California Life, Accident, and Health
Insurance ACTUAL QUESTIONS AND
CORRECT ANSWERS
What distinguishes a deferred annuity from an immediate annuity? - Correct answers✔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? - Correct answers✔60 payments
What is a common reason people purchase an annuity? - Correct answers✔To protect against the
risk of outliving their financial resources
What kind of annuity pays income to two annuitants until their deaths? - Correct answers✔Joint
and survivor annuity
What is a joint and survivor annuity? - Correct answers✔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 - Correct answers✔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? - Correct
answers✔It is the distribution of excess of funds accumulated by the insurer on participating
policies.
,An insured owned by its policyholders is called a - Correct answers✔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? - Correct answers✔Reinsurance
What is reinsurance? - Correct answers✔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? - Correct answers✔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? - Correct answers✔Insurance policy
What is an insurance policy? - Correct answers✔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? - Correct answers✔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 - Correct
answers✔Driving
Which of the following is NOT a provision in a disability income policy? - Correct
answers✔Deductible and coinsurance provision
, Which of these statements is NOT true concerning recurrent disabilities? - Correct answers✔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 - Correct answers✔totally disabled
What percentage of eligible employees must participate in a noncontributory group health plan
before it can be put in effect? - Correct answers✔100%
Business Overhead Expense Insurance pays for - Correct answers✔business expenses when a
business owner becomes disabled
Minimum participation standards exist for group health insurance plans in order to - Correct
answers✔prevent adverse selection
The problem of overinsurance is addressed in which health insurance provision? - Correct
answers✔Coordination of benefits
What is the purpose of the coordination of benefits (COB) provision? - Correct answers✔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?
- Correct answers✔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? - Correct answers✔Optionally renewable
Insurance ACTUAL QUESTIONS AND
CORRECT ANSWERS
What distinguishes a deferred annuity from an immediate annuity? - Correct answers✔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? - Correct answers✔60 payments
What is a common reason people purchase an annuity? - Correct answers✔To protect against the
risk of outliving their financial resources
What kind of annuity pays income to two annuitants until their deaths? - Correct answers✔Joint
and survivor annuity
What is a joint and survivor annuity? - Correct answers✔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 - Correct answers✔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? - Correct
answers✔It is the distribution of excess of funds accumulated by the insurer on participating
policies.
,An insured owned by its policyholders is called a - Correct answers✔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? - Correct answers✔Reinsurance
What is reinsurance? - Correct answers✔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? - Correct answers✔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? - Correct answers✔Insurance policy
What is an insurance policy? - Correct answers✔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? - Correct answers✔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 - Correct
answers✔Driving
Which of the following is NOT a provision in a disability income policy? - Correct
answers✔Deductible and coinsurance provision
, Which of these statements is NOT true concerning recurrent disabilities? - Correct answers✔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 - Correct answers✔totally disabled
What percentage of eligible employees must participate in a noncontributory group health plan
before it can be put in effect? - Correct answers✔100%
Business Overhead Expense Insurance pays for - Correct answers✔business expenses when a
business owner becomes disabled
Minimum participation standards exist for group health insurance plans in order to - Correct
answers✔prevent adverse selection
The problem of overinsurance is addressed in which health insurance provision? - Correct
answers✔Coordination of benefits
What is the purpose of the coordination of benefits (COB) provision? - Correct answers✔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?
- Correct answers✔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? - Correct answers✔Optionally renewable
