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Test your basic knowledge |
CA Life Agent Exam
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Subject
:
certifications
Instructions:
Answer 50 questions in 15 minutes.
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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. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.
Medicare Supplement or Medigap policy
Claim Form (aka Proof of Loss Form) provision
Viatical Settlement Provider (VSP)
Types of hazards
2. Waives premium on Life policy for minor child until age 21 in event premium payor dies or becomes disabled.
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3. Unilateral - Insurer provides contract; Adhesion - parties must adhere to terms; Aleatory - benefits may not inure equally.
Types of Term Life policies
Recurrent disability clause/provision
Employee Retirement Income Security Act (ERISA)
Insurance contract characteristics (1 of 2)
4. Guaranteed min. interest rate on cash value buildup but possible higher rate if short-term investment returns higher than expected.
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Family or Dependents rider
Annuity Classifications (3 of 5): Source of income
Penalties for violating AIDS/HIV privacy laws
5. 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)
Loss exposure
Cash value
Spendthrift provision
6. Same as Term Life but provides living benefit (endowment) to policy owner if Insured survives entire term.
Presumptive disability
Return of Premium rider
Endowment Life policy
Small Employer Medical Expense plan
7. 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.
Types of hazards
Major Medical plan
Health Insurance Portability and Accountability Act (HIPAA)
Mortality vs. Morbidity tables
8. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Types of Accident & Health (A&H) providers
Key Employee policy
Convertibility provision
Primary Insurance Amount (PIA)
9. Agreement - Offer & acceptance; Consideration - application + premium; Legal capacity - licensed &/or competent; Legal purpose - public good.
Elements to contract
Variable Life policy (1 of 2)
Supplemental Major Medical plan
Annuity Classifications (3 of 5): Source of income
10. Group plan initially self-funded by employer (like SIR); after which - group plan Insurer covers (up to policy limit); requires TPA.
Medicare Part C (aka Medicare Advantage)
Market Value Adjusted (aka Modified Guaranteed) annuity
Types of Insurers (miscellaneous)
Employer-Administered plan
11. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Factors that determine premium
Estoppel
Variable Life policy (2 of 2)
12. Funding mechanism whereby employer & employee share cost of premium. Upon death - benefit is shared between employer & beneficiary.
Dread Disease policy
Age Discrimination in Employment Act (ADEA)
Split Dollar Plan
CA Work. Comp. Statutes
13. Must be delivered in person or by certified - registered or 1st-class mail w/ signature - unless waived by Insurance Commissioner.
Family Maintenance policy
Suicide clause/provision
Policy delivery
Common Disaster (Simultaneous Death Act) clause/provision
14. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.
Primary Insurance Amount (PIA)
Law of Large Numbers
Types of Accident & Health (A&H) providers
Family Maintenance policy
15. 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.
Trial Application (aka Request for Offer)
COBRA Time Limitations
Tax implications of an Annuity (1 of 2)
Social Security Benefit (Supplement) rider
16. Intentional OR unintentional failure to disclose material underwriting facts that should have been disclosed; grounds for policy rescission.
Revocable vs. Irrevocable beneficiary
Concealment
Automatic Premium Loan (APL) provision
Permanent vs. Temporary disability
17. Combination of Basic Medical & Major Medical in one policy; Basic pays 1st - then Major Medical w/ corridor deductible.
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Automatic Premium Loan (APL) provision
Comprehensive Major Medical plan
Blue Cross/Blue Shield
18. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.
Types of Insurers (by domicile)
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Entire Contract provision
Cash value
19. 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
Beneficiary provisions
Exclusions to Work. Comp.
Types of Accident & Health (A&H) providers
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
20. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.
Common Disability Exclusions
Medicare Supplement or Medigap policy
Current Assumption (aka Interest-Sensitive) Whole Life policy
Payment of Premium provision
21. 'The inability to perform ANY gainful occupation'.
Applicant Representations vs. Warranties
Payor (aka Waiver of Payor's Premium) rider
Supplemental Major Medical plan
Total disability (any-occupational definition)
22. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.
Cross Purchase Plan
Business Continuation (aka Buy-Sell) policy
Elimination (aka Waiting) period
Penalties for violating AIDS/HIV privacy laws
23. Policy owner must notify Insurer of loss either in writing - in person or by phone w/in 20 days.
Payment of Premium provision
Juvenile Life (aka Jumping Juvenile) policy
Tax implications of Dividends - Loans & Interest
Notice of Claim provision
24. Premiums determined by target cash values or death benefit; partial cash value w/drawals allowed; transparent policy w/ unbundled premium.
Convertibility provision
Non-Occupational Disability policy
Time Limit on Certain Defenses provision
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
25. Unintentional - up to $1 -000 + legal $; Intentional - $1 -000-5 -000 + legal $; If harmful - misdemeanor + up to 1 yr. prison + up to $10 -000.
