©SOPHIABENNETT@2024-2025 Monday, August 26, 2024 6:09 AM
XCEL Solutions Life and Health License Exam
(CA) Practice Questions and Answers
A saving vehicle designed to first accumulate funds and then
systematically liquidates the funds - Answer✔️✔️-Deferred annuity
An annuity which is backed by a life insurer's separate account -
Answer✔️✔️-Variable 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? - Answer✔️✔️-60
payments
An annuitant would like to determine the current value of her annuity. To
do this, she multiplies the number of "accumulation units" she owns times
the unit value of the "separate account". What kind of annuity BEST
matches this description? - Answer✔️✔️-Variable Annuity
An annuitant would like to determine the amount of an annuity
distribution that is exempt from taxation. What is used to calculate this? -
Answer✔️✔️-Exclusion Ratio
What is a common reason people purchase an annuity? - Answer✔️✔️-To
protect against the risk of outliving their financial resources
1
, ©SOPHIABENNETT@2024-2025 Monday, August 26, 2024 6:09 AM
Which of the following is NOT a feature of equity annuities? - Answer✔️✔️-
Offers a maximum interest rate that increases annually
When a mutual insurer becomes a stock company, the process is called -
Answer✔️✔️-Demutualization
An insurer owned by its policyholder is called a - Answer✔️✔️-Mutual
insurer
Which of the following statements regarding a life insurance policy
dividend is TRUE? - Answer✔️✔️-It is the distribution of excess of funds
accumulated by the insurer on participating policies
Which of the following is a type of insurance where an insurer transfers
loss exposure from policies written for its insureds? - Answer✔️✔️-
Reinsurance
AAA Insurance Company has transferred a portion of its loss exposure to
BBB Insurance Company. In this reinsurance transaction, what is AAA
Insurance Company called? - Answer✔️✔️-Primary Insurer
John owns an insurance policy that gives him the right to share in the
insurer's surplus. What kind of policy is this? - Answer✔️✔️-Participating
Kim is insured under a disability income insurance policy with an "own-
occupation" clause. She was recently injured in an automobile accident and
can no longer perform the task of her job. Kim is no considered to be -
Answer✔️✔️-totally disabled
2
, ©SOPHIABENNETT@2024-2025 Monday, August 26, 2024 6:09 AM
What are residual disability income insurance payments based on? -
Answer✔️✔️-The amount of the insured's income is reduced by the
disability
Dyan is considered partially disabled by her insurance company. Which of
the following BEST describes her situation? - Answer✔️✔️-She is working
part-time and receiving lost income under her long-term disability benefit
Under a disability income insurance policy, which criteria must be met for
"bodily injury" tp be classified as accidental? - Answer✔️✔️-The cause may
be intentional, but the result must be accidental
The elimination period in a disability income policy serves the same
purpose - Answer✔️✔️-a deductible
Which of the following is NOT a provision in a disability income policy -
Answer✔️✔️-Deductible and coinsurance provision
Allen has a disability income policy with a $2,500 monthly benefit and a 30-
day elimination period. He is unable to work 90 days following an
automobile accident. What will the policy pay? - Answer✔️✔️-$5,000 (90
days - 30 days = 60 days or 2 months) 2 months x $2,500
The problem of overinsurance is addressed in which health insurance
provision - Answer✔️✔️-Coordination of benefits
3
XCEL Solutions Life and Health License Exam
(CA) Practice Questions and Answers
A saving vehicle designed to first accumulate funds and then
systematically liquidates the funds - Answer✔️✔️-Deferred annuity
An annuity which is backed by a life insurer's separate account -
Answer✔️✔️-Variable 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? - Answer✔️✔️-60
payments
An annuitant would like to determine the current value of her annuity. To
do this, she multiplies the number of "accumulation units" she owns times
the unit value of the "separate account". What kind of annuity BEST
matches this description? - Answer✔️✔️-Variable Annuity
An annuitant would like to determine the amount of an annuity
distribution that is exempt from taxation. What is used to calculate this? -
Answer✔️✔️-Exclusion Ratio
What is a common reason people purchase an annuity? - Answer✔️✔️-To
protect against the risk of outliving their financial resources
1
, ©SOPHIABENNETT@2024-2025 Monday, August 26, 2024 6:09 AM
Which of the following is NOT a feature of equity annuities? - Answer✔️✔️-
Offers a maximum interest rate that increases annually
When a mutual insurer becomes a stock company, the process is called -
Answer✔️✔️-Demutualization
An insurer owned by its policyholder is called a - Answer✔️✔️-Mutual
insurer
Which of the following statements regarding a life insurance policy
dividend is TRUE? - Answer✔️✔️-It is the distribution of excess of funds
accumulated by the insurer on participating policies
Which of the following is a type of insurance where an insurer transfers
loss exposure from policies written for its insureds? - Answer✔️✔️-
Reinsurance
AAA Insurance Company has transferred a portion of its loss exposure to
BBB Insurance Company. In this reinsurance transaction, what is AAA
Insurance Company called? - Answer✔️✔️-Primary Insurer
John owns an insurance policy that gives him the right to share in the
insurer's surplus. What kind of policy is this? - Answer✔️✔️-Participating
Kim is insured under a disability income insurance policy with an "own-
occupation" clause. She was recently injured in an automobile accident and
can no longer perform the task of her job. Kim is no considered to be -
Answer✔️✔️-totally disabled
2
, ©SOPHIABENNETT@2024-2025 Monday, August 26, 2024 6:09 AM
What are residual disability income insurance payments based on? -
Answer✔️✔️-The amount of the insured's income is reduced by the
disability
Dyan is considered partially disabled by her insurance company. Which of
the following BEST describes her situation? - Answer✔️✔️-She is working
part-time and receiving lost income under her long-term disability benefit
Under a disability income insurance policy, which criteria must be met for
"bodily injury" tp be classified as accidental? - Answer✔️✔️-The cause may
be intentional, but the result must be accidental
The elimination period in a disability income policy serves the same
purpose - Answer✔️✔️-a deductible
Which of the following is NOT a provision in a disability income policy -
Answer✔️✔️-Deductible and coinsurance provision
Allen has a disability income policy with a $2,500 monthly benefit and a 30-
day elimination period. He is unable to work 90 days following an
automobile accident. What will the policy pay? - Answer✔️✔️-$5,000 (90
days - 30 days = 60 days or 2 months) 2 months x $2,500
The problem of overinsurance is addressed in which health insurance
provision - Answer✔️✔️-Coordination of benefits
3
