L&HCaliforniaeasy
Under the California Insurance Code, how is 'life insurance' formally defined?
A contract whereby one party agrees to pay a sum or income upon the death of the insured life
BAny contract that pays a fixed lump sum upon any cause of death of the insured, whether natural, accidental, or self-inflicted
CA contract that indemnifies the insured against loss of earned income resulting from sickness or bodily disablement
DA contract issued exclusively by a fraternal benefit society to its lodge members under a representative form of government
Why this is the answer
California Insurance Code § 101 defines life insurance broadly to include insurance upon the lives of persons or appertaining thereto, and the granting, purchasing, or disposing of annuities. The defining trigger is death of the insured life (or, for annuities, survival/longevity). Choice (b) overstates by saying 'any cause' without the death-of-the-insured-life element; choice (c) describes disability insurance under § 106; choice (d) confuses life insurance with fraternal benefits.
Studying for the California Life & Health exam?
This question comes from our L&H bank. Take a free practice test — no signup.