FInal Exam: California Life, Accident, and Health Insurance Q&A

FInal Exam: California Life, Accident, and Health Insurance Q&A 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 An insurer enters into a contract with a third party to insure itself against losses from insurance policies it issues. What is the agreement called? - CORRECT ANSWER - Reinsurance What is reinsurance? - CORRECT ANSWER - An arrangement by which an insurance company transfers a portion of a risk it has assumed to another insurer Which of the following is NOT a characteristic of reinsurance? - CORRECT ANSWER - Increases the unearned premium reserve Which of the following is a contract that involves one party which indemnifies another when a loss arises from an unknown event? - CORRECT ANSWER - Insurance policy What is an insurance policy? - CORRECT ANSWER - A contract where one party promises to indemnify another against loss that arises from an unknown event