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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. Pre-existing illness/injury; Waiting period; Elimination period; Probationary period; Benefits - Exclusions - Limitations; Underwriting reqs.
Business Overhead Expense (BOE) Disability policy
Conformity with State Statute provision
Considerations in replacing Health insurance
Policy delivery
2. Part A - Inpatient hospital deductibles vary on # of days; limited reserve days; finite benefit; 1st 3 pints blood; Part B - 20% co-payment.
24 Hour Coverage (CA)
Types of Licensed Producers
Impairment (Exclusion) rider
Medicare Part A & B "Gaps"
3. Provides 24 hr. health coverage both "on" & "off" job - but may cause coverage duplication & coordination challenges.
Annuity Classifications (3 of 5): Source of income
Tax implications of Dividends - Loans & Interest
24 Hour Coverage (CA)
Change of Occupation provision
4. Refund of 50-80% of premium (minus claims paid) every 5-10 yrs. OR age 65; expensive!
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Return of Premium rider
Loss of Earnings Test
Juvenile Life (aka Jumping Juvenile) policy
5. Expands individual WL policy to include Term Life for dependents (spouse - children - etc.).
Total disability (any-occupational definition)
Insuring clause/provision (aka Insuring Agreement)
Business Continuation (aka Buy-Sell) Disability policy
Family or Dependents rider
6. Compensates business for loss due to disability of key employee; premiums not deductible but benefits tax-free.
Exclusions to Work. Comp.
Key Employee Disability policy
Whole (aka Permanent or Straight) Life policy
Notice of Claim provision
7. Intentional deception; grounds for rescission.
Non-forfeiture options for WL policy
Employer-Administered plan
Medical Savings Account (MSA) & Health Savings Account (HSA)
Fraud
8. 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.
Health Insurance Portability and Accountability Act (HIPAA)
Medicare Part D
Dividend options
Tax implications of an Annuity (1 of 2)
9. Provides professional services - rehabilitation - training/re-training & related costs to assist Insured in returning to work.
Types of Medical Plans
Dividends
Accidental Death & Dismemberment (AD&D) Disability rider
Rehabilitation rider
10. Provides supplemental coverage for physician/surgeon fees if enrolled (during enrollment period ONLY) & pay monthly premium w/ deductible and co-insurance.
Settlement options for Life policy (2 of 2)
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Employee Retirement Income Security Act (ERISA)
Penalties for violating AIDS/HIV privacy laws
11. Death benefit determined by Insured's financial goals & needs (minus assets).
Needs approach (most common)
Residual disability rider
Health Insurance Portability and Accountability Act (HIPAA)
Major Medical plan
12. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).
Indeterminate Premium Whole Life policy
Loss of Earnings Test
Proof of Loss provision
Tax implications of an Annuity (1 of 2)
13. Receipt whereby coverage incepts immediately upon submission of full consideration - unless declined & premium refunded.
Binding receipt (aka Temporary Insurance Agreement)
Tax implications of Death Benefit & Cash Value
Equity Index Whole Life policy
Variable Universal Life policy
14. Covers disabilities occurring ONLY "off" job; benefits do not overlap work. comp. (i.e. Group plan).
24 Hour Coverage (CA)
Retrocession
Underwriting risk categories
Non-Occupational Disability policy
15. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.
Parole Pardon Rule
Annuity Classifications (1 of 5): How premium is paid
Human Life Value approach
Adjustable Whole Life policy
16. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.
Phases of an annuity
Accidental Death & Dismemberment (AD&D) Life policy
Exclusions to Work. Comp.
Binding receipt (aka Temporary Insurance Agreement)
17. Treating or mitigating loss exposures through 1: avoidance; 2: retention (deductibles); 3: sharing; 4: reduction; or 5: transfer.
Whole (aka Permanent or Straight) Life policy
Risk management
Trial Application (aka Request for Offer)
7 Pay Test
18. Federal law which prohibits companies w/ 15+ employees from decreasing coverage benefits for women affected by pregnancy or childbirth.
Business Overhead Expense (BOE) Disability policy
Medicare Part D
Dividends
Civil Rights/Pregnancy Discrimination Act
19. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.
Rehabilitation rider
Dental Plan
Revocable vs. Irrevocable beneficiary
Residual disability rider
20. Covers disabilities occurring both "on" AND "off" job; "on" job benefits paid in addition to work. comp. - if applicable (i.e. individual plan).
Incontestability clause/provision
Tax implications of Death Benefit & Cash Value
Legal Action provision
Occupational Disability policy
21. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Key Employee policy
Non-forfeiture options for WL policy
Phases of an annuity
Modified Endowment Contract (MEC)
22. A lapsed policy may be reinstated if not longer than 3-5 yrs. - & proof of insurability re-established - & back premiums + interest paid.
Annuity surrender charges
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Reinstatement provision
Types of Accident & Health insurance
23. Peril is the CAUSE of loss. Hazard is a condition that increases LIKELIHOOD of loss.
Peril vs. Hazard
Life insurance policy
Cost of Living Adjustment (COLA) Disability rider
Trusts
24. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.
Exclusions to Work. Comp.
Primary Insurance Amount (PIA)
Law of Large Numbers
Credit Life policy
25. If Insured & primary beneficiary die due to same act (w/in 14 days) - primary assumed 1st to die & contingent beneficiary paid death benefit.
