California Life and Health Insurance Practice Exam 2025 – Your All-in-One Guide to Exam Success!

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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?

60 payments

In the context of a 10-year certain annuity with an installment refund, the structure of the payout ensures that the total duration of payments is 10 years, totaling 120 monthly payments (since 10 years x 12 months = 120 payments). Since Cindy has received payments for 5 years, that accounts for 60 of those payments (5 years x 12 months = 60 payments).

The key feature of an installment refund is that if the annuitant (Cindy) dies before receiving the total amount equivalent to the initial investment, the remaining payments will continue for the duration of the certain period (in this case, the remaining 5 years) and will be paid to her beneficiary. Therefore, if Cindy has already received 60 payments before her death, the insurer is obligated to make the remaining 60 payments to her beneficiary.

Hence, the correct answer reflects this scenario: after Cindy's death, there will be 60 remaining payments made to her beneficiary.

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30 payments

120 payments

5 payments

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