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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. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.
Modified Premium Whole Life policy
Total disability (as commonly defined)
Recurrent disability clause/provision
Employee Retirement Income Security Act (ERISA)
2. Provides 24 hr. health coverage both "on" & "off" job - but may cause coverage duplication & coordination challenges.
Variable Life policy (2 of 2)
Settlement options for Life policy (1 of 2)
24 Hour Coverage (CA)
Juvenile Life (aka Jumping Juvenile) policy
3. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.
Rehabilitation rider
Annuity Classifications (5 of 5): # of lives
Annuity Classifications (3 of 5): Source of income
Market Value Adjusted (aka Modified Guaranteed) annuity
4. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.
Dental Plan
Major Medical plan
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Credit Life policy
5. Policy provisions must conform to state regulations where policy is sold.
Major Medical plan
Conformity with State Statute provision
Cost of Living Adjustment (COLA) Life rider
Types of Accident & Health insurance
6. Provides medical & personal services for people needing extended assistance w/ Activities of Daily Living (ADL). Other benefits include: assisted living care; respite care; hospice care; adult day care.
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Whole (aka Permanent or Straight) Life policy
Concealment exceptions
Long Term Care (LTC) policy
7. 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.
CA Work. Comp. Statutes
Return of Cash Value rider
Equity Index Whole Life policy
Legal Action provision
8. 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.
Types of Insurers (by ownership)
Variable Life policy (2 of 2)
Tax implications of an Estate
Entire Contract provision
9. Employer w/ 25 or less employees must offer all eligible employees @ least 2 medical plan options where pre-existing conditions can't be excluded more than 1 yr.
Small Employer Medical Expense plan
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Accidental Death & Dismemberment (AD&D) Life policy
Medicare Part C (aka Medicare Advantage)
10. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.
Business Continuation (aka Buy-Sell) policy
Automatic Premium Loan (APL) provision
Dental Plan
Blackout Period
11. 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.
Palliative vs. Curative care
Business Continuation (aka Buy-Sell) Disability policy
Waiver of Premium provision
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
12. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.
Types of Accident & Health (A&H) providers
Change of Occupation provision
Employee Retirement Income Security Act (ERISA)
Insurer (as defined by CIC)
13. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.
Joint Life (aka "First to die") policy
Types of reinsurance
Accidental Death & Dismemberment (AD&D) Life policy
Primary Insurance Amount (PIA)
14. Conditional - coverage is conditional; Personal - parties are people; Good faith - honesty/integrity; Fiduciary - req's financial trust.
Dividend options
Concealment
Cash value
Insurance contract characteristics (2 of 2)
15. Federal law to protect Federal employees' (& their beneficiaries') pension - group insurance - & welfare benefits.
Penalties for violating AIDS/HIV privacy laws
Blackout Period
Accidental Death (aka Multiple Indemnity) rider
Employee Retirement Income Security Act (ERISA)
16. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.
Entire Contract provision
Single Pay Whole Life policy
Annuity surrender charges
Guaranteed Insurability Life rider
17. Insurance purchased by other Insurer(s) to spread or diversify risk; promotes industry stability.
Retrocession
Disability Income policy
Reinsurance
Modified Endowment Contract (MEC)
18. Provides hospital insurance automatically @ age 65 (if FICA qualified) @ no fee but may have deductible & co-pay.
Medicare Part A (aka Hospital Insurance or HI)
Major Medical plan
Presumptive disability
Payment of Premium provision
19. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.
Notice of Claim provision
Concealment exceptions
Insurance contract characteristics (1 of 2)
Cash value
20. Responsible adult trustee designated to manage death benefits for minor child beneficiary until adulthood.
Workers' Compensation insurance
Comprehensive Major Medical plan
Departments of an Insurer
Trusts
21. Same as WL but can be "paid-up" early by paying larger premium for shorter payment period (i.e. 10 Pay Life - 20 Pay Life).
Limited Pay Whole Life policy
Notice of Claim provision
Palliative vs. Curative care
Parole Pardon Rule
22. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Key Employee policy
Small Employer Medical Expense plan
Annuity Classifications (5 of 5): # of lives
Rescission
23. Facultative - case by case agreements; Automatic/Treaty - automatic acceptance of risk percentage per previous agreement.
Disability Income policy
Dependent coverage
Needs approach (most common)
Types of reinsurance
24. Federal program financed by payroll taxes provided equally by both employer & employee OR entirely by individual (if self-employed). Provides benefits for: Medicare @ age 65+; retirement; $255 lump sum death benefit; (limited) disability; survivors;
Dividend options
Insurability Type Conditional receipt
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Medicare Supplement or Medigap policy
25. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.