Modified Endowment Contract (MEC)
Common Disaster (Simultaneous Death Act) clause/provision
Rescission
Common Accident provision
26. Provides % of monthly income benefit if Insured becomes disabled due to illness or accident.
Policy loans
Mortality vs. Morbidity tables
Disability Income policy
Permanent vs. Temporary disability
27. 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.
Annuity Classifications (5 of 5): # of lives
Trusts
7 Pay Test
Health Insurance Portability and Accountability Act (HIPAA)
28. Policy owner must notify Insurer of loss either in writing - in person or by phone w/in 20 days.
Return of Cash Value rider
Insurance contract characteristics (1 of 2)
Types of Insurers (by sector)
Notice of Claim provision
29. Disability policy rider covering "the inability to perform some - but not all of your duties"; pays max. 50% of disability benefit for up to 6 mths.
Common Accident provision
Departments of an Insurer
Partial disability rider
Levels of Long Term Care provided
30. 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.
Types of Term Life policies
Employer-Administered plan
Business Continuation (aka Buy-Sell) Disability policy
Earned vs. Unearned premium
31. Funding mechanism whereby employer & employee share cost of premium. Upon death - benefit is shared between employer & beneficiary.
Medi-Cal Share Cost plan
Tax implications of Dividends - Loans & Interest
Split Dollar Plan
Waiver of Premium (Waiver of Cost of Insurance) rider
32. Govt. organization providing health care benefits for dependents of military personnel.
Types of hazards
Joint Life (aka "First to die") policy
Market Value Adjusted (aka Modified Guaranteed) annuity
CHAMPUS (aka TriCare)
33. Fraternal - non-profit - members only; Reciprocal - unincorp'd org. - members insure each other; Lloyd's Assoc. - groups sharing risks; Surplus lines - special market risks.
Key Employee policy
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Valid life insurance contracts must identify...
Types of Insurers (miscellaneous)
34. Guaranteed min. interest rate on cash value buildup but possible higher rate if short-term investment returns higher than expected.
Variable Life policy (1 of 2)
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Business Overhead Expense (BOE) Disability policy
Notice of Claim provision
35. Allows for Term policy renewal @ higher premium w/out medical exam; guarantees insurability; based on actual/attained age.
Renewability provision
Term Life policy
Waiver of Premium provision
Medical Savings Account (MSA) & Health Savings Account (HSA)
36. WL policy covering 2 or more Insureds but ONLY payable upon death of LAST Insured - generally low premium but high death benefit.
Automatic Premium Loan (APL) provision
Common Accident provision
Modified Premium Whole Life policy
Survivorship (aka "Last to die") policy
37. Intentional OR unintentional failure to disclose material underwriting facts that should have been disclosed; grounds for policy rescission.
Exclusions to Work. Comp.
Parole Pardon Rule
Concealment
Medi-Cal Share Cost plan
38. Potential circumstance that could cause a loss; measured in dollars.
Types of reinsurance
Return of Premium rider
Loss exposure
Automatic Premium Loan (APL) provision
39. Benefits automatically increase annually based on inflationary index (i.e. Consumer Price Index) OR flat rate (5% max.).
Common Disaster (Simultaneous Death Act) clause/provision
Accidental Death (aka Multiple Indemnity) rider
Medical Savings Account (MSA) & Health Savings Account (HSA)
Cost of Living Adjustment (COLA) Disability rider
40. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).
Policy loans
Cost of Living Adjustment (COLA) Life rider
Peril vs. Hazard
Types of Renewability provisions
41. 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.
Types of Accident & Health (A&H) providers
Insurable interest
Free Look provision
COBRA Time Limitations
42. Qualified Annuity - Tax-deductible contributions & tax-deferred growth but fully taxable w/drawals.
Tax implications of an Annuity (1 of 2)
Total disability (as commonly defined)
Annuity
Disability Income policy
43. Price of insurance per exposure unit.
Types of reinsurance
Settlement options for Life policy (1 of 2)
Claim Form (aka Proof of Loss Form) provision
Rate (as defined by CIC)
44. Insured can seek legal action against Insurer for denial of claim only after 60 days and up to 3 yrs. after providing proof of loss.
Legal Action provision
Insurability Type Conditional receipt
Medicare Part A (aka Hospital Insurance or HI)
1035 Exchange
45. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.
Automatic Premium Loan (APL) provision
Trial Application (aka Request for Offer)
Requirements to sell variable life products
Health Maintenance Organization (HMO)
46. Unilateral - Insurer provides contract; Adhesion - parties must adhere to terms; Aleatory - benefits may not inure equally.
Insurance contract characteristics (1 of 2)
Single Pay Whole Life policy
Total disability (more restrictive definition)
Annuity Classifications (3 of 5): Source of income
47. 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
Risk management
Tax implications of Dividends - Loans & Interest
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Variable Life policy (1 of 2)
48. Upon death - death benefit is paid + the aggregate of premiums paid to date; add-on to Term policy ONLY.
Whole (aka Permanent or Straight) Life policy
Payment of Premium provision
Return of Premium rider
Small Employer Medical Expense plan
49. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.
Elimination (aka Waiting) period
Workers' Compensation insurance
Family Income policy
Insurance contract characteristics (1 of 2)
50. Reappearance of disability w/in 6 mth. period after "recovery" from same disability is considered recurrence - not new disability.
Considerations in replacing Health insurance
Types of reinsurance
Health Insurance Portability and Accountability Act (HIPAA)
Recurrent disability clause/provision