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Test your basic knowledge |
CA Life Agent Exam
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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: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.
Factors that determine premium
Loss exposure
COBRA Time Limitations
Non-Occupational Disability policy
2. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.
Settlement options for Life policy (1 of 2)
Single Pay Whole Life policy
Types of Insurers (by sector)
Medicare Part A (aka Hospital Insurance or HI)
3. Receipt whereby coverage incepts ONLY after underwriting approval.
Permanent vs. Temporary disability
Free Look provision
Tax implications of an Annuity (1 of 2)
Approval Type Conditional receipt
4. Same as WL but w/ Level Term rider; upon death - pays monthly income for FULL term AFTER which pays full death benefit.
Family Income policy
Reinsurance
Family Maintenance policy
Notice of Claim provision
5. Upon death - death benefit is paid + the aggregate of premiums paid to date; add-on to Term policy ONLY.
Major Medical plan
Retrocession
Return of Premium rider
Family policy
6. Beneficiary has right to leave death benefits / Insurer to protect $ from creditors; interest (taxable) paid on retained funds.
Whole (aka Permanent or Straight) Life policy
Spendthrift provision
Single Pay Whole Life policy
Family or Dependents rider
7. Provides professional services - rehabilitation - training/re-training & related costs to assist Insured in returning to work.
Palliative vs. Curative care
Dread Disease policy
Juvenile Life (aka Jumping Juvenile) policy
Rehabilitation rider
8. Info already known; Info that should have been known; Waived info; Irrelevant info.
Types of Licensed Producers
Concealment exceptions
Employer Liability
Renewability provision
9. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.
Fraud
Automatic Premium Loan (APL) provision
Requirements to sell variable life products
Types of Renewability provisions
10. Monthly; Quarterly; Semi-annually; Annually (cheapest due to less admin cost).
Premium modes
Applicant Representations vs. Warranties
Rate (as defined by CIC)
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
11. An unintentional mistake committed by an insurance representative; may be covered by E&O insurance.
Variable Life policy (1 of 2)
Errors & Omissions (E&O)
Preferred Provider Organization (PPO)
Requirements to sell variable life products
12. 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
Exclusions to Work. Comp.
Medicare Part D
Payment of Premium provision
Variable Life policy (1 of 2)
13. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.
Types of Insurers (by ownership)
Total disability (any-occupational definition)
Long Term Care (LTC) policy
Modified Endowment Contract (MEC)
14. Provides disability income during surgery recovery from life-threatening condition (& sometimes cosmetic surgery).
Transplant/Cosmetic Surgery rider
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Return of Premium rider
Relation of Earnings to Insurance provision
15. War - 2 types; Suicide (1st 2 yrs.); Aviation (non-commercial); Hazardous hobbies; Criminal acts; Alcohol/Drug influenced.
AIDS/HIV discrimination
COBRA Time Limitations
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Common Life Exclusions
16. Funding mechanism whereby employer & employee share cost of premium. Upon death - benefit is shared between employer & beneficiary.
Fraud
Conformity with State Statute provision
Errors & Omissions (E&O)
Split Dollar Plan
17. Same as WL but cash value increases @ current interest rates (not set); premium can start low or high & may change.
Current Assumption (aka Interest-Sensitive) Whole Life policy
Transplant/Cosmetic Surgery rider
Factors that determine premium
Flexible Spending Account (FSA)
18. Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling - stock investment).
Needs approach (most common)
CA Work. Comp. Statutes
Pure risk vs. Speculative risk
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
19. Provides supplemental coverage for physician/surgeon fees if enrolled (during enrollment period ONLY) & pay monthly premium w/ deductible and co-insurance.
Key Employee Disability policy
CHAMPUS (aka TriCare)
Limited Pay Whole Life policy
Medicare Part B (aka Supplemental Medical Insurance or SMI)
20. Grows @ fixed interest rate for set term but cash value may adjust to prevailing rate (+ or -) if fully surrendered before term ends; % w/drawal ok.
Market Value Adjusted (aka Modified Guaranteed) annuity
Considerations in replacing Health insurance
Dividends
Impairment (Exclusion) rider
21. Fraternal - non-profit - members only; Reciprocal - unincorp'd org. - members insure each other; Lloyd's Assoc. - groups sharing risks; Surplus lines - special market risks.
Types of Insurers (miscellaneous)
Total disability (as commonly defined)
Types of Accident & Health (A&H) providers
Underwriting risk categories
22. Allows Insured to increase death benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age.
Occupational Disability policy
Guaranteed Insurability Life rider
Equity Indexed annuity
Time Limit on Certain Defenses provision
23. Provides for continued operation of business if partner dies - by allowing surviving partner(s) to buy deceased partner's interest in business.
Accidental Death (aka Multiple Indemnity) rider
Dread Disease policy
Business Continuation (aka Buy-Sell) policy
Valid life insurance contracts must identify...
