Xcel Solutions Final Exam;
California Life | Questions and
correct answers | Latest version
2024/2025
What distinguishes a deferred annuity from an immediate annuity? - 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? -
ANSWER -60 payments
What is a common reason people purchase an annuity? - ANSWER -To protect against the risk of
outliving their financial resources
What kind of annuity pays income to two annuitants until their deaths? - ANSWER -Joint and survivor
annuity
What is a joint and survivor annuity? - 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 - 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? - 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 - 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? - ANSWER -Reinsurance
What is reinsurance? - 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? - 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? - ANSWER -Insurance policy
What is an insurance policy? - ANSWER -A contract where one party promises to indemnify another
against loss that arises from an unknown event
What is residual disability income insurance payments based on? - ANSWER -The amount of the
insured's income is reduced by the disability
, 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 - ANSWER -Driving
Which of the following is NOT a provision in a disability income policy? - ANSWER -Deductible and
coinsurance provision
Which of these statements is NOT true concerning recurrent disabilities? - ANSWER -The insurer
continues coverage after a new elimination period
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 tasks of her job. Kim is
now considered to be - ANSWER -totally disabled
What percentage of eligible employees must participate in a noncontributory group health plan
before it can be put in effect? - ANSWER -100%
Business Overhead Expense Insurance pays for - ANSWER -business expenses when a business owner
becomes disabled
Minimum participation standards exist for group health insurance plans in order to - ANSWER -
prevent adverse selection
The problem of overinsurance is addressed in which health insurance provision? - ANSWER -
Coordination of benefits
What is the purpose of the coordination of benefits (COB) provision? - ANSWER -To avoid duplication
of benefit payments and overinsurance when an individual is covered under more than one group
health plan
Who is financially liable for the payment of covered claims in a fully insured group health plan? -
ANSWER -Insurer
The insurer has the option of terminating a health insurance policy on a date stated in the contract.
What type of policy is this? - ANSWER -Optionally renewable
What is an optionally renewable policy? - ANSWER -A provision allowing an insurer to terminate the
policy on a date specified in the contract
Bruce is involved in an accident and becomes totally and permanently disabled. His insurance policy
continues in force without payment of further premiums. Which policy provision is responsible for
this? - ANSWER -Waiver of premium provision
Christine has a health insurance policy that has been in force beyond the incontestable period. The
insurer has discovered that a fraudulent statement was made on the application. What would the
insurer have to pay on a claim, assuming this wasn't a guaranteed renewable policy? - ANSWER -
Nothing
What type of health insurance policy cannot be canceled by the insurer nor increase the premiums? -
ANSWER -Noncancellable
The conditions, times, and circumstances under which an insured is NOT covered by a health policy
are called? - ANSWER -exclusions
What are exclusions in a health policy? - ANSWER -Specified hazards listed in a policy for which
benefits will not be paid
California Life | Questions and
correct answers | Latest version
2024/2025
What distinguishes a deferred annuity from an immediate annuity? - 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? -
ANSWER -60 payments
What is a common reason people purchase an annuity? - ANSWER -To protect against the risk of
outliving their financial resources
What kind of annuity pays income to two annuitants until their deaths? - ANSWER -Joint and survivor
annuity
What is a joint and survivor annuity? - 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 - 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? - 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 - 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? - ANSWER -Reinsurance
What is reinsurance? - 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? - 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? - ANSWER -Insurance policy
What is an insurance policy? - ANSWER -A contract where one party promises to indemnify another
against loss that arises from an unknown event
What is residual disability income insurance payments based on? - ANSWER -The amount of the
insured's income is reduced by the disability
, 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 - ANSWER -Driving
Which of the following is NOT a provision in a disability income policy? - ANSWER -Deductible and
coinsurance provision
Which of these statements is NOT true concerning recurrent disabilities? - ANSWER -The insurer
continues coverage after a new elimination period
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 tasks of her job. Kim is
now considered to be - ANSWER -totally disabled
What percentage of eligible employees must participate in a noncontributory group health plan
before it can be put in effect? - ANSWER -100%
Business Overhead Expense Insurance pays for - ANSWER -business expenses when a business owner
becomes disabled
Minimum participation standards exist for group health insurance plans in order to - ANSWER -
prevent adverse selection
The problem of overinsurance is addressed in which health insurance provision? - ANSWER -
Coordination of benefits
What is the purpose of the coordination of benefits (COB) provision? - ANSWER -To avoid duplication
of benefit payments and overinsurance when an individual is covered under more than one group
health plan
Who is financially liable for the payment of covered claims in a fully insured group health plan? -
ANSWER -Insurer
The insurer has the option of terminating a health insurance policy on a date stated in the contract.
What type of policy is this? - ANSWER -Optionally renewable
What is an optionally renewable policy? - ANSWER -A provision allowing an insurer to terminate the
policy on a date specified in the contract
Bruce is involved in an accident and becomes totally and permanently disabled. His insurance policy
continues in force without payment of further premiums. Which policy provision is responsible for
this? - ANSWER -Waiver of premium provision
Christine has a health insurance policy that has been in force beyond the incontestable period. The
insurer has discovered that a fraudulent statement was made on the application. What would the
insurer have to pay on a claim, assuming this wasn't a guaranteed renewable policy? - ANSWER -
Nothing
What type of health insurance policy cannot be canceled by the insurer nor increase the premiums? -
ANSWER -Noncancellable
The conditions, times, and circumstances under which an insured is NOT covered by a health policy
are called? - ANSWER -exclusions
What are exclusions in a health policy? - ANSWER -Specified hazards listed in a policy for which
benefits will not be paid
