Group Life & AnnuitiesQuestion 106 of 716
An annuity is best described as protection against which risk?
a.Property loss due to fire or theft
b.Becoming disabled and losing earned income
c.Living too long and outliving one's savings
d.Dying too soon and leaving dependents without income
Explanation
An annuity is the mirror image of life insurance. Life insurance insures against dying too soon; an annuity insures against living too long, by converting accumulated savings into a stream of income that the annuitant cannot outlive.
Law Reference: Cal. Ins. Code §10168.2This topic, taught in full in the California Life & Health Insurance Producer Exam guide. California Life & Health Insurance Producer Exam — Complete Study Guide (2026) — PDF + EPUB, $19.99 · 14-day refund →
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Related questions on this topic
- An employee with $100,000 of group term life coverage is terminated. How long does she have to convert to an individual permanent policy without proof of insurability?
- Under Internal Revenue Code Section 79, how much employer-paid group term life coverage on an employee is excluded from the employee's taxable income?
- Which federal agency has primary responsibility for enforcing ERISA's fiduciary, disclosure, and reporting rules for employer-sponsored benefit plans?
- In an annuity contract, whose life is used to calculate the periodic payouts during the annuitization phase?
- In a fixed annuity, who bears the investment risk on the funds the owner has paid in?
- Which license, in addition to a California life-only license, must a producer hold to sell a variable annuity?
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PrepPass team · Verified against California Life & Health Insurance License Exam · How we review
Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)