Study notes
Every lesson for the California Life Agent exam, free to read. Open one as cards to check yourself as you go.
I.A
Basic Insurance Concepts and Principles
What insurance is, and who's who in a policy
Pure risk vs. speculative risk
Hazard → peril → risk → loss
Five ways to manage risk: STARR
Six requisites of an insurable risk
Adverse selection vs. the law of large numbers
I.B
Contract Law
Four elements of a valid contract
Five special features of an insurance contract
Indemnity, utmost good faith and concealment
Representations, warranties, waiver and estoppel
I.C
The Insurance Marketplace
Types of insurers
Five distribution systems
An agent's three types of authority, and fiduciary duty
Getting licensed in California: education, exam, denial
Who is who: agent, broker, life licensee, analyst, solicitor
Keeping your license: term, renewal, CE and reporting
California penalties you should memorize
Unfair trade practices: what an agent must never do
Federal rules: FCRA and the Section 1033 prohibited-person rule
Twisting vs. churning (and other §790.03 practices)
Anti-money laundering (USA PATRIOT Act) for insurance
Numbers cheat sheet: licensing, CE and training
Mnemonics, part 3: regulation and tax numbers (corrected)
II.A
Life Insurance – Basics
Insurable interest
Five personal uses of life insurance: SECLE
How much coverage? Human life value vs. the needs approach (DIME)
Four business uses of life insurance: BKEC
Business and special-purpose uses: split dollar, deferred compensation, pre-need, modified premium
Mnemonics, part 1: risk, needs, roles and authority
II.B
Types of Life Policies
Four ways to classify a life policy
Term life: the essentials
Three kinds of term: level, decreasing, increasing
Whole life: the core features
Four ways to pay for whole life
Adjustable life and universal life
UL death benefit options A and B
Joint life vs. survivorship life
Insuring children: California rules and juvenile policies
II.C
Annuities
Annuity basics: the cure for living too long
Immediate vs. deferred annuities
Surrender charges and the annuity death benefit
Annuity payout options
Fixed vs. indexed annuities
Qualified vs. nonqualified annuities
Traditional IRA: the rules that matter
Roth IRA, rollovers and trustee-to-trustee transfers
Qualified retirement plans: core features
Common retirement plans at a glance (2026 limits)
Annuity suitability and best interest in California
II.D
Life Insurance and Annuities – Policy Replacement / Cancellation
Seniors in California: the 30-day free look and other protections
Replacement: the California step-by-step
Numbers cheat sheet: free look, replacement and record keeping
II.E
The Individual Life Insurance Contract
Viatical and life settlements
Field underwriting and the two kinds of receipts
Required provisions, part 1: ownership, entire contract, free look, grace period
Required provisions, part 2: reinstatement, incontestability, misstatement, exclusions
Beneficiaries: per stirpes vs. per capita
Revocable vs. irrevocable beneficiaries, and the common disaster clause
Settlement options: how the death benefit is paid
Nonforfeiture options
Five dividend options
STOLI vs. a legitimate life settlement
Buyer's Guide, cost indexes and policy summaries
Mnemonics, part 2: settlement, nonforfeiture and dividend options
II.F
Taxation of Life Insurance and Annuities
Taxation of life insurance: five core rules
Modified endowment contracts (MEC) and the 7-pay test
Section 1035 exchanges: which way is allowed
II.G
Group Life Insurance Plans – Life
Group life insurance: the essentials
II.H
Social Security Disability Program
Social Security in four parts: RMDS
II.I
Individual Underwriting, Pricing, and Claims
What drives the premium, and the premium formula
Home-office underwriting and risk classes
III
Life Policy Riders
Common riders
Accelerated death benefits vs. long-term care: training rules
Exam prep classes
Life and real estate license exam prep with experienced instructors.
Learn more ›