Final exam Questions with All Correct
Answers 2025-2026 Updated.
What kind of annuity pays income to two annuitants until their deaths? - Answer Joint and
survivor 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
The systematic liquidation of a sum of money is provided by a(n) - Answer annuity
Which of the following is a NOT a feature of equity-indexed annuities? - Answer Offers a
maximum interest rate that increases annually
A savings vehicle designed to first accumulate funds and then systematically liquidates the funds
is called an - Answer Deferred annuity
What distinguishes a deferred annuity from an immediately annuity - Answer The time at
which benefit payments start
What is a common reason people purchase an annuity - Answer To protect against the risk of
outliving their financial resources
Cindy buys a ten-year certain annuity with an installment refund. After receiving monthly
payments for five years, Cindy dies. How many remaining payments will the insurer make to her
beneficiary? - Answer 60 payments
When a mutual insurance becomes a stock company - Answer Demutualization
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 and participate on policies
AAA insurance company has transferred a portion of its loss exposure to BBB insurance
company. In this reinsurance transaction, what is a AAA insurance company called - Answer
Primary insurer
Which of the following is NOT a benefit of insurance - Answer Losses due to fraud are
eliminated
, What is a participating life insurance policy - Answer Contract that allows the policy owner to
receive a share of surplus form of policy dividends
One important function of an insurance company just to identify and sell to potential
customers. Which of these best describes this function - Answer Marketing
Which of the following is a type of insurance with the insured transfers loss exposures from
policies written to its insureds - Answer Reinsurance
Which of the following statements correctly describes the contract of indemnity - Answer
One party is restored to the same financial position the party was in before the loss occurred
A contract requires - Answer an offer and acceptance of the contract terms
Reasonably necessary ask that an agent must perform for caring out his/her expressly
authorized duties are covered by an agent's - Answer Implied authority
Which of the following statements about aleatory contracts is NOT true? - Answer The
insured and the insured contribute equally to the contract
Which principle is accurately described with this statement "insureds are entitled to recover an
amount not greater than any amount of their loss" - Answer Indemnity
Which statement is correct when describing a contract of adhesion - Answer Contract may
be excepted or rejected by the insured
When handling premiums for an insured, an agent is acting in which capacity - Answer
fiduciary
Pam is the primary beneficiary of life insurance policy and wants to let the death benefit
accumulate and receive only the monthly investment proceeds. Which settlement option should
she choose - Answer Interest option
Which of the following describes the number of deaths in a year compared to the number of
people in a select group - Answer Mortality rate
Which of the following is NOT an insurance policy expense - Answer Premium
Answers 2025-2026 Updated.
What kind of annuity pays income to two annuitants until their deaths? - Answer Joint and
survivor 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
The systematic liquidation of a sum of money is provided by a(n) - Answer annuity
Which of the following is a NOT a feature of equity-indexed annuities? - Answer Offers a
maximum interest rate that increases annually
A savings vehicle designed to first accumulate funds and then systematically liquidates the funds
is called an - Answer Deferred annuity
What distinguishes a deferred annuity from an immediately annuity - Answer The time at
which benefit payments start
What is a common reason people purchase an annuity - Answer To protect against the risk of
outliving their financial resources
Cindy buys a ten-year certain annuity with an installment refund. After receiving monthly
payments for five years, Cindy dies. How many remaining payments will the insurer make to her
beneficiary? - Answer 60 payments
When a mutual insurance becomes a stock company - Answer Demutualization
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 and participate on policies
AAA insurance company has transferred a portion of its loss exposure to BBB insurance
company. In this reinsurance transaction, what is a AAA insurance company called - Answer
Primary insurer
Which of the following is NOT a benefit of insurance - Answer Losses due to fraud are
eliminated
, What is a participating life insurance policy - Answer Contract that allows the policy owner to
receive a share of surplus form of policy dividends
One important function of an insurance company just to identify and sell to potential
customers. Which of these best describes this function - Answer Marketing
Which of the following is a type of insurance with the insured transfers loss exposures from
policies written to its insureds - Answer Reinsurance
Which of the following statements correctly describes the contract of indemnity - Answer
One party is restored to the same financial position the party was in before the loss occurred
A contract requires - Answer an offer and acceptance of the contract terms
Reasonably necessary ask that an agent must perform for caring out his/her expressly
authorized duties are covered by an agent's - Answer Implied authority
Which of the following statements about aleatory contracts is NOT true? - Answer The
insured and the insured contribute equally to the contract
Which principle is accurately described with this statement "insureds are entitled to recover an
amount not greater than any amount of their loss" - Answer Indemnity
Which statement is correct when describing a contract of adhesion - Answer Contract may
be excepted or rejected by the insured
When handling premiums for an insured, an agent is acting in which capacity - Answer
fiduciary
Pam is the primary beneficiary of life insurance policy and wants to let the death benefit
accumulate and receive only the monthly investment proceeds. Which settlement option should
she choose - Answer Interest option
Which of the following describes the number of deaths in a year compared to the number of
people in a select group - Answer Mortality rate
Which of the following is NOT an insurance policy expense - Answer Premium
