CALIFORNIA LIFE, ACCIDENT AND HEALTH CRAM COURSE
FINAL EXAM 2025/2026 BANK ACTUAL QUESTIONS WITH
DETAILED ANSWERS WITH STUDY GUIDE EXPERT VERIFIED
FOR GUARANTEED PASS/ALREADY GRADED A+
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?
- No payments
- 30 payments
- 60 payments
- 120 payments ... ANSWER..60 Payments
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 ... ANSWER..Exclusion ratio
The systematic liquidation of a sum of money is provided by a(n)
- annuity
- endowment contract
- life insurance policy
- 1035 contract exchange ... ANSWER..annuity
Which of the following is NOT a feature of equity-indexed annuities?
- 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 ... 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 ... ANSWER..Joint and survivor annuity
A savings vehicle designed to first accumulate funds and then systematically liquidates
the funds is called a(n)
1
,[Type here]
- immediate annuity
- deferred annuity
- endowment
- whole life policy ... ANSWER..deferred 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 ... ANSWER..variable 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
- Warranty arrangement
- Indemnification arrangement
- Loss contract ... ANSWER..Insurance Policy
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 ... ANSWER..Captive insurer
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 ... ANSWER..Participating
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 ... ANSWER..Marketing
When a mutual insurer becomes a stock company, the process is called
2
,[Type here]
- Reinsurance
- Mutualization
- Demutualization
- Reorganization ... ANSWER..Demutualization
What is a participating life insurance policy?
- Agreement that insurers two or more lives
- Agreement that allows two or more beneficiaries to share in the death benefit
- Contract that gives beneficiaries the right to participate in any dividends
- Contract that allows the policyowner to receive a share of surplus in the form of policy
dividends ... ANSWER..Contract that allows the policyowner to receive a share of
surplus in the form of policy dividends
The elimination period is a disability income policy serves the same purpose as
- a deductible
- coinsurance
- an elective indemnity
- waiver of premium ... ANSWER..a deductible
Under a disability income insurance policy, which criteria must be met for "bodily injury"
to be classified as accidental?
- 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 ... ANSWER..The
cause may be intentional, but the result must be accidental
What are residual disability income insurance payments based on?
- 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 ... ANSWER..The amount of the insured's income
is reduced by the disability
Dyan is considered partially disabled by her insurance company. Which of the following
BEST describes her situation?
- She is working part-time and receiving lost income 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 compensation
3
, [Type here]
- Her employer pays half of her disability benefit ... ANSWER..She is working part-time
and receiving lost income under her long-term disability benefit
An individual covered under a disability income policy may be eligible for a partial
disability benefit if
- the insured can perform some of their job activities on a 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 ... ANSWER..the insured can
perform some of their job activities on a part-time basis
Which of the following could lower the premium of a proposed disability income policy?
- Increasing the elimination period
- Decreasing the elimination period
- Increasing the benefit period
- Selecting an "own-occupation" clause instead of an "any-occupation" clause ...
ANSWER..Increasing the elimination period
Which of the following is NOT a provision in a disability income policy?
- Change of occupation provision
- Recurrent disability provision
- Deductible and coinsurance provision
- Elimination period provision ... ANSWER..Deductible and coinsurance provision
Who is financially liable for the payment of covered claims in a fully insured group health
plan?
- Insurer
- Group Member
- Health provider
- Guaranty Association ... ANSWER..Insurer
Which of the following is NOT typically covered under vision care insurance?
- Eye surgery
- Eyeglasses
- Examinations
- Contacts ... ANSWER..Eye surgery
During the underwriting process for a group health policy, it was discovered that 15 out
of 50 members of the group have major health issues. How would the insurer handle
this?
4
FINAL EXAM 2025/2026 BANK ACTUAL QUESTIONS WITH
DETAILED ANSWERS WITH STUDY GUIDE EXPERT VERIFIED
FOR GUARANTEED PASS/ALREADY GRADED A+
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?
- No payments
- 30 payments
- 60 payments
- 120 payments ... ANSWER..60 Payments
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 ... ANSWER..Exclusion ratio
The systematic liquidation of a sum of money is provided by a(n)
- annuity
- endowment contract
- life insurance policy
- 1035 contract exchange ... ANSWER..annuity
Which of the following is NOT a feature of equity-indexed annuities?
- 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 ... 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 ... ANSWER..Joint and survivor annuity
A savings vehicle designed to first accumulate funds and then systematically liquidates
the funds is called a(n)
1
,[Type here]
- immediate annuity
- deferred annuity
- endowment
- whole life policy ... ANSWER..deferred 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 ... ANSWER..variable 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
- Warranty arrangement
- Indemnification arrangement
- Loss contract ... ANSWER..Insurance Policy
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 ... ANSWER..Captive insurer
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 ... ANSWER..Participating
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 ... ANSWER..Marketing
When a mutual insurer becomes a stock company, the process is called
2
,[Type here]
- Reinsurance
- Mutualization
- Demutualization
- Reorganization ... ANSWER..Demutualization
What is a participating life insurance policy?
- Agreement that insurers two or more lives
- Agreement that allows two or more beneficiaries to share in the death benefit
- Contract that gives beneficiaries the right to participate in any dividends
- Contract that allows the policyowner to receive a share of surplus in the form of policy
dividends ... ANSWER..Contract that allows the policyowner to receive a share of
surplus in the form of policy dividends
The elimination period is a disability income policy serves the same purpose as
- a deductible
- coinsurance
- an elective indemnity
- waiver of premium ... ANSWER..a deductible
Under a disability income insurance policy, which criteria must be met for "bodily injury"
to be classified as accidental?
- 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 ... ANSWER..The
cause may be intentional, but the result must be accidental
What are residual disability income insurance payments based on?
- 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 ... ANSWER..The amount of the insured's income
is reduced by the disability
Dyan is considered partially disabled by her insurance company. Which of the following
BEST describes her situation?
- She is working part-time and receiving lost income 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 compensation
3
, [Type here]
- Her employer pays half of her disability benefit ... ANSWER..She is working part-time
and receiving lost income under her long-term disability benefit
An individual covered under a disability income policy may be eligible for a partial
disability benefit if
- the insured can perform some of their job activities on a 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 ... ANSWER..the insured can
perform some of their job activities on a part-time basis
Which of the following could lower the premium of a proposed disability income policy?
- Increasing the elimination period
- Decreasing the elimination period
- Increasing the benefit period
- Selecting an "own-occupation" clause instead of an "any-occupation" clause ...
ANSWER..Increasing the elimination period
Which of the following is NOT a provision in a disability income policy?
- Change of occupation provision
- Recurrent disability provision
- Deductible and coinsurance provision
- Elimination period provision ... ANSWER..Deductible and coinsurance provision
Who is financially liable for the payment of covered claims in a fully insured group health
plan?
- Insurer
- Group Member
- Health provider
- Guaranty Association ... ANSWER..Insurer
Which of the following is NOT typically covered under vision care insurance?
- Eye surgery
- Eyeglasses
- Examinations
- Contacts ... ANSWER..Eye surgery
During the underwriting process for a group health policy, it was discovered that 15 out
of 50 members of the group have major health issues. How would the insurer handle
this?
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