California Insurance Practice Test - Free 20 Questions

Question 1

According to California regulations, who is defined as a 'senior' for the purposes of annuity and life insurance sales?

Accepted Answer

Anyone age 60 or older

Answer

Anyone over age 55

Answer

Anyone age 65 or older

Answer

Anyone who is retired

Question 2

The 'life with period certain' annuity payout option guarantees:

Accepted Answer

Payments for the annuitant's life, and for a specified minimum period if the annuitant dies early.

Answer

Payments for a fixed period only.

Answer

A refund of the principal if the annuitant dies.

Answer

Payments for the lives of two annuitants.

Question 3

The annuitization of a deferred annuity contract must begin by what age to avoid penalties?

Accepted Answer

There is no required age

Answer

Age 59 1/2

Answer

Age 72

Answer

Age 85

Question 4

What is the tax consequence of taking a loan from an annuity?

Accepted Answer

Loans are treated as taxable distributions under the LIFO method.

Answer

Loans are not permitted from annuities.

Answer

Loans are treated as tax-free, just like with life insurance.

Answer

Loans are only permitted from qualified annuities.

Question 5

The period during which an annuitant is making payments into an annuity is called the:

Accepted Answer

Accumulation period

Answer

Payout period

Answer

Annuitization period

Answer

Benefit period

Question 6

When an agent delivers an annuity contract to a client in California, they must also provide a:

Accepted Answer

Buyer's Guide and a Policy Summary.

Answer

Copy of their insurance license.

Answer

List of all other available annuity products.

Answer

Personalized financial plan.

Question 7

An agent is recommending that a 75-year-old client with limited assets put all of her savings into a deferred variable annuity with a 15-year surrender period. This recommendation is likely:

Accepted Answer

Unsuitable, due to the client's age, liquidity needs, and risk exposure.

Answer

Suitable, because it offers high growth potential.

Answer

Suitable, because variable annuities are good for all seniors.

Answer

Unsuitable, because a fixed annuity would be better.

Question 8

The 'cash refund' life annuity payout option provides that if the annuitant dies before receiving payments equal to the principal:

Accepted Answer

The beneficiary will receive a lump-sum payment of the remaining principal.

Answer

All payments will cease.

Answer

Payments will continue to a beneficiary for a fixed period.

Answer

The beneficiary will continue to receive payments for life.

Question 9

Once a variable annuity is annuitized, the number of annuity units:

Accepted Answer

Remains fixed.

Answer

Fluctuates daily.

Answer

Increases each year.

Answer

Decreases each year.

Question 10

The period during which an annuity makes payments to the annuitant is the:

Accepted Answer

Liquidation period

Answer

Accumulation period

Answer

Contribution period

Answer

Growth period

Question 1 of 84

According to California regulations, who is defined as a 'senior' for the purposes of annuity and life insurance sales?