24. Privately-provided or Medicare-provided (if no private carrier) prescription drug plans for qualified individuals but w/ premium - deductible & co-pay.
Legal Action provision
Modified Endowment Contract (MEC)
Endowment Life policy
Medicare Part D
25. Process which prevents claim denial as a result of false statement or promise (made by Insurer) - which was relied upon by Insured.
Misstatement of Age/Sex provision
Parole Pardon Rule
Change of Occupation provision
Estoppel
26. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.
Relation of Earnings to Insurance provision
Factors that determine premium
Tax implications of Death Benefit & Cash Value
Payment of Premium provision
27. Provides benefit during Social Security "black-out" period - up to 1 yr.
Loss of Earnings Test
Convertibility provision
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Social Security Benefit (Supplement) rider
28. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.
24 Hour Coverage (CA)
Types of Agency Authority
Accidental Death (aka Multiple Indemnity) rider
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
29. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.
Family Maintenance policy
Term Life policy
Parole Pardon Rule
Primary Insurance Amount (PIA)
30. Potential circumstance that could cause a loss; measured in dollars.
Limited Pay Whole Life policy
Types of Insurers (by authorization)
Common Disability Exclusions
Loss exposure
31. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.
Departments of an Insurer
Term Life policy
Phases of an annuity
Experience vs. Community rating in Group Health plan
32. 'The inability to perform your OWN normal occupation or daily duties'.
Total disability (as commonly defined)
Whole (aka Permanent or Straight) Life policy
Age Discrimination in Employment Act (ADEA)
Viatical Settlement Provider (VSP)
33. 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.
Loss of Earnings Test
Plans A-L of Medical Supplement or Medigap
Annuity surrender charges
Parole Pardon Rule
34. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Loss exposure
Key Employee policy
Rescission
Indemnify
35. Temp. coverage for set duration w/ death benefit ONLY (no cash value) - offers largest $ for lowest premium; renewable; convertible.
Insurability Type Conditional receipt
Misstatement of Age/Sex provision
Term Life policy
Insuring clause/provision (aka Insuring Agreement)
36. Provides 24 hr. health coverage both "on" & "off" job - but may cause coverage duplication & coordination challenges.
Accidental Death (aka Multiple Indemnity) rider
Payment of Premium provision
24 Hour Coverage (CA)
Small Employer Medical Expense plan
37. Physical - slippery floor; Moral - dishonest acts; Morale - carelessness or recklessness.
Types of Medical Plans
Common Disaster (Simultaneous Death Act) clause/provision
Types of hazards
Annuity Classifications (5 of 5): # of lives
38. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.
Automatic Premium Loan (APL) provision
Notice of Claim provision
Cash value
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
39. Allows policy owner to w/draw set % of death benefit upon verification of terminal illness w/ expectancy 12-24 mths.; generally tax-free.
Underwriting risk categories
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Tax implications of an Estate
Payment of Premium provision
40. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.
Proof of Loss provision
Equity Index Whole Life policy
Supplemental Major Medical plan
Requirements to sell variable life products
41. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).
Point of Service plan
Types of Licensed Producers
Types of Insurers (by authorization)
Consolidated Omnibus Budget Reconciliation Act (COBRA)
42. Dependent children are covered until 19 or 23 (full-time student only) or until self-sufficient (if handicapped).
Waiver of Premium provision
Dependent coverage
Elements to contract
Common Disaster (Simultaneous Death Act) clause/provision
43. 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.
Convertibility provision
Tax implications of an Estate
Medicaid/Medi-Cal
Incontestability clause/provision
44. No deductible coverage for: daily room/board; ancillary costs; surgeon &/or physician expense (for added premium).
Reinsurance
Loss of Earnings Test
Basic Medical plan
Time Limit on Certain Defenses provision
45. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Key Employee policy
Proof of Loss provision
Primary Insurance Amount (PIA)
46. Written policy terms supersede oral statements made prior to policy issue.
Relation of Earnings to Insurance provision
Parole Pardon Rule
Elements to contract
Reinsurance
47. A company providing lump sum buyout (50-90% of total) of Life policy; becomes owner & beneficiary & assumes premium payments; usually terminally ill viator.
Types of Licensed Producers
Dread Disease policy
1035 Exchange
Viatical Settlement Provider (VSP)
48. Intentional OR unintentional failure to disclose material underwriting facts that should have been disclosed; grounds for policy rescission.
Comprehensive Major Medical plan
Time Limit on Certain Defenses provision
Common Disaster (Simultaneous Death Act) clause/provision
Concealment
49. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Accidental Death & Dismemberment (AD&D) Life policy
Convertibility provision
Insuring clause/provision (aka Insuring Agreement)
Family or Dependents rider
50. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Group Disability plan
Equity Index Whole Life policy
Human Life Value approach
Limited Pay Whole Life policy
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