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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. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.
Business Continuation (aka Buy-Sell) policy
24 Hour Coverage (CA)
Loss exposure
Levels of Long Term Care provided
2. Allows policy owner to w/draw set % of death benefit upon verification of terminal illness w/ expectancy 12-24 mths.; generally tax-free.
Settlement options for Life policy (2 of 2)
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Types of Insurers (by sector)
Variable Universal Life policy
3. 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.
Term Life policy
Viatical Settlement Provider (VSP)
Health Insurance Portability and Accountability Act (HIPAA)
Insuring clause/provision (aka Insuring Agreement)
4. Govt. organization providing health care benefits for dependents of military personnel.
Insurance contract characteristics (1 of 2)
Medicare Part B (aka Supplemental Medical Insurance or SMI)
CHAMPUS (aka TriCare)
Claim Form (aka Proof of Loss Form) provision
5. 'The inability to perform ANY gainful occupation'.
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
7 Pay Test
Total disability (any-occupational definition)
Tax implications of an Annuity (1 of 2)
6. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.
Cash value
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Return of Premium rider
Long Term Care (LTC) policy
7. PURELY employer-funded account to reimburse employees for qualified medical expenses not covered by group health plan.
Health Reimbursement Account (HRA)
Cost of Living Adjustment (COLA) Life rider
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Earned vs. Unearned premium
8. Waives premium on Life policy for minor child until age 21 in event premium payor dies or becomes disabled.
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9. Info already known; Info that should have been known; Waived info; Irrelevant info.
Insurable interest
Waiver of Premium provision
Concealment exceptions
Modified Endowment Contract (MEC)
10. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.
Accidental Death & Dismemberment (AD&D) Disability rider
Approval Type Conditional receipt
Business Overhead Expense (BOE) Disability policy
Levels of Long Term Care provided
11. Monthly; Quarterly; Semi-annually; Annually (cheapest due to less admin cost).
Premium modes
Types of Licensed Producers
Point of Service plan
Blackout Period
12. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.
Comprehensive Major Medical plan
Estoppel
Experience vs. Community rating in Group Health plan
Trusts
13. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.
Law of Large Numbers
Employee Retirement Income Security Act (ERISA)
Notice of Claim provision
Primary Insurance Amount (PIA)
14. Savings account for medical expenses; Tax-deductible contributions; tax-deferred growth; tax-free for qualified use; taxable for non-qualified use.
Tax implications of an Estate
Medical Savings Account (MSA) & Health Savings Account (HSA)
Tax implications of Dividends - Loans & Interest
Point of Service plan
15. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).
Suicide clause/provision
Loss of Earnings Test
Considerations in replacing Health insurance
Change of Occupation provision
16. Same as Universal Life but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
COBRA Time Limitations
Types of Renewability provisions
Dental Plan
Variable Universal Life policy
17. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).
Reinsurance
Family or Dependents rider
Insurable interest
Conformity with State Statute provision
18. Primary - if 2 or more - equally shared; Contingent (Secondary) - only if primary dead; Tertiary - only if both primary & secondary dead. If none listed - goes to estate.
Risk management
Survivorship (aka "Last to die") policy
Loss of Earnings Test
Beneficiary provisions
19. Identical to Incontestable Clause in Life policy.
Suicide clause/provision
Time Limit on Certain Defenses provision
1035 Exchange
7 Pay Test
20. Allows for Term policy renewal @ higher premium w/out medical exam; guarantees insurability; based on actual/attained age.
Renewability provision
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Common Disaster (Simultaneous Death Act) clause/provision
Variable Universal Life policy
21. Mandatory 100% employer-funded coverage for injuries/illnesses occurring "on" job; full-time employees only; exclusive remedy. Provides: 1: unlimited medical benefit; 2: survivor income replacement & funeral ($5 -000 max.); 3: disability benefit @ 66
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22. Intentional OR unintentional failure to disclose material underwriting facts that should have been disclosed; grounds for policy rescission.
Exclusions for Major Medical plan
Concealment
Key Employee policy
Annuity Classifications (2 of 5): When benefits begin
23. 4: Funds retained by Insurer until w/drawn - interest ONLY paid monthly (taxable); 5: Paid-up immediate annuity.
Return of Premium rider
Preferred Provider Organization (PPO)
Medicare Part C (aka Medicare Advantage)
Settlement options for Life policy (2 of 2)
24. Allows for use of HMO/PPO or other private carrier to provide expanded benefits @ additional premium & if enrolled in BOTH Parts A & B.
Point of Service plan
Medicare Part C (aka Medicare Advantage)
Modified Endowment Contract (MEC)
Reinstatement provision
25. Req. by CA statute & may provide workers coverage for action-over claims.
Point of Service plan
Employer Liability
Waiver of Premium provision
Workers' Compensation insurance
26. No coverage for injuries while: 1: @ voluntary social event; 2: self-inflicted (intentional); 3: under alcohol/drug influence; 4: committing criminal act; 5: aggressor in workplace fight; 6: participating in athletic event (non-pro. athletes) 7: par
Conformity with State Statute provision
Valid life insurance contracts must identify...
