California Life, Accident, and Health State Exam with Answers Graded A+
1. 60 Payments 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 insur-
er make to her beneficiary?
- No payments
- 30 payments
- 60 payments
- 120 payments
2. Exclusion ratio An annuitant would like 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 ratio
3. annuity The systematic liquidation of a sum of money is provided
by a(n)
- annuity
- endowment contract
- life insurance policy
- 1035 contract exchange
4. Offers a max- Which of the following is NOT a feature of equity-indexed
imum interest annuities?
rate that increas-
es annually - Offers long term inflation protection
- Offers a minimum guarantee rate
- Offers a maximum interest rate that increases annually
- Offers protection during a decline in the stock market
5. Joint and sur- What kind of annuity pays income to two annuitants until
vivor annuity their deaths?
- Period certain annuity
,California Life, Accident, and Health State Exam with Answers Graded A+
- Joint and survivor annuity
- Straight life annuity
- Installment refund
6. deferred annuity 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
7. variable annuity 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
8. Insurance Policy Which of the following is a contract that involves one party
which indemnifies another when a loss arises from an
unknown event?
- Insurance policy
- Warranty arrangement
- Indemnification arrangement
- Loss contract
9. Captive insurer Which of the following is an insurer established by a
parent company for the purpose of insuring the parent
company's loss exposures?
- Participating insurer
- Captive insurer
- Mutual insurer
- Fraternal insurer
10. Participating John owns an insurance policy that gives him the right to
share in the insurer's surplus. What kind of policy is this?
, - Surplus
- Nonparticipating
- Participating
- Contributory
11. Marketing One important function of an insurance company is to
identify and sell to potential customers. Which of these
BEST describes this function?
- Reinsurance
- Underwriting
- Marketing
- Regulation
12. Demutualization When a mutual insurer becomes a stock company, the
process is called
- Reinsurance
- Mutualization
- Demutualization
- Reorganization
13. Contract that al- What is a participating life insurance policy?
lows the policy-
owner to receive - Agreement that insurers two or more lives
a share of sur- - Agreement that allows two or more beneficiaries to
plus in the form share in the death benefit
of policy divi- - Contract that gives beneficiaries the right to participate
dends in any dividends
- Contract that allows the policyowner to receive a share
of surplus in the form of policy dividends
14. a deductible The elimination period is a disability income policy serves
the same purpose as
- a deductible
- coinsurance
- an elective indemnity
- waiver of premium
, 15. The cause may Under a disability income insurance policy, which criteria
be intentional, must be met for "bodily injury" to be classified as acciden-
but the result tal?
must be acciden-
tal - Only the result needed be of natural cause
- Only the cause need be accidental
- Both the injury and the cause need be accidental
- The cause may be intentional, but the result must be
accidental
16. The amount of What are residual disability income insurance payments
the insured's in- based on?
come is reduced
by the disability - A flat benefit amount stated in the policy
- 50% of the full disability amount
- The amount of the insured's income is reduced by the
disability
- The insured must be totally disabled
17. She is working Dyan is considered partially disabled by her insurance
part-time and re- company. Which of the following BEST describes her
ceiving lost in- situation?
come under her
long-term dis- - She is working part-time and receiving lost income
ability benefit under her long-term disability benefit
- She has lost hearing in one ear because of an accident
on the job
- She is unable to work and receiving worker's compen-
sation
- Her employer pays half of her disability benefit
18. the insured can An individual covered under a disability income policy
perform some of may be eligible for a partial disability benefit if
their job ac-
tivities on a - the insured can perform some of their job activities on a
part-time basis part-time basis
- the insured cannot perform any of their job activities
- the cause of disability was from from an accident only
- the insured is enrolled in a rehabilitation program
1. 60 Payments 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 insur-
er make to her beneficiary?
- No payments
- 30 payments
- 60 payments
- 120 payments
2. Exclusion ratio An annuitant would like 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 ratio
3. annuity The systematic liquidation of a sum of money is provided
by a(n)
- annuity
- endowment contract
- life insurance policy
- 1035 contract exchange
4. Offers a max- Which of the following is NOT a feature of equity-indexed
imum interest annuities?
rate that increas-
es annually - Offers long term inflation protection
- Offers a minimum guarantee rate
- Offers a maximum interest rate that increases annually
- Offers protection during a decline in the stock market
5. Joint and sur- What kind of annuity pays income to two annuitants until
vivor annuity their deaths?
- Period certain annuity
,California Life, Accident, and Health State Exam with Answers Graded A+
- Joint and survivor annuity
- Straight life annuity
- Installment refund
6. deferred annuity 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
7. variable annuity 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
8. Insurance Policy Which of the following is a contract that involves one party
which indemnifies another when a loss arises from an
unknown event?
- Insurance policy
- Warranty arrangement
- Indemnification arrangement
- Loss contract
9. Captive insurer Which of the following is an insurer established by a
parent company for the purpose of insuring the parent
company's loss exposures?
- Participating insurer
- Captive insurer
- Mutual insurer
- Fraternal insurer
10. Participating John owns an insurance policy that gives him the right to
share in the insurer's surplus. What kind of policy is this?
, - Surplus
- Nonparticipating
- Participating
- Contributory
11. Marketing One important function of an insurance company is to
identify and sell to potential customers. Which of these
BEST describes this function?
- Reinsurance
- Underwriting
- Marketing
- Regulation
12. Demutualization When a mutual insurer becomes a stock company, the
process is called
- Reinsurance
- Mutualization
- Demutualization
- Reorganization
13. Contract that al- What is a participating life insurance policy?
lows the policy-
owner to receive - Agreement that insurers two or more lives
a share of sur- - Agreement that allows two or more beneficiaries to
plus in the form share in the death benefit
of policy divi- - Contract that gives beneficiaries the right to participate
dends in any dividends
- Contract that allows the policyowner to receive a share
of surplus in the form of policy dividends
14. a deductible The elimination period is a disability income policy serves
the same purpose as
- a deductible
- coinsurance
- an elective indemnity
- waiver of premium
, 15. The cause may Under a disability income insurance policy, which criteria
be intentional, must be met for "bodily injury" to be classified as acciden-
but the result tal?
must be acciden-
tal - Only the result needed be of natural cause
- Only the cause need be accidental
- Both the injury and the cause need be accidental
- The cause may be intentional, but the result must be
accidental
16. The amount of What are residual disability income insurance payments
the insured's in- based on?
come is reduced
by the disability - A flat benefit amount stated in the policy
- 50% of the full disability amount
- The amount of the insured's income is reduced by the
disability
- The insured must be totally disabled
17. She is working Dyan is considered partially disabled by her insurance
part-time and re- company. Which of the following BEST describes her
ceiving lost in- situation?
come under her
long-term dis- - She is working part-time and receiving lost income
ability benefit under her long-term disability benefit
- She has lost hearing in one ear because of an accident
on the job
- She is unable to work and receiving worker's compen-
sation
- Her employer pays half of her disability benefit
18. the insured can An individual covered under a disability income policy
perform some of may be eligible for a partial disability benefit if
their job ac-
tivities on a - the insured can perform some of their job activities on a
part-time basis part-time basis
- the insured cannot perform any of their job activities
- the cause of disability was from from an accident only
- the insured is enrolled in a rehabilitation program