Retrocession
Insurability Type Conditional receipt
Penalties for violating AIDS/HIV privacy laws
CA Work. Comp. Statutes
26. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.
Trusts
Peril vs. Hazard
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Annuity Classifications (2 of 5): When benefits begin
27. Life license + NASD (FINRA) Series 6 or 7.
Binding receipt (aka Temporary Insurance Agreement)
Requirements to sell variable life products
Graded Premium Whole Life policy
Rate (as defined by CIC)
28. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).
Policy loans
Trusts
Group Disability plan
1035 Exchange
29. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).
Types of Insurers (by authorization)
Tax implications of an Annuity (1 of 2)
Binding receipt (aka Temporary Insurance Agreement)
Tax implications of Disability policy
30. Same as WL but w/ Level Term rider; upon death - pays monthly income for FULL term AFTER which pays full death benefit.
Cost of Living Adjustment (COLA) Disability rider
COBRA Time Limitations
Small Employer Medical Expense plan
Family Maintenance policy
31. Policy must be delivered w/ original (or copy of same) application attached.
Payment of Premium provision
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Accidental Death & Dismemberment (AD&D) Life policy
Entire Contract provision
32. Fixed premium w/ guaranteed min. death benefit that may increase due to higher than expected investment returns.
AIDS/HIV discrimination
Medicare Part C (aka Medicare Advantage)
Variable Life policy (2 of 2)
Tax implications of an Estate
33. Monthly; Quarterly; Semi-annually; Annually (cheapest due to less admin cost).
Types of Medical Plans
Premium modes
CA Work. Comp. Statutes
Accidental Death & Dismemberment (AD&D) Life policy
34. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.
Dividends
Presumptive disability
Business Overhead Expense (BOE) Disability policy
Types of Insurers (by ownership)
35. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.
Loss of Earnings Test
Types of Medical Plans
Life insurance policy
Types of Renewability provisions
36. 1: parties to contract; 2: insured party or life; 3: insurable interest - if 3rd party; 4: risks insured against; 5: policy period (term); 6: premium & mode.
Misstatement of Age/Sex provision
Valid life insurance contracts must identify...
Types of Accident & Health insurance
Mortality vs. Morbidity tables
37. Prepaid med. benefits for "subscribers" @ approved facilities; many non-profit; Blue Cross - Hospital stays; Blue Shield - M.D. costs.
Business Continuation (aka Buy-Sell) Disability policy
Blue Cross/Blue Shield
Annuity
Notice of Claim provision
38. Tendency of poorer risks to seek insurance.
Whole (aka Permanent or Straight) Life policy
Medicare
Adverse selection
Tax implications of Dividends - Loans & Interest
39. Policy provisions must conform to state regulations where policy is sold.
Civil Rights/Pregnancy Discrimination Act
Reinsurance
Conformity with State Statute provision
Limited Pay Whole Life policy
40. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.
Variable Universal Life policy
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Relation of Earnings to Insurance provision
Suicide clause/provision
41. Facultative - case by case agreements; Automatic/Treaty - automatic acceptance of risk percentage per previous agreement.
Types of reinsurance
Types of Insurers (by domicile)
Dread Disease policy
Medicare Part D
42. Domestic - within home state; Foreign - outside home state; Alien - outside home country.
Types of Insurers (by domicile)
Medicare Part A & B "Gaps"
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Types of Insurers (by authorization)
43. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.
Flexible Spending Account (FSA)
Accidental Death & Dismemberment (AD&D) Life policy
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Departments of an Insurer
44. Coverage for catastrophic loss w/ high limits - front end deductible; co-insurance (80/20%); blanket coverage; stop loss max.
Common Life Exclusions
Major Medical plan
Errors & Omissions (E&O)
Limited Pay Whole Life policy
45. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.
Rescission
Experience vs. Community rating in Group Health plan
Reinsurance
Concealment exceptions
46. Waives premium upon disability of Insured until return to work; disability must persist for 90 days or longer; 1st 90 day premiums refunded after 90 days.
Waiver of Premium provision
Types of Insurers (by domicile)
Blue Cross/Blue Shield
Elimination (aka Waiting) period
47. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.
Proof of Loss provision
Accidental Death (aka Multiple Indemnity) rider
Automatic Premium Loan (APL) provision
Credit Life policy
48. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.
Settlement options for Life policy (1 of 2)
Common Life Exclusions
1035 Exchange
Rescission
49. Covers entire family w/ WL for breadwinner & (convertible) Level Term for spouse & children (until certain age).
Common Life Exclusions
CHAMPUS (aka TriCare)
Family policy
Premium modes
50. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.
Joint Life (aka "First to die") policy
Types of Renewability provisions
Phases of an annuity
Approval Type Conditional receipt
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