Policy loans
Exclusions to Work. Comp.
27. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.
Trial Application (aka Request for Offer)
Accidental Death (aka Multiple Indemnity) rider
Revocable vs. Irrevocable beneficiary
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
28. Covers disabilities occurring both "on" AND "off" job; "on" job benefits paid in addition to work. comp. - if applicable (i.e. individual plan).
Needs approach (most common)
Payor (aka Waiver of Payor's Premium) rider
Levels of Long Term Care provided
Occupational Disability policy
29. Domestic - within home state; Foreign - outside home state; Alien - outside home country.
Health Reimbursement Account (HRA)
Whole (aka Permanent or Straight) Life policy
Types of Insurers (by domicile)
Types of Insurers (miscellaneous)
30. Same as Term Life but provides living benefit (endowment) to policy owner if Insured survives entire term.
Endowment Life policy
Types of Insurers (miscellaneous)
Viatical Settlement Provider (VSP)
Earned vs. Unearned premium
31. A company providing lump sum buyout (50-90% of total) of Life policy; becomes owner & beneficiary & assumes premium payments; usually terminally ill viator.
Viatical Settlement Provider (VSP)
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Insurance contract characteristics (2 of 2)
Comprehensive Major Medical plan
32. Available for any reason up to full cash value @ fixed (max 8%) OR variable interest rate; loan $ + interest deducted from benefit @ death.
Policy loans
Underwriting risk categories
Insurance contract characteristics (1 of 2)
Endowment Life policy
33. Mortality is the statistical possibility of death @ each age. Morbidity is the statistical possibility & extent of disability @ each age.
Mortality vs. Morbidity tables
Permanent vs. Temporary disability
IRS Penalties for Annuities
Dependent coverage
34. Excludes coverage for specific injury/illness either temporarily or permanently in order to eliminate pre-existing condition.
Legal Action provision
CA Work. Comp. Statutes
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Impairment (Exclusion) rider
35. Coverage for catastrophic loss w/ high limits - front end deductible; co-insurance (80/20%); blanket coverage; stop loss max.
Major Medical plan
Types of Insurers (miscellaneous)
Spendthrift provision
Return of Premium rider
36. Policy must be delivered w/ original (or copy of same) application attached.
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Long Term Care (LTC) policy
Annuity Classifications (2 of 5): When benefits begin
Entire Contract provision
37. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.
Modified Premium Whole Life policy
Pure risk vs. Speculative risk
Automatic Premium Loan (APL) provision
Employer Liability
38. An attempt to contain costs by employing various strategies - including wellness programs - preventative testing - outpatient & alternative procedures.
Medical cost containment (aka Managed care)
Adverse selection
Tax implications of an Estate
Revocable vs. Irrevocable beneficiary
39. Receipt whereby coverage incepts conditionally upon submission of full consideration and that all underwriting reqs. are met.
Settlement options for Life policy (1 of 2)
Adjustable Whole Life policy
Insurability Type Conditional receipt
Annuity Classifications (5 of 5): # of lives
40. 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.
Limited Pay Whole Life policy
Plans A-L of Medical Supplement or Medigap
Underwriting risk categories
Cross Purchase Plan
41. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.
Misstatement of Age/Sex provision
Cross Purchase Plan
Elements to contract
Concealment
42. Non-qualified Annuity - Non-deductible contributions & tax-deferred growth. At pay-out - tax-free principal but taxable growth.
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Tax implications of an Annuity (1 of 2)
Partial disability rider
Doctrine of Comity
43. Same as WL but premium low for set # yrs. - THEN premiums vary (+ or -) based on Insurer's investment returns - w/ Gmax.
Indeterminate Premium Whole Life policy
Types of Agency Authority
IRS Penalties for Annuities
Tax implications of an Annuity (1 of 2)
44. Physical - slippery floor; Moral - dishonest acts; Morale - carelessness or recklessness.
Tax implications of Disability policy
Types of hazards
Graded Premium Whole Life policy
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
45. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.
Human Life Value approach
Indemnify
Modified Endowment Contract (MEC)
Approval Type Conditional receipt
46. Permanent disability due to total loss of sight - hearing - speech or use of 2 + limbs; benefits paid even while continuing to work.
Presumptive disability
Experience vs. Community rating in Group Health plan
Occupational Disability policy
Waiver of Premium (Waiver of Cost of Insurance) rider
47. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.
Annuity Classifications (3 of 5): Source of income
Business Continuation (aka Buy-Sell) Disability policy
Waiver of Premium (Waiver of Cost of Insurance) rider
Comprehensive Major Medical plan
48. Federal law which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.
Variable Universal Life policy
Age Discrimination in Employment Act (ADEA)
Trusts
Parole Pardon Rule
49. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Group Disability plan
Occupational Disability policy
Waiver of Premium provision
Common Disaster (Simultaneous Death Act) clause/provision
50. Beneficiary has right to leave death benefits / Insurer to protect $ from creditors; interest (taxable) paid on retained funds.
Small Employer Medical Expense plan
Spendthrift provision
Levels of Long Term Care provided
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)