Page | 1
FInal Exam: California Life, Accident,
and Health Insurance Questions with
Detailed Verified Answers
Question: What distinguishes a deferred annuity from an immediate annuity?
Ans: The time at which benefit payments start
Question: 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?
Ans: 60 payments
Question: What is a common reason people purchase an annuity?
Ans: To protect against the risk of outliving their financial resources
Question: What kind of annuity pays income to two annuitants until their
deaths?
Ans: Joint and survivor annuity
Question: What is a joint and survivor annuity?
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Ans: 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.
Question: 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
Ans: for a minimum of 120 months and a maximum of the remainder of her
life
Question: Which of the following statements regarding a life insurance policy
dividend is TRUE?
Ans: It is the distribution of excess of funds accumulated by the insurer on
participating policies.
Question: An insured owned by its policyholders is called a
Ans: mutual insurer
Question: 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?
Ans: Reinsurance
Question: What is reinsurance?
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Ans: An arrangement by which an insurance company transfers a portion of a
risk it has assumed to another insurer
Question: Which of the following is NOT a characteristic of reinsurance?
Ans: Increases the unearned premium reserve
Question: Which of the following is a contract that involves one party which
indemnifies another when a loss arises from an unknown event?
Ans: Insurance policy
Question: What is an insurance policy?
Ans: A contract where one party promises to indemnify another against loss
that arises from an unknown event
Question: What is residual disability income insurance payments based on?
Ans: The amount of the insured's income is reduced by the disability
Question: Manuel is considered to be a disabled person as defined by the
Americans with Disabilities Act (ADA). As such, he is unable to perform any of
the following life activities EXCEPT
Ans: Driving
Question: Which of the following is NOT a provision in a disability income
policy?
FInal Exam: California Life, Accident,
and Health Insurance Questions with
Detailed Verified Answers
Question: What distinguishes a deferred annuity from an immediate annuity?
Ans: The time at which benefit payments start
Question: 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?
Ans: 60 payments
Question: What is a common reason people purchase an annuity?
Ans: To protect against the risk of outliving their financial resources
Question: What kind of annuity pays income to two annuitants until their
deaths?
Ans: Joint and survivor annuity
Question: What is a joint and survivor annuity?
, Page | 2
Ans: 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.
Question: 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
Ans: for a minimum of 120 months and a maximum of the remainder of her
life
Question: Which of the following statements regarding a life insurance policy
dividend is TRUE?
Ans: It is the distribution of excess of funds accumulated by the insurer on
participating policies.
Question: An insured owned by its policyholders is called a
Ans: mutual insurer
Question: 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?
Ans: Reinsurance
Question: What is reinsurance?
, Page | 3
Ans: An arrangement by which an insurance company transfers a portion of a
risk it has assumed to another insurer
Question: Which of the following is NOT a characteristic of reinsurance?
Ans: Increases the unearned premium reserve
Question: Which of the following is a contract that involves one party which
indemnifies another when a loss arises from an unknown event?
Ans: Insurance policy
Question: What is an insurance policy?
Ans: A contract where one party promises to indemnify another against loss
that arises from an unknown event
Question: What is residual disability income insurance payments based on?
Ans: The amount of the insured's income is reduced by the disability
Question: Manuel is considered to be a disabled person as defined by the
Americans with Disabilities Act (ADA). As such, he is unable to perform any of
the following life activities EXCEPT
Ans: Driving
Question: Which of the following is NOT a provision in a disability income
policy?
