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Test your basic knowledge |
CA Life Agent Exam
Start Test
Study First
Subject
:
certifications
Instructions:
Answer 50 questions in 15 minutes.
If you are not ready to take this test, you can
study here
.
Match each statement with the correct term.
Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.
This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. Process whereby a reinsurer reinsures w/ another reinsurer.
Common Accident provision
Annuity Classifications (3 of 5): Source of income
Trusts
Retrocession
2. Same as WL but w/ Level Term rider; upon death - pays monthly income for FULL term AFTER which pays full death benefit.
Accidental Death & Dismemberment (AD&D) Life policy
Claim Form (aka Proof of Loss Form) provision
Dividend options
Family Maintenance policy
3. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.
Life insurance policy
Cash value
Key Employee policy
Accidental Death & Dismemberment (AD&D) Life policy
4. Fraternal - non-profit - members only; Reciprocal - unincorp'd org. - members insure each other; Lloyd's Assoc. - groups sharing risks; Surplus lines - special market risks.
Long Term Care (LTC) policy
Types of Insurers (miscellaneous)
Variable Life policy (1 of 2)
Dependent coverage
5. Plan A is the CORE benefit & is least expensive; All other plans include Plan A + additional benefits. Plans F & J are high deductible. K & L are both deductible & co-pay plans.
Human Life Value approach
Misstatement of Age/Sex provision
Plans A-L of Medical Supplement or Medigap
Cost of Living Adjustment (COLA) Disability rider
6. Federal law which allows health coverage portability when changing jobs - so long as previous coverage was in effect 63+ days; allows some tax deductibility for LTC.
Tax implications of Disability policy
Life insurance policy
Renewability provision
Health Insurance Portability and Accountability Act (HIPAA)
7. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.
Types of Agency Authority
Medicare Supplement or Medigap policy
Loss of Earnings Test
Plans A-L of Medical Supplement or Medigap
8. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.
Business Continuation (aka Buy-Sell) Disability policy
Family or Dependents rider
Levels of Long Term Care provided
CA Work. Comp. Statutes
9. Waives premium upon disability of Insured until return to work; disability must persist for 90 days or longer; 1st 90 day premiums refunded after 90 days.
Legal Action provision
Adjustable Whole Life policy
Reinstatement provision
Waiver of Premium provision
10. Peril is the CAUSE of loss. Hazard is a condition that increases LIKELIHOOD of loss.
Peril vs. Hazard
Total disability (any-occupational definition)
Errors & Omissions (E&O)
Civil Rights/Pregnancy Discrimination Act
11. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.
Time Limit on Certain Defenses provision
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Medicare Part A (aka Hospital Insurance or HI)
Life insurance policy
12. Part A - Inpatient hospital deductibles vary on # of days; limited reserve days; finite benefit; 1st 3 pints blood; Part B - 20% co-payment.
Viatical Settlement Provider (VSP)
Incontestability clause/provision
Medicare Part A & B "Gaps"
Applicant Representations vs. Warranties
13. A&H - A&S - Sickness only; Medical; Disability; Accident only; Travel accident; LTC; Medicare supplement; AD&D; Dental/Vision/Prescription; Limited.
Legal Action provision
Medicare Part A & B "Gaps"
Types of Accident & Health insurance
Return of Premium rider
14. Time extension of benefits based on "qualifying" event. 18 mth. extension if laid off or fired; 36 mth. extension if death - divorce or child leaves home.
COBRA Time Limitations
Applicant Representations vs. Warranties
Types of Accident & Health (A&H) providers
Suicide clause/provision
15. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.
Equity Indexed annuity
Law of Large Numbers
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Tax implications of Dividends - Loans & Interest
16. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.
Pure risk vs. Speculative risk
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Credit Life policy
Types of Licensed Producers
17. Price of insurance per exposure unit.
Rate (as defined by CIC)
Cost of Living Adjustment (COLA) Disability rider
Misstatement of Age/Sex provision
Employer-Administered plan
18. Facultative - case by case agreements; Automatic/Treaty - automatic acceptance of risk percentage per previous agreement.
Supplemental Major Medical plan
Variable Universal Life policy
Types of reinsurance
Parole Pardon Rule
19. Covers disabilities occurring both "on" AND "off" job; "on" job benefits paid in addition to work. comp. - if applicable (i.e. individual plan).
Payor (aka Waiver of Payor's Premium) rider
Occupational Disability policy
Permanent vs. Temporary disability
Business Continuation (aka Buy-Sell) policy
20. Benefits NOT taxable; employer-paid premiums deductible to employer; individual plans not deductible unless over 7 1/2% of adjusted gross income - then excess deductible.
Cash value
Tax implications of medical plans
Small Employer Medical Expense plan
Types of Insurers (by authorization)
21. Allows for Term policy renewal @ higher premium w/out medical exam; guarantees insurability; based on actual/attained age.
Renewability provision
Medical Savings Account (MSA) & Health Savings Account (HSA)
Reinsurance
Business Overhead Expense (BOE) Disability policy
22. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.
Types of Insurers (by ownership)
Earned vs. Unearned premium
Employer Liability
Enhanced Ordinary (aka Extraordinary) Whole Life policy
23. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.
Annuity surrender charges
Business Continuation (aka Buy-Sell) Disability policy
Medi-Cal Share Cost plan
Annuity Classifications (3 of 5): Source of income
24. Private sector (Commercial) - provides LA&H - P&C - & LTC; Public sector (Gov't) - provides flood - work. comp. - Medicare/Medicaid - Group Life (SGLI/FEGLI).
