XCEL Final Exam California Life Insurance Questions
and Answers
A savings vehicle designed to first accumulate funds and then systematically liquidates
the funds is called a(n) - AnswerDeferred Annuity
.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? - Answer60 Payments
.What distinguishes a deferred annuity from an immediate annuity? - AnswerThe time at
which benefit payments start
.The systematic liquidation of a sum of money is provided by a(n) - AnswerAnnuity
.What kind of annuity pays income to two annuitants until their deaths? - AnswerJoint
And Survivor Annuity
.Which of the following is NOT a feature of equity-indexed annuities? - AnswerOffers a
maximum interest rate that increases annually
.An annuitant would like to determine the amount of an annuity distribution that is
exempt from taxation. What is used to calculate this? - AnswerExclusion Ratio
.An annuity which is backed by a life insurer's separate account is called a(n) -
AnswerVariable Annuity
.Which of the following is a contract that involves one party which indemnifies another
when a loss arises from an unknown event? - AnswerInsurance Policy
.Which of the following is NOT a benefit of insurance? - AnswerLosses due to fraud are
eliminated
.What is a participating life insurance policy? - AnswerContract that allows the
policyowner to receive a share of surplus in the form of policy dividends
.Which of the following is an insurer established by a parent company for the purpose of
insuring the parent company's loss exposures? - AnswerCaptive Insurer
.Which of the following is NOT a characteristic of reinsurance? - AnswerIncreases the
unearned premium reserve
.Which of the following is a type of insurance where an insurer transfers loss exposures
from policies written for its insureds? - AnswerReinsurance
, .An insurer owned by its policyholders is called a - AnswerMutual Insurer
.Which of the following contracts is defined as "one that restores an injured party to the
condition that was present before the loss"? - AnswerIndemnity Contract
.If a material warranty violation on the part of the insured is found, what recourse does
an insurer have? - AnswerRescind The Policy
.Restoring an insured to the same condition as before a loss is an example of the
principle of - AnswerIndemnity
.Reasonably necessary acts that an agent must perform for carrying out his/her
expressly authorized duties are covered by an agent's - AnswerImplied Authority
.Which principle is accurately described with the statement "Insureds are entitled to
recover an amount NOT greater than the amount of their loss"? - AnswerIndemnity
.Which statement is CORRECT when describing a contract of adhesion? -
AnswerContract may be accepted or rejected by the insured
.Express power given to an agent in an agency agreement is - AnswerThe authority to
represent the insurer
.What is the price of insurance for each exposure unit? - AnswerRate
.A creditor would be allowed rights to life insurance policy proceeds if which of the
following beneficiaries is chosen? - AnswerThe Insured's Estate
.A spendthrift clause in a life insurance policy - AnswerRestricts the ability of the
beneficiary to assign benefits
.Which of the following is NOT an insurer policy expense? - AnswerPremiums
.Pam is the primary beneficiary of a life insurance policy and wants to let the death
benefit accumulate and receive only the monthly investment proceeds. Which
settlement option should she choose? - AnswerInterest Option
.Premiums are best described as - AnswerThe amount an insured pays per unit of
coverage
.How are death benefits that are received by a beneficiary normally treated for tax
purposes? - AnswerExempt from federal income taxes
.When calculating life insurance premium rates, which component is affected by an
insured's age and gender? - AnswerMortality
and Answers
A savings vehicle designed to first accumulate funds and then systematically liquidates
the funds is called a(n) - AnswerDeferred Annuity
.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? - Answer60 Payments
.What distinguishes a deferred annuity from an immediate annuity? - AnswerThe time at
which benefit payments start
.The systematic liquidation of a sum of money is provided by a(n) - AnswerAnnuity
.What kind of annuity pays income to two annuitants until their deaths? - AnswerJoint
And Survivor Annuity
.Which of the following is NOT a feature of equity-indexed annuities? - AnswerOffers a
maximum interest rate that increases annually
.An annuitant would like to determine the amount of an annuity distribution that is
exempt from taxation. What is used to calculate this? - AnswerExclusion Ratio
.An annuity which is backed by a life insurer's separate account is called a(n) -
AnswerVariable Annuity
.Which of the following is a contract that involves one party which indemnifies another
when a loss arises from an unknown event? - AnswerInsurance Policy
.Which of the following is NOT a benefit of insurance? - AnswerLosses due to fraud are
eliminated
.What is a participating life insurance policy? - AnswerContract that allows the
policyowner to receive a share of surplus in the form of policy dividends
.Which of the following is an insurer established by a parent company for the purpose of
insuring the parent company's loss exposures? - AnswerCaptive Insurer
.Which of the following is NOT a characteristic of reinsurance? - AnswerIncreases the
unearned premium reserve
.Which of the following is a type of insurance where an insurer transfers loss exposures
from policies written for its insureds? - AnswerReinsurance
, .An insurer owned by its policyholders is called a - AnswerMutual Insurer
.Which of the following contracts is defined as "one that restores an injured party to the
condition that was present before the loss"? - AnswerIndemnity Contract
.If a material warranty violation on the part of the insured is found, what recourse does
an insurer have? - AnswerRescind The Policy
.Restoring an insured to the same condition as before a loss is an example of the
principle of - AnswerIndemnity
.Reasonably necessary acts that an agent must perform for carrying out his/her
expressly authorized duties are covered by an agent's - AnswerImplied Authority
.Which principle is accurately described with the statement "Insureds are entitled to
recover an amount NOT greater than the amount of their loss"? - AnswerIndemnity
.Which statement is CORRECT when describing a contract of adhesion? -
AnswerContract may be accepted or rejected by the insured
.Express power given to an agent in an agency agreement is - AnswerThe authority to
represent the insurer
.What is the price of insurance for each exposure unit? - AnswerRate
.A creditor would be allowed rights to life insurance policy proceeds if which of the
following beneficiaries is chosen? - AnswerThe Insured's Estate
.A spendthrift clause in a life insurance policy - AnswerRestricts the ability of the
beneficiary to assign benefits
.Which of the following is NOT an insurer policy expense? - AnswerPremiums
.Pam is the primary beneficiary of a life insurance policy and wants to let the death
benefit accumulate and receive only the monthly investment proceeds. Which
settlement option should she choose? - AnswerInterest Option
.Premiums are best described as - AnswerThe amount an insured pays per unit of
coverage
.How are death benefits that are received by a beneficiary normally treated for tax
purposes? - AnswerExempt from federal income taxes
.When calculating life insurance premium rates, which component is affected by an
insured's age and gender? - AnswerMortality
