XCEL Final Exam California Life
Insurance Questions & Answers
A savings vehicle designed to first accumulate funds and then systematically liquidates
the funds is called a(n) - ANSWERSDeferred Annuity
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? - ANSWERS60 Payments
What distinguishes a deferred annuity from an immediate annuity? - ANSWERSThe
time at which benefit payments start
The systematic liquidation of a sum of money is provided by a(n) - ANSWERSAnnuity
What kind of annuity pays income to two annuitants until their deaths? -
ANSWERSJoint And Survivor Annuity
Which of the following is NOT a feature of equity-indexed annuities? - ANSWERSOffers
a maximum interest rate that increases annually
An annuitant would like to determine the amount of an annuity distribution that is
exempt from taxation. What is used to calculate this? - ANSWERSExclusion Ratio
An annuity which is backed by a life insurer's separate account is called a(n) -
ANSWERSVariable Annuity
Which of the following is a contract that involves one party which indemnifies another
when a loss arises from an unknown event? - ANSWERSInsurance Policy
Which of the following is NOT a benefit of insurance? - ANSWERSLosses due to fraud
are eliminated
What is a participating life insurance policy? - ANSWERSContract that allows the
policyowner to receive a share of surplus in the form of policy dividends
Which of the following is an insurer established by a parent company for the purpose of
insuring the parent company's loss exposures? - ANSWERSCaptive Insurer
Which of the following is NOT a characteristic of reinsurance? - ANSWERSIncreases
the unearned premium reserve
Which of the following is a type of insurance where an insurer transfers loss exposures
from policies written for its insureds? - ANSWERSReinsurance
, An insurer owned by its policyholders is called a - ANSWERSMutual Insurer
Which of the following contracts is defined as "one that restores an injured party to the
condition that was present before the loss"? - ANSWERSIndemnity Contract
If a material warranty violation on the part of the insured is found, what recourse does
an insurer have? - ANSWERSRescind The Policy
Restoring an insured to the same condition as before a loss is an example of the
principle of - ANSWERSIndemnity
Reasonably necessary acts that an agent must perform for carrying out his/her
expressly authorized duties are covered by an agent's - ANSWERSImplied Authority
Which principle is accurately described with the statement "Insureds are entitled to
recover an amount NOT greater than the amount of their loss"? - ANSWERSIndemnity
Which statement is CORRECT when describing a contract of adhesion? -
ANSWERSContract may be accepted or rejected by the insured
Express power given to an agent in an agency agreement is - ANSWERSThe authority
to represent the insurer
What is the price of insurance for each exposure unit? - ANSWERSRate
A creditor would be allowed rights to life insurance policy proceeds if which of the
following beneficiaries is chosen? - ANSWERSThe Insured's Estate
A spendthrift clause in a life insurance policy - ANSWERSRestricts the ability of the
beneficiary to assign benefits
Which of the following is NOT an insurer policy expense? - ANSWERSPremiums
Pam is the primary beneficiary of a life insurance policy and wants to let the death
benefit accumulate and receive only the monthly investment proceeds. Which
settlement option should she choose? - ANSWERSInterest Option
Premiums are best described as - ANSWERSThe amount an insured pays per unit of
coverage
How are death benefits that are received by a beneficiary normally treated for tax
purposes? - ANSWERSExempt from federal income taxes
When calculating life insurance premium rates, which component is affected by an
insured's age and gender? - ANSWERSMortality
Insurance Questions & Answers
A savings vehicle designed to first accumulate funds and then systematically liquidates
the funds is called a(n) - ANSWERSDeferred Annuity
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? - ANSWERS60 Payments
What distinguishes a deferred annuity from an immediate annuity? - ANSWERSThe
time at which benefit payments start
The systematic liquidation of a sum of money is provided by a(n) - ANSWERSAnnuity
What kind of annuity pays income to two annuitants until their deaths? -
ANSWERSJoint And Survivor Annuity
Which of the following is NOT a feature of equity-indexed annuities? - ANSWERSOffers
a maximum interest rate that increases annually
An annuitant would like to determine the amount of an annuity distribution that is
exempt from taxation. What is used to calculate this? - ANSWERSExclusion Ratio
An annuity which is backed by a life insurer's separate account is called a(n) -
ANSWERSVariable Annuity
Which of the following is a contract that involves one party which indemnifies another
when a loss arises from an unknown event? - ANSWERSInsurance Policy
Which of the following is NOT a benefit of insurance? - ANSWERSLosses due to fraud
are eliminated
What is a participating life insurance policy? - ANSWERSContract that allows the
policyowner to receive a share of surplus in the form of policy dividends
Which of the following is an insurer established by a parent company for the purpose of
insuring the parent company's loss exposures? - ANSWERSCaptive Insurer
Which of the following is NOT a characteristic of reinsurance? - ANSWERSIncreases
the unearned premium reserve
Which of the following is a type of insurance where an insurer transfers loss exposures
from policies written for its insureds? - ANSWERSReinsurance
, An insurer owned by its policyholders is called a - ANSWERSMutual Insurer
Which of the following contracts is defined as "one that restores an injured party to the
condition that was present before the loss"? - ANSWERSIndemnity Contract
If a material warranty violation on the part of the insured is found, what recourse does
an insurer have? - ANSWERSRescind The Policy
Restoring an insured to the same condition as before a loss is an example of the
principle of - ANSWERSIndemnity
Reasonably necessary acts that an agent must perform for carrying out his/her
expressly authorized duties are covered by an agent's - ANSWERSImplied Authority
Which principle is accurately described with the statement "Insureds are entitled to
recover an amount NOT greater than the amount of their loss"? - ANSWERSIndemnity
Which statement is CORRECT when describing a contract of adhesion? -
ANSWERSContract may be accepted or rejected by the insured
Express power given to an agent in an agency agreement is - ANSWERSThe authority
to represent the insurer
What is the price of insurance for each exposure unit? - ANSWERSRate
A creditor would be allowed rights to life insurance policy proceeds if which of the
following beneficiaries is chosen? - ANSWERSThe Insured's Estate
A spendthrift clause in a life insurance policy - ANSWERSRestricts the ability of the
beneficiary to assign benefits
Which of the following is NOT an insurer policy expense? - ANSWERSPremiums
Pam is the primary beneficiary of a life insurance policy and wants to let the death
benefit accumulate and receive only the monthly investment proceeds. Which
settlement option should she choose? - ANSWERSInterest Option
Premiums are best described as - ANSWERSThe amount an insured pays per unit of
coverage
How are death benefits that are received by a beneficiary normally treated for tax
purposes? - ANSWERSExempt from federal income taxes
When calculating life insurance premium rates, which component is affected by an
insured's age and gender? - ANSWERSMortality
