XCEL FINAL EXAM CALIFORNIA LIFE
INSURANCE EXAM QUESTIONS AND
ANSWERS GRADED A+ 2026
A savings vehicle designed to first accumulate funds and then systematically liquidates the funds
is called a(n) - ANS Deferred 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? - ANS 60 Payments
What distinguishes a deferred annuity from an immediate annuity? - ANS The time at which
benefit payments start
The systematic liquidation of a sum of money is provided by a(n) - ANS Annuity
What kind of annuity pays income to two annuitants until their deaths? - ANS Joint And
Survivor Annuity
Which of the following is NOT a feature of equity-indexed annuities? - ANS Offers a maximum
interest rate that increases annually
@COPYRIGHT 2026/2027 ALL RIGHTS RESERVED
1
, An annuitant would like to determine the amount of an annuity distribution that is exempt from
taxation. What is used to calculate this? - ANS Exclusion Ratio
An annuity which is backed by a life insurer's separate account is called a(n) - ANS Variable
Annuity
Which of the following is a contract that involves one party which indemnifies another when a
loss arises from an unknown event? - ANS Insurance Policy
Which of the following is NOT a benefit of insurance? - ANS Losses due to fraud are
eliminated
What is a participating life insurance policy? - ANS Contract 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? - ANS Captive Insurer
Which of the following is NOT a characteristic of reinsurance? - ANS Increases 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? - ANS Reinsurance
An insurer owned by its policyholders is called a - ANS Mutual Insurer
Which of the following contracts is defined as "one that restores an injured party to the
condition that was present before the loss"? - ANS Indemnity Contract
@COPYRIGHT 2026/2027 ALL RIGHTS RESERVED
2
INSURANCE EXAM QUESTIONS AND
ANSWERS GRADED A+ 2026
A savings vehicle designed to first accumulate funds and then systematically liquidates the funds
is called a(n) - ANS Deferred 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? - ANS 60 Payments
What distinguishes a deferred annuity from an immediate annuity? - ANS The time at which
benefit payments start
The systematic liquidation of a sum of money is provided by a(n) - ANS Annuity
What kind of annuity pays income to two annuitants until their deaths? - ANS Joint And
Survivor Annuity
Which of the following is NOT a feature of equity-indexed annuities? - ANS Offers a maximum
interest rate that increases annually
@COPYRIGHT 2026/2027 ALL RIGHTS RESERVED
1
, An annuitant would like to determine the amount of an annuity distribution that is exempt from
taxation. What is used to calculate this? - ANS Exclusion Ratio
An annuity which is backed by a life insurer's separate account is called a(n) - ANS Variable
Annuity
Which of the following is a contract that involves one party which indemnifies another when a
loss arises from an unknown event? - ANS Insurance Policy
Which of the following is NOT a benefit of insurance? - ANS Losses due to fraud are
eliminated
What is a participating life insurance policy? - ANS Contract 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? - ANS Captive Insurer
Which of the following is NOT a characteristic of reinsurance? - ANS Increases 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? - ANS Reinsurance
An insurer owned by its policyholders is called a - ANS Mutual Insurer
Which of the following contracts is defined as "one that restores an injured party to the
condition that was present before the loss"? - ANS Indemnity Contract
@COPYRIGHT 2026/2027 ALL RIGHTS RESERVED
2
