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. Refund of 50-80% of premium (minus claims paid) every 5-10 yrs. OR age 65; expensive!






2. Conditional - coverage is conditional; Personal - parties are people; Good faith - honesty/integrity; Fiduciary - req's financial trust.






3. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.






4. Allows for use of HMO/PPO or other private carrier to provide expanded benefits @ additional premium & if enrolled in BOTH Parts A & B.






5. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.






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






7. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.






8. Permanent disability due to total loss of sight - hearing - speech or use of 2 + limbs; benefits paid even while continuing to work.






9. Primary - if 2 or more - equally shared; Contingent (Secondary) - only if primary dead; Tertiary - only if both primary & secondary dead. If none listed - goes to estate.






10. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).






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






12. Permanent - not recoverable (spinal cord injury); Temporary - recoverable (temp. illness/injury - broken limb).






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






14. Provides professional services - rehabilitation - training/re-training & related costs to assist Insured in returning to work.






15. Private sector (Commercial) - provides LA&H - P&C - & LTC; Public sector (Gov't) - provides flood - work. comp. - Medicare/Medicaid - Group Life (SGLI/FEGLI).






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






17. Benefits NOT taxable; employer-paid premiums deductible to employer; individual plans not deductible unless over 7 1/2% of adjusted gross income - then excess deductible.






18. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.






19. Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling - stock investment).






20. Same as WL but w/ adjustable death benefit (& corresponding premium) & over-fund option but w/ annually renewable term (ART).






21. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.






22. Unintentional - up to $1 -000 + legal $; Intentional - $1 -000-5 -000 + legal $; If harmful - misdemeanor + up to 1 yr. prison + up to $10 -000.






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






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






25. Provides benefit during Social Security "black-out" period - up to 1 yr.






26. An unintentional mistake committed by an insurance representative; may be covered by E&O insurance.






27. Prohibited w/ regard to testing for people of same class; test results must remain confidential; coverage may be declined (once discovered).






28. 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.






29. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).






30. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.






31. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.






32. Same as WL but premium low for set # yrs. - THEN premiums vary (+ or -) based on Insurer's investment returns - w/ Gmax.






33. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.






34. Process whereby a reinsurer reinsures w/ another reinsurer.






35. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.






36. Type of partial disability rider - which pays fluctuating % of lost income w/out time limit.






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






38. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.






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






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






41. Mathematical law stating the larger # of occurrences - the more predictable the losses; used to calculate premiums.






42. Basic Medical; Major Medical; Comprehensive Major Medical






43. War; elective cosmetic surgery; routine dental; work. comp.-covered claims; self-inflicted (intentional); gov't. facility treatment; LTC; private nursing.






44. 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.






45. 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.






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






47. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.






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






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






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