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California Life Insurance State Exam Simulator 2024/2025 already graded A+
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California Life Insurance State Exam Simulator 2024/2025 already graded A+
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California Life Insurance State ExamSimulator
Exclusion ratio - ANSAn annuitant would life 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 ration
Offers a maximum interest rate that increases annually - ANSWhich of the following is NOT a
feature of equity-indexed annuities?
Offers long term inflation protection, Offers a minimum guaranteed rate, Offers a maximum
interest rate that increases annually, Offers protection during a decline in the stock market
Joint and survivor annuity - ANSWhat kind of annuity pays income to two annuitants until their
deaths?
Period certain annuity
Joint and survivor annuity
Straight life annuity
Installment refund
For a minimum of 120 months and a maximum of the remainder of his life - ANSVictoria 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
For a period of time dependent on the performance of the annuity's underlying assets
For a maximum of 120 months
For the remainder of her life only
For a minimum of 120 months and a maximum of the remainder of his life
Variable annuity - ANSAn annuitant would life to determine the current value of her annuity. To
do this, she multiplies the number of "accumulation units" she owns times the unit value of the
"separate account". What kind of annuity BEST matches this description?
Variable annuity
Fixed annuity
Immediate annuity
Life annuity
,60 payments - ANSCindy buys a 10-year 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
To protect against the risk of outliving their financial resources - ANSWhat is a common reason
people purchase an annuity?
To create an immediate estate
To pay off a debt in the event of death
To minimize their tax burden
To protect against the risk of outliving their financial resources
Variable annuity - ANSAn 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
The time at which benefit payments start - ANSWhat distinguishes a deferred annuity from an
immediate annuity?
The time at which benefit payments start
The benefit payment amount
The taxation of benefit payments
The age at which the annuity can be purchased
Deferred annuity - ANSA 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
Insurance policy - ANSWhich of the following is a contract that involves one party which
indemnifies another when a loss arises from an unknown event?
Insurance policy
Loss contract
Warranty arrangement
Indemnification arrangement
Mutual insurer - ANSA participating company is also referred to as which type of insurer?
,Reciprocal insurer
Re-insurer
Mutual insurer
Domestic insurer
Reinsurance - ANSAn insurer enters into a contract with a third party to insure itself against
losses from insurance policies it issues. What is this agreement called?
Reinsurance
Mutual
Multi-line
Reserves
Primary insurer - ANSAAA Insurance Company has transferred a portion of its loss exposure to
BBB Insurance Company. In this reinsurance transaction, what is AAA Insurance Company
called?
Tertiary insurer
Primary insurer
Secondary insurer
Captive insurer
Contract that allows the policyowner to receive a share of surplus in the form of policy dividends
- ANSWhat is a participating life insurance policy?
Contract that gives beneficiaries the right to participate in any dividends
Agreement that insures two or more lives
Agreement that allows two or more beneficiaries to share in the death benefit
Contract that allows the policyowner to receive a share of surplus in the form of policy dividends
Participating - ANSJohn owns an insurance policy that gives him the right to share in the
insurer's surplus. What kind of policy is this?
Contributory
Nonparticipating
Surplus
Participating
Increases the unearned premium reserve - ANSWhich of the following is NOT a characteristic of
reinsurance?
Protects against a very large claim
Increases the unearned premium reserve
A specialized branch of the insurance industry
Enables insurer to meet certain objectives
Marketing - ANSOne important function of an insurance company is to identify and sell to
potential customers. Which of the BEST describes this function?
Regulation
, Marketing
Underwriting
Reinsurance
It is the distribution of excess of funds accumulated by the insurer on participating policies -
ANSWhich of the following statements regarding a life insurance policy dividend is TRUE?
It is a stockholders return on his investment in the company
It is the distribution of excess of funds accumulated by the insurer on participating policies
It represents the built-up of cash value in a permanent insurance policy
It represents a refund of overcharged premium in a non-participating whole life policy
Losses due to fraud are eliminated - ANSWhich of the following is NOT a benefit of insurance?
Source of investment funds
Makes a loss whole again
Reduces the uncertainty of loss exposures
Losses due to fraud are eliminated
Mutual insurer - ANSAn insurer owned by its policyholders is called a
Multi-line insurer
Mutual insurer
Reinsurer
Stock insurer
One party is restored to the same financial position the party was in before the loss occurred -
ANSWhich of the following statements statements correctly describes a contract of indemnity?
One party is restored to the same financial position the party was in before the loss occurred
The unequal exchange of value or consideration for both parties
One party (the insurance company) prepares the contract with no negotiation between the
application and insurer
Only one party (the insurer) makes any kind of enforceable promise
Probability of loss - ANSWhich of the following is NOT required in the content of a policy?
Parties involved in the contract
Period to which the coverage exists
Probability of loss
Risk insured against
Equal consideration is required between the involved parties - ANSWhich of the following is
NOT a requirement of a contract?
Parties involved must be competent
Equal consideration is required between the involved parties
Contract must have a legal purpose
Offer and acceptance must be involved
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