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. 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.






2. 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.






3. Provides % of monthly income benefit if Insured becomes disabled due to illness or accident.






4. Life license + NASD (FINRA) Series 6 or 7.






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






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. Receipt whereby coverage incepts ONLY after underwriting approval.






8. 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.






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






10. Provides hospital insurance automatically @ age 65 (if FICA qualified) @ no fee but may have deductible & co-pay.






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






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






13. 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.






14. 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






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






16. Death benefit determined by Insured's financial goals & needs (minus assets).






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






18. Coverage remains in effect for 31 days past premium due date; benefits paid during grace period would be deducted from sum.






19. A lapsed policy may be reinstated if not longer than 3-5 yrs. - & proof of insurability re-established - & back premiums + interest paid.






20. Earned premium is $ paid for coverage to date. Unearned premium is $ paid & returnable due to coverage not provided.






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






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






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






24. Covers entire family w/ WL for breadwinner & (convertible) Level Term for spouse & children (until certain age).






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






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






27. Savings account for medical expenses; Tax-deductible contributions; tax-deferred growth; tax-free for qualified use; taxable for non-qualified use.






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






29. Reappearance of disability w/in 6 mth. period after "recovery" from same disability is considered recurrence - not new disability.






30. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.






31. Period of time following any children's survivor benefit & before benefits are provided to employee's widow/widower.






32. An attempt to contain costs by employing various strategies - including wellness programs - preventative testing - outpatient & alternative procedures.






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






34. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.






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






36. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.






37. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.






38. 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.






39. Same as WL but w/ Decreasing Term rider; upon death - pays monthly income for REMAINING term AFTER which pays full death benefit.






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






41. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.






42. Available for any reason up to full cash value @ fixed (max 8%) OR variable interest rate; loan $ + interest deducted from benefit @ death.






43. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.






44. 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.






45. Receipt whereby coverage incepts