Medicare Part A (aka Hospital Insurance or HI)
Types of Insurers (by sector)
Dividend options
Permanent vs. Temporary disability
25. 'The inability to perform your OWN normal occupation or daily duties'.
Common Life Exclusions
Insurance contract characteristics (2 of 2)
Total disability (as commonly defined)
Insurability Type Conditional receipt
26. 1: parties to contract; 2: insured party or life; 3: insurable interest - if 3rd party; 4: risks insured against; 5: policy period (term); 6: premium & mode.
Valid life insurance contracts must identify...
Juvenile Life (aka Jumping Juvenile) policy
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Waiver of Premium (Waiver of Cost of Insurance) rider
27. 1: Cash (tax-free); 2: Apply to future premiums; 3: Retained by Insurer @ interest; 4: Buy Paid-up WL policy add-ons; 5: Pay-up existing policy; 6: Buy 1-yr. Term policy.
Dividend options
Common Life Exclusions
Types of hazards
Key Employee policy
28. Although death benefit is tax-free - it is included in gross estate value so federal &/or state taxes may apply to a portion in excess of fixed federal limit.
Mortality vs. Morbidity tables
Tax implications of an Estate
Medicaid/Medi-Cal
Types of reinsurance
29. Potential circumstance that could cause a loss; measured in dollars.
Types of Term Life policies
Employer Liability
Family policy
Loss exposure
30. Policy must be delivered w/ original (or copy of same) application attached.
Presumptive disability
Tax implications of an Annuity (1 of 2)
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Entire Contract provision
31. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).
Return of Cash Value rider
Social Security Benefit (Supplement) rider
Cost of Living Adjustment (COLA) Life rider
Types of Insurers (by sector)
32. 1: Straight aka Pure Life - lifetime income but no survivorship refund; 2: Life w/ Period Certain - lifetime income w/ death benefit of monthly annuity for remaining predetermined term. 3: Annuity Certain - monthly income paid for predetermined term
Types of Medical Plans
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Limited Pay Whole Life policy
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
33. Mathematical law stating the larger # of occurrences - the more predictable the losses; used to calculate premiums.
Law of Large Numbers
Annuity surrender charges
Equity Indexed annuity
Insurable interest
34. Tendency of poorer risks to seek insurance.
Adverse selection
Total disability (more restrictive definition)
Convertibility provision
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
35. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)
Accidental Death (aka Multiple Indemnity) rider
Cost of Living Adjustment (COLA) Disability rider
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Annuity Classifications (1 of 5): How premium is paid
36. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.
Life insurance policy
Plans A-L of Medical Supplement or Medigap
Medi-Cal Share Cost plan
Notice of Claim provision
37. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.
Cost of Living Adjustment (COLA) Disability rider
Annuity Classifications (5 of 5): # of lives
Viatical Settlement Provider (VSP)
Insurance contract characteristics (1 of 2)
38. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.
Fraud
Return of Premium rider
Non-Occupational Disability policy
Payment of Premium provision
39. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.
Health Reimbursement Account (HRA)
Annuity Classifications (5 of 5): # of lives
Term Life policy
Elimination (aka Waiting) period
40. Mortality is the statistical possibility of death @ each age. Morbidity is the statistical possibility & extent of disability @ each age.
Annuity Classifications (1 of 5): How premium is paid
24 Hour Coverage (CA)
Mortality vs. Morbidity tables
Renewability provision
41. Same as WL but premium low for set # yrs. - THEN premiums vary (+ or -) based on Insurer's investment returns - w/ Gmax.
Common Disability Exclusions
Medical cost containment (aka Managed care)
Indeterminate Premium Whole Life policy
Types of Insurers (miscellaneous)
42. Excludes coverage for suicide during 1st 2 yrs. ONLY but - if it does - all premiums must be returned to beneficiary.
Suicide clause/provision
Annuity Classifications (1 of 5): How premium is paid
Doctrine of Comity
Consolidated Omnibus Budget Reconciliation Act (COBRA)
43. Coverage for catastrophic loss w/ high limits - front end deductible; co-insurance (80/20%); blanket coverage; stop loss max.
Family policy
Major Medical plan
Policy loans
Renewability provision
44. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.
Renewability provision
Annuity Classifications (3 of 5): Source of income
1035 Exchange
Experience vs. Community rating in Group Health plan
45. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.
Claim Form (aka Proof of Loss Form) provision
Variable Universal Life policy
Market Value Adjusted (aka Modified Guaranteed) annuity
Revocable vs. Irrevocable beneficiary
46. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.
Types of Renewability provisions
Types of Insurers (by ownership)
Dread Disease policy
IRS Penalties for Annuities
47. War - 2 types; Suicide (1st 2 yrs.); Aviation (non-commercial); Hazardous hobbies; Criminal acts; Alcohol/Drug influenced.
Automatic Premium Loan (APL) provision
Legal Action provision
Parole Pardon Rule
Common Life Exclusions
48. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.
Medical cost containment (aka Managed care)
Palliative vs. Curative care
Types of Insurers (by domicile)
Types of Agency Authority
49. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.
Non-Occupational Disability policy
Factors that determine premium
Non-forfeiture options for WL policy
Misstatement of Age/Sex provision
50. Provides disability income during surgery recovery from life-threatening condition (& sometimes cosmetic surgery).
Age Discrimination in Employment Act (ADEA)
Incontestability clause/provision
Transplant/Cosmetic Surgery rider
Annuity surrender charges