2025 Updated CA Life Insurance Exam Prep | Comprehensive Questions, Verified Answers, and Rationales | Boost Your Confidence for A+ Success!
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2025 Update CA
2025 Updated CA Life Insurance Exam Prep | Comprehensive Questions, Verified Answers, and Rationales | Boost Your Confidence for A+ Success!
which of the following is a feature of a single premium immediate annuity?
a. it is purchased through periodic payments
b. income payments start at ag...
2025 Updated CA Life Insurance Exam Prep |
Comprehensive Questions, Verified Answers,
and Rationales | Boost Your Confidence for A+
Success!
which of the following is a feature of a single premium immediate annuity?
a. it is purchased through periodic payments
b. income payments start at age 65
c. it is also referred to as a deferred annuity
d. income payments start within one year - ANS D. income payments start within one year
A Single Premium Immediate annuity is paid in a single premium. The annuity payments begin
within a year of the date of the purchase. A deferred annuity can be punched with either a lump
sum or through periodic payments, but the benefit is not paid until after one year or more has
lapsed
which of the following would most directly affect the purchasing power of death benefits paid
on a fixed annuity?
a. company investment performance
b. guaranteed minimum payout
c. economic inflation
d. interest rations - ANS C. economic inflation
in times of inflation, benefits have less purchasing power. Since costs increase as a result of
inflation, more money is required to purchase something that had previously cost less. Likewise,
in the event of deflation, the purchasing power of benefits increase. The other options listed
,would affect the amount of money available to the annuity owner, but they would not actually
affect the purchasing power of benefits paid
which of the following is NOT true regarding the annuitant?
a. the annuitant receives the annuity benefits
b. the annuitant must be a natural person
c. the annuitant cannot be the same person as the annuity owner
d. the annuitants life expectancy is taken into consideration for the annuity - ANS C. the
annuitant cannot be the same person as the annuity owner
while they don't have to be, the annuitant and annuity owner are often the same person. The
annuitant is the person who receives benefits or payments from the annuity and for whom the
annuity is written> since the annuitants's life expectancy is taken into consideration, the
annuitant must be a natural person
When a fixed annuity owner pays his/her insurance company a monthly annuity premium, where
is this money placed?
a. the insurance company's general account
b. forwarded to an investor
c. each contract's separate account
d. the annuity owner's account - ANS A. the insurance company's general account
fixed annuities guarantee a minimum amount of interest to be credited to the purchase payment.
The insurance company can afford to make guarantees because the money of a fixed annuity is
placed in the general account of the insurance company, which is part of its investment
portfolio.The company makes conservative investments to insure a guaranteed rate to the annuity
owners
an individual buys a flexible premium deferred life annuity with 20 year period certain. What
would his beneficiary receive if he died 5 years after beginning the annuity phase?
,a. payment for 15 years
b. payments for 20 years
c. payments for life
d. nothing - ANS A. payments for 15 years
with any period certain, death of the annuitant within the state period will provide payments to
the beneficiary only for the remainder of the period certain
The form of life annuity which pays benefits throughout the lifetime of the annuitant and also
guarantees payment for a minimum number of years is called
a. joint life annuity
b. life income with period certain
c. life income with refund
d. joint and survivorship - ANS B. life income with period certain
if the annuitant dies before the period certain, the payments continue to a beneficiary or the
estate for the remainder of the period certain
the annuity purchased with multiple payments, whose benefit is paid more than one year after
the purchase is know as which type of annuity?
a.flexible premium immediate annuity
b. single premium deferred annuity
c. flexible premium deferred annuity
d. single premium immediate annuity - ANS C. flexible premium deferred annuity
, the flexible premium deferred annuity (FPDA) is purchased with multiple payments, such as a
portion of each paycheck. The benefit payment begin sometime after a one year from the date of
purchase
which of the following will NOT be an appropriate use of a deferred annuity?
a. creating an estate
b. accumulating retirement funds
c. accumulating funds in an IRA
d. funding a child's college education - ANS A. creating an estate
which of the following products requires a securities license?
a. variable annuity
b. fixed annuity
c. equity indexed annuity
d. deferred annuity - ANS A. variable annuity
a variable annuity is considered to be a security and is regulated by the Securities Exchange
Commission (SEC) in addition to state regulations. For that reason, a person must hold a
securities license in addition to a life agent's license in order to sell variable annuities
all of the following statements are true regarding installments for a fixed period annually
settlement option EXCEPT:
a. it will pay the benefit only for a designated period of time
b. the payments are not guaranteed for life
c. the insurer determines the amount for each payment
d. it is a life contingency option - ANS D. it is a life contingency option
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