Test your basic knowledge |

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. Death benefit is NOT taxable. Cash value grows tax-deferred but cost basis (base premium) is not taxable - only interest is.






2. Covers disabilities occurring both "on" AND "off" job; "on" job benefits paid in addition to work. comp. - if applicable (i.e. individual plan).






3. Excludes coverage for suicide during 1st 2 yrs. ONLY but - if it does - all premiums must be returned to beneficiary.






4. Benefits automatically increase annually based on inflationary index (i.e. Consumer Price Index) OR flat rate (5% max.).






5. A company providing lump sum buyout (50-90% of total) of Life policy; becomes owner & beneficiary & assumes premium payments; usually terminally ill viator.






6. Prepaid med. benefits for members ONLY w/ approved primary care M.D. (HMO employee); focus on preventative care; low co-pay.






7. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.






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






9. 1: Req. - unless self-employed; 2: 7-day wait for disability benefits; 3: Premium based on ex-mod; 4: Rates approved by CDI; 5: to sell - must satisfy education reqs.






10. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.






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






12. Excludes coverage for specific injury/illness either temporarily or permanently in order to eliminate pre-existing condition.






13. Responsible adult trustee designated to manage death benefits for minor child beneficiary until adulthood.






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






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






16. Federally-funded but state-run program for truly indigent individuals & families providing medical care at Federal clinic.






17. Allows Term policy conversion to Permanent policy w/out medical exam; must be identical or lower death benefit; based on either attained OR original age.






18. Funding mechanism whereby employer & employee share cost of premium. Upon death - benefit is shared between employer & beneficiary.






19. Waives premium on Life policy for minor child until age 21 in event premium payor dies or becomes disabled.

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20. Agreement - Offer & acceptance; Consideration - application + premium; Legal capacity - licensed &/or competent; Legal purpose - public good.






21. Upon death - death benefit is paid + the aggregate of cash value accumulated to date; add-on to WL policy ONLY.






22. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.






23. Prepaid med. benefits for members w/ approved primary care M.D. (independent); low co-pay; non-PPO M.D. can be used at higher cost.






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






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






26. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.






27. Privately-provided or Medicare-provided (if no private carrier) prescription drug plans for qualified individuals but w/ premium - deductible & co-pay.






28. Intentional OR unintentional failure to disclose material underwriting facts that should have been disclosed; grounds for policy rescission.






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






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






31. Federal law allows employees/their dependents to continue group benefits w/in 60 days after termination (if employer has 20+ employees); Insured pays premium @ 102% of group cost.






32. Federal law which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.






33. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.






34. Receipt whereby coverage incepts immediately upon submission of full consideration - unless declined & premium refunded.






35. Peril is the CAUSE of loss. Hazard is a condition that increases LIKELIHOOD of loss.






36. Qualified Annuity - Tax-deductible contributions & tax-deferred growth but fully taxable w/drawals.






37. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.






38. Beneficiary has right to leave death benefits / Insurer to protect $ from creditors; interest (taxable) paid on retained funds.






39. War - 2 types; Suicide (1st 2 yrs.); Aviation (non-commercial); Hazardous hobbies; Criminal acts; Alcohol/Drug influenced.






40. 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.






41. 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.






42. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.






43. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.






44. Both Contributory & Non-contributory Group policies are deductible to employer (not employee) but benefits are taxable. Individual policy premium is NOT deductible but benefit is received tax-free.






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






46. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).






47. Physical - slippery floor; Moral - dishonest acts; Morale - carelessness or recklessness.






48. Intentional deception; grounds for rescission.






49. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.






50. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.