Long Term Care (LTC) policy
Automatic Premium Loan (APL) provision
Juvenile Life (aka Jumping Juvenile) policy
Convertibility provision
26. Price of insurance per exposure unit.
Factors that determine premium
Rate (as defined by CIC)
Medical cost containment (aka Managed care)
Doctrine of Comity
27. Provides coverage for specific disease(s) - such as cancer or leukemia.
Occupational Disability policy
Dread Disease policy
Accidental Death & Dismemberment (AD&D) Disability rider
Viatical Settlement Provider (VSP)
28. Funding mechanism whereby employer & employee share cost of premium. Upon death - benefit is shared between employer & beneficiary.
Survivorship (aka "Last to die") policy
Incontestability clause/provision
Insurance contract characteristics (2 of 2)
Split Dollar Plan
29. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.
Business Continuation (aka Buy-Sell) Disability policy
Risk management
Cross Purchase Plan
Elements to contract
30. Must be delivered in person or by certified - registered or 1st-class mail w/ signature - unless waived by Insurance Commissioner.
Total disability (as commonly defined)
Health Maintenance Organization (HMO)
Relation of Earnings to Insurance provision
Policy delivery
31. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Annuity surrender charges
Claim Form (aka Proof of Loss Form) provision
Factors that determine premium
32. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)
Reinsurance
Premium modes
Annuity Classifications (1 of 5): How premium is paid
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
33. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.
Free Look provision
Settlement options for Life policy (1 of 2)
Waiver of Premium (Waiver of Cost of Insurance) rider
Notice of Claim provision
34. Reappearance of disability w/in 6 mth. period after "recovery" from same disability is considered recurrence - not new disability.
Recurrent disability clause/provision
Insurability Type Conditional receipt
Concealment
Insurer (as defined by CIC)
35. Dependent children are covered until 19 or 23 (full-time student only) or until self-sufficient (if handicapped).
Social Security Benefit (Supplement) rider
Adjustable Whole Life policy
Dependent coverage
Spendthrift provision
36. Premiums determined by target cash values or death benefit; partial cash value w/drawals allowed; transparent policy w/ unbundled premium.
Market Value Adjusted (aka Modified Guaranteed) annuity
Health Maintenance Organization (HMO)
Elements to contract
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
37. Monthly; Quarterly; Semi-annually; Annually (cheapest due to less admin cost).
Parole Pardon Rule
Premium modes
Elimination (aka Waiting) period
Residual disability rider
38. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.
Types of Licensed Producers
Spendthrift provision
Juvenile Life (aka Jumping Juvenile) policy
Human Life Value approach
39. Federal law which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.
Insurer (as defined by CIC)
Age Discrimination in Employment Act (ADEA)
Key Employee Disability policy
Parole Pardon Rule
40. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Group Disability plan
Human Life Value approach
Employer-Administered plan
41. PURELY employer-funded account to reimburse employees for qualified medical expenses not covered by group health plan.
Health Reimbursement Account (HRA)
Family policy
Transplant/Cosmetic Surgery rider
Total disability (more restrictive definition)
42. Identical to Incontestable Clause in Life policy.
Accidental Death (aka Multiple Indemnity) rider
Medicaid/Medi-Cal
Time Limit on Certain Defenses provision
Occupational Disability policy
43. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.
Modified Endowment Contract (MEC)
Underwriting risk categories
Common Accident provision
Equity Index Whole Life policy
44. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.
Proof of Loss provision
Family Maintenance policy
Approval Type Conditional receipt
Market Value Adjusted (aka Modified Guaranteed) annuity
45. 4: Funds retained by Insurer until w/drawn - interest ONLY paid monthly (taxable); 5: Paid-up immediate annuity.
Settlement options for Life policy (2 of 2)
1035 Exchange
Key Employee policy
Limited Pay Whole Life policy
46. Provides disability income during surgery recovery from life-threatening condition (& sometimes cosmetic surgery).
Current Assumption (aka Interest-Sensitive) Whole Life policy
Presumptive disability
Rate (as defined by CIC)
Transplant/Cosmetic Surgery rider
47. Receipt whereby coverage incepts conditionally upon submission of full consideration and that all underwriting reqs. are met.
Non-Occupational Disability policy
Tax implications of medical plans
Insurability Type Conditional receipt
Equity Indexed annuity
48. Req. by CA statute & may provide workers coverage for action-over claims.
Variable Life policy (1 of 2)
Types of Accident & Health insurance
Employer Liability
Plans A-L of Medical Supplement or Medigap
49. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.
Guaranteed Insurability Life rider
Current Assumption (aka Interest-Sensitive) Whole Life policy
Trial Application (aka Request for Offer)
Permanent vs. Temporary disability
50. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.
Occupational Disability policy
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Tax implications of an Estate
Graded Premium Whole Life policy