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CA Life Agent Exam

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. If Insured changes to: more hazardous job - benefits reduced; less hazardous job - premiums reduce.






2. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.






3. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.






4. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.






5. Guaranteed min. interest rate on cash value buildup but possible higher rate if short-term investment returns higher than expected.






6. Facultative - case by case agreements; Automatic/Treaty - automatic acceptance of risk percentage per previous agreement.






7. Expands individual WL policy to include Term Life for dependents (spouse - children - etc.).






8. Coverage for catastrophic loss w/ high limits - front end deductible; co-insurance (80/20%); blanket coverage; stop loss max.






9. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.






10. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.






11. 1: Tax-free lump sum; 2: Monthly pay-outs for fixed time; 3: Fixed monthly payments until depleted.






12. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.






13. Compensates business for loss due to disability of key employee; premiums not deductible but benefits tax-free.






14. Same as Universal Life but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.






15. Potential circumstance that could cause a loss; measured in dollars.






16. Waives premium upon disability of Insured until return to work; disability must persist for 6 mths. or longer. Cash value & dividends not affected.






17. Temp. coverage for set duration w/ death benefit ONLY (no cash value) - offers largest $ for lowest premium; renewable; convertible.






18. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.






19. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.






20. Representation - oral or written statement made to best of knowledge or belief; Warranty - statement guaranteed/presumed/understood to be true.






21. Policy provisions must conform to state regulations where policy is sold.






22. Dependent children are covered until 19 or 23 (full-time student only) or until self-sufficient (if handicapped).






23. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).






24. Agents - represent Insurer; Brokers - represent themselves & Insured; Solicitors - represent one agent to solicit leads.






25. Level - fixed death benefit - premium fixed until renewal; Decreasing - death benefit decreases over term - premium fixed until renewal; Increasing - death benefit increases over term - premium fixed until renewal.






26. Treating or mitigating loss exposures through 1: avoidance; 2: retention (deductibles); 3: sharing; 4: reduction; or 5: transfer.






27. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.






28. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.






29. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.






30. Written policy terms supersede oral statements made prior to policy issue.






31. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.






32. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.






33. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").






34. An attempt to contain costs by employing various strategies - including wellness programs - preventative testing - outpatient & alternative procedures.






35. If Insured & primary beneficiary die due to same act (w/in 14 days) - primary assumed 1st to die & contingent beneficiary paid death benefit.






36. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.






37. Grows @ fixed min. interest rate but w/ possible higher rate tied to equity index (i.e S&P Equity Index) appreciation; gains shared w/ Insurer.






38. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.






39. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.






40. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).






41. Combination of Basic Medical & Major Medical in one policy; Basic pays 1st - then Major Medical w/ corridor deductible.






42. Provides coverage for specific disease(s) - such as cancer or leukemia.






43. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.






44. Upon death - death benefit is paid + the aggregate of premiums paid to date; add-on to Term policy ONLY.






45. Intentional deception; grounds for rescission.






46. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.






47. Allows Insured to increase death benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age.






48. Reappearance of disability w/in 6 mth. period after "recovery" from same disability is considered recurrence - not new disability.






49. Policy owner must notify Insurer of loss either in writing - in person or by phone w/in 20 days.






50. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.







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