FINAL EXAM: CALIFORNIA LIFE, ACCIDENT, AND HEALTH INSURANCE QUESTIONS WITH CORRECT ANSWERS

What distinguishes a deferred annuity from an immediate annuity? CORRECT ANSWER The time at which benefit payments start Cindy buys a 10-year certain annuity with an installment refund. After receiving monthly payments for 5 years, Cindy dies. How many remaining payments will the insurer make to her beneficiary? CORRECT ANSWER 60 payments What is a common reason people purchase an annuity? CORRECT ANSWER To protect against the risk of outliving their financial resources What kind of annuity pays income to two annuitants until their deaths? CORRECT ANSWER Joint and survivor annuity What is a joint and survivor annuity? CORRECT ANSWER Provides payments the annuity to two people. If either person dies, the same income payments continue to the survivor for life. When the surviving annuitant dies, no further payments are made to anyone. Victoria owns a life annuity and elects to receive annuity payments monthly for the remainder of her life with "ten years certain". Her annuity will make payments CORRECT ANSWER for a minimum of 120 months and a maximum of the remainder of her life Which of the following statements regarding a life insurance policy dividend is TRUE? CORRECT ANSWER It is the distribution of excess of funds accumulated by the insurer on participating policies. An insured owned by its policyholders is called a CORRECT ANSWER mutual insurer