California Life Insurance State Exam
Simulator Questions With Correct Answers
An |annuitant |would |life |to |determine |the |amount |of |an |annuity |distribution |that |is |exempt |
from |taxation. |What |is |used |to |calculate |this?
Mortality |rate,
Exclusion |ratio,
Morbidity |rate,
Debt-to-Equity |ration |- |CORRECT |ANSWER✔✔-Exclusion |ratio
Which |of |the |following |is |NOT |a |feature |of |equity-indexed |annuities?
Offers |long |term |inflation |protection, |Offers |a |minimum |guaranteed |rate, |Offers |a |maximum |
interest |rate |that |increases |annually, |Offers |protection |during |a |decline |in |the |stock |market |- |
CORRECT |ANSWER✔✔-Offers |a |maximum |interest |rate |that |increases |annually
What |kind |of |annuity |pays |income |to |two |annuitants |until |their |deaths?
Period |certain |annuity
Joint |and |survivor |annuity
Straight |life |annuity
Installment |refund |- |CORRECT |ANSWER✔✔-Joint |and |survivor |annuity
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
For |a |period |of |time |dependent |on |the |performance |of |the |annuity's |underlying |assets
,For |a |maximum |of |120 |months
For |the |remainder |of |her |life |only
For |a |minimum |of |120 |months |and |a |maximum |of |the |remainder |of |his |life |- |CORRECT |
ANSWER✔✔-For |a |minimum |of |120 |months |and |a |maximum |of |the |remainder |of |his |life
An |annuitant |would |life |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?
Variable |annuity
Fixed |annuity
Immediate |annuity
Life |annuity |- |CORRECT |ANSWER✔✔-Variable |annuity
Cindy |buys |a |10-year |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?
No |payments
30 |payments
60 |payments
120 |payments |- |CORRECT |ANSWER✔✔-60 |payments
What |is |a |common |reason |people |purchase |an |annuity?
To |create |an |immediate |estate
To |pay |off |a |debt |in |the |event |of |death
To |minimize |their |tax |burden
To |protect |against |the |risk |of |outliving |their |financial |resources |- |CORRECT |ANSWER✔✔-To |
protect |against |the |risk |of |outliving |their |financial |resources
,An |annuity |which |is |backed |by |a |life |insurer's |separate |account |is |called |a(n)
Equity |indexed |annuity
Variable |annuity
Immediate |annuity
403(b) |plan |- |CORRECT |ANSWER✔✔-Variable |annuity
What |distinguishes |a |deferred |annuity |from |an |immediate |annuity?
The |time |at |which |benefit |payments |start
The |benefit |payment |amount
The |taxation |of |benefit |payments
The |age |at |which |the |annuity |can |be |purchased |- |CORRECT |ANSWER✔✔-The |time |at |which |
benefit |payments |start
A |savings |vehicle |designed |to |first |accumulate |funds |and |then |systematically |liquidates |the |
funds |is |called |a(n)
Immediate |annuity
Deferred |annuity
Endowment
Whole |life |policy |- |CORRECT |ANSWER✔✔-Deferred |annuity
Which |of |the |following |is |a |contract |that |involves |one |party |which |indemnifies |another |when |
a |loss |arises |from |an |unknown |event?
Insurance |policy
Loss |contract
Warranty |arrangement
Indemnification |arrangement |- |CORRECT |ANSWER✔✔-Insurance |policy
, A |participating |company |is |also |referred |to |as |which |type |of |insurer?
Reciprocal |insurer
Re-insurer
Mutual |insurer
Domestic |insurer |- |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 |this |agreement |called?
Reinsurance
Mutual
Multi-line
Reserves |- |CORRECT |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?
Tertiary |insurer
Primary |insurer
Secondary |insurer
Captive |insurer |- |CORRECT |ANSWER✔✔-Primary |insurer
What |is |a |participating |life |insurance |policy?
Contract |that |gives |beneficiaries |the |right |to |participate |in |any |dividends
Agreement |that |insures |two |or |more |lives
Agreement |that |allows |two |or |more |beneficiaries |to |share |in |the |death |benefit
Contract |that |allows |the |policyowner |to |receive |a |share |of |surplus |in |the |form |of |policy |
dividends |- |CORRECT |ANSWER✔✔-Contract |that |allows |the |policyowner |to |receive |a |share |of |
surplus |in |the |form |of |policy |dividends
Simulator Questions With Correct Answers
An |annuitant |would |life |to |determine |the |amount |of |an |annuity |distribution |that |is |exempt |
from |taxation. |What |is |used |to |calculate |this?
