent is acting as a fiduciary, what does this mean regarding the handling of client premiums?
- A) Premiums can be used for business expenses as long as they are repaid within 30 days.
- B) Premiums belong to the agent until the policy is issued.
- C) Premiums must be kept in a separate trust account and not commingled with personal funds.
- D) The agent is not responsible for premiums once they are received.
Show answer & explanation
Answer: C
Agents are fiduciaries (§1733-1735) and must hold client funds in a trust capacity. Commingling premiums with personal or business operating funds is a serious disciplinary offense.
Question 9 (Chapter 8)
A senior (age 65+) is being sold an annuity. The agent fails to collect suitability information. What is the status of this action?
- A) It is acceptable if the senior signs a waiver.
- B) It is only a violation if the annuity is a variable product.
- C) It is standard practice for high-net-worth seniors.
- D) It is a violation of the annuity suitability requirements under §10509.910.
Show answer & explanation
Answer: D
Agents are required to collect and evaluate suitability information before making an annuity recommendation to any consumer, especially seniors, to ensure the product meets their financial needs.
Question 10 (Chapter 8)
A life agent is preparing to renew their license. They have completed 24 hours of CE, but none of the hours were in ethics. Can the Commissioner renew the license under §1749.33?
- A) Yes, as long as the total 24 hours were completed.
- B) Yes, but they must pay a penalty fee for the missing ethics hours.
- C) No, the 24 hours must include at least 3 hours of ethics training.
- D) No, ethics training must be completed at the time of initial licensing only.
Show answer & explanation
Answer: C
Under §1749.33, the 24 hours of continuing education required for license renewal must include at least 3 hours of approved ethics training.
Question 11 (Chapter 8)
An agent is selling a life insurance policy to a 55-year-old. The policy document states a 15-day free look period. Is this compliant with §10127.9?
- A) No, it must be exactly 30 days.
- B) No, it must be exactly 10 days.
- C) Yes, the period must be between 10 and 30 days.
- D) Yes, but only if the client is under 50.
Show answer & explanation
Answer: C
For owners under 60, §10127.9 requires a free look period of between 10 and 30 days. A 15-day period falls within this range.
Question 12 (Chapter 8)
An agent is looking to renew their license for the first time. They completed their 12-hour ethics course 4 years ago. Is this sufficient for the current renewal?
- A) Yes, the ethics course is a one-time requirement.
- B) Yes, as long as they have 24 hours of total CE.
- C) No, they must retake the 12-hour course every 2 years.
- D) No, the certificate for the 12-hour ethics course is only valid for 3 years.
Show answer & explanation
Answer: D
Under §1749(c), the certificate of completion for the 12-hour pre-licensing ethics and Insurance Code course is valid for 3 years.
Practice Questions 13-17: SB 263, Exam Limits, License Status and Senior Protections
Training for newer agents, the exam retake cap, what an inactive license allows, and the duty owed to seniors.
Question 13 (Chapter 8)
An agent is selling a variable life insurance policy. Under SB 263 (§1749.81), what is the training requirement for an agent licensed after January 1, 2024?
- A) 8 hours of one-time training.
- B) 4 hours of one-time training for non-term life, plus 2 hours of variable life training before each renewal.
- C) 24 hours of training every two years.
- D) No specific training is required beyond the basic license.
Show answer & explanation
Answer: B
Under §1749.81, agents licensed on or after 2024-01-01 must complete 4 hours of one-time training for non-term life and 2 hours of variable life training before each renewal.
Question 14 (Chapter 8)
What is the maximum number of times an applicant can fail the same type of insurance exam within a 12-month period before being barred from taking it for another 12 months?
- A) 5 times.
- B) 8 times.
- C) 10 times.
- D) Unlimited, as long as they pay the fee.
Show answer & explanation
Answer: C
Under §1682, an applicant is limited to 10 attempts of the same exam type per 12-month period. After the 10th failure, they are barred for 12 months.
Question 15 (Chapter 8)
An agent's license is currently 'inactive.' Which of the following is true regarding their ability to transact insurance?
- A) They can transact as long as they have an appointment.
- B) They can transact only for existing clients.
- C) They cannot transact insurance while the license is inactive.
- D) They can transact if they pay a late fee.
Show answer & explanation
Answer: C
An inactive license means the holder is not authorized to transact insurance business until the license is returned to active status.
Question 16 (Chapter 8)
A life agent is selling a policy to a 65-year-old. The agent uses a high-pressure sales tactic. This violates the duty of care for seniors. Which code section governs this?
- A) §10127.9
- B) §785
- C) §1749.8
- D) §1631
Show answer & explanation
Answer: B
Section 785 specifically outlines the duty of honesty, good faith, and fair dealing for agents dealing with senior citizens (age 65+).
Question 17 (Chapter 8)
An agent is selling a long-term care (LTC) policy. They have completed 8 hours of LTC training in the first year. What is the requirement for the second year?
- A) No further training is required.
- B) 8 hours of LTC training.
- C) 4 hours of LTC training.
- D) 2 hours of LTC training.
Show answer & explanation
Answer: B
Under §10234.93(a)(4), an agent must complete 8 hours of LTC training in each of the first four 12-month periods, then 8 hours per renewal.
The Mistakes That Cost Marks
Mixing up the free look figures. Under §10127.9, individual life and annuity policies carry a 10 to 30 day free look. Under §10127.10, for owners age 60 and over it is not less than 30 days.
Putting the ethics course before the exam. The 12-hour course is required before the license is issued, not before you sit the exam. The certificate is valid for three years.
Forgetting the CE breakdown. Renewal takes 24 hours of CE per two-year term, and it includes 3 hours of ethics (§1749.33).
Confusing the training mandates. Agents licensed on or after January 1, 2024 complete a one-time 4-hour course before selling non-term life, and 2 hours of variable life training before each renewal (§1749.81). Annuity and LTC training are separate.
Treating twisting, diversion and replacement as the same thing. Twisting is misrepresentation to induce a switch (§781). Diversion of premium is a fiduciary breach (§1733-1735). Replacement has its own notice and signed statement (§10509.4).
Getting the retake cap wrong. Section 1682 allows 10 attempts of the same exam type in 12 months, with a 12-month bar after the 10th failure.
Your Next Step
Score yourself honestly: how many of the 17 did you get right before opening the answer? Re-do any you missed tomorrow, not today. A question you can answer cold after a day is one you can answer in the exam.
For the other topic sets, see the California Life & Health practice question hub. To hear this material as audio and keep going with the rest of the course, start the free preview.
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