Mortality |rate,
Exclusion |ratio,
Morbidity |rate,
Debt-to-Equity |ration |- |CORRECT |ANSWER✔✔-Exclusion |ratio
Which |of |the |following |is |NOT |a |feature |of |equity-indexed |annuities?
Offers |long |term |inflation |protection, |Offers |a |minimum |guaranteed |rate, |Offers |a |maximum |
interest |rate |that |increases |annually, |Offers |protection |during |a |decline |in |the |stock |market |- |
CORRECT |ANSWER✔✔-Offers |a |maximum |interest |rate |that |increases |annually
What |kind |of |annuity |pays |income |to |two |annuitants |until |their |deaths?
Period |certain |annuity
Joint |and |survivor |annuity
Straight |life |annuity
Installment |refund |- |CORRECT |ANSWER✔✔-Joint |and |survivor |annuity
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
For |a |period |of |time |dependent |on |the |performance |of |the |annuity's |underlying |assets
,For |a |maximum |of |120 |months
For |the |remainder |of |her |life |only
For |a |minimum |of |120 |months |and |a |maximum |of |the |remainder |of |his |life |- |CORRECT |
ANSWER✔✔-For |a |minimum |of |120 |months |and |a |maximum |of |the |remainder |of |his |life
An |annuitant |would |life |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?
Variable |annuity
Fixed |annuity
Immediate |annuity
Life |annuity |- |CORRECT |ANSWER✔✔-Variable |annuity
Cindy |buys |a |10-year |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?
No |payments
30 |payments
60 |payments
120 |payments |- |CORRECT |ANSWER✔✔-60 |payments
What |is |a |common |reason |people |purchase |an |annuity?
To |create |an |immediate |estate
To |pay |off |a |debt |in |the |event |of |death
To |minimize |their |tax |burden
To |protect |against |the |risk |of |outliving |their |financial |resources |- |CORRECT |ANSWER✔✔-To |
protect |against |the |risk |of |outliving |their |financial |resources
,An |annuity |which |is |backed |by |a |life |insurer's |separate |account |is |called |a(n)
Equity |indexed |annuity
Variable |annuity
Immediate |annuity
403(b) |plan |- |CORRECT |ANSWER✔✔-Variable |annuity
What |distinguishes |a |deferred |annuity |from |an |immediate |annuity?
The |time |at |which |benefit |payments |start
The |benefit |payment |amount
The |taxation |of |benefit |payments
The |age |at |which |the |annuity |can |be |purchased |- |CORRECT |ANSWER✔✔-The |time |at |which |
benefit |payments |start
A |savings |vehicle |designed |to |first |accumulate |funds |and |then |systematically |liquidates |the |
funds |is |called |a(n)
Immediate |annuity
Deferred |annuity
Endowment
Whole |life |policy |- |CORRECT |ANSWER✔✔-Deferred |annuity
Which |of |the |following |is |a |contract |that |involves |one |party |which |indemnifies |another |when |
a |loss |arises |from |an |unknown |event?
Insurance |policy
Loss |contract
Warranty |arrangement
Indemnification |arrangement |- |CORRECT |ANSWER✔✔-Insurance |policy
, A |participating |company |is |also |referred |to |as |which |type |of |insurer?
Reciprocal |insurer
Re-insurer
Mutual |insurer
Domestic |insurer |- |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 |this |agreement |called?
Reinsurance
Mutual
Multi-line
Reserves |- |CORRECT |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?
Tertiary |insurer
Primary |insurer
Secondary |insurer
Captive |insurer |- |CORRECT |ANSWER✔✔-Primary |insurer
What |is |a |participating |life |insurance |policy?
Contract |that |gives |beneficiaries |the |right |to |participate |in |any |dividends
Agreement |that |insures |two |or |more |lives
Agreement |that |allows |two |or |more |beneficiaries |to |share |in |the |death |benefit
Contract |that |allows |the |policyowner |to |receive |a |share |of |surplus |in |the |form |of |policy |
dividends |- |CORRECT |ANSWER✔✔-Contract |that |allows |the |policyowner |to |receive |a |share |of |
surplus |in |the |form |of |policy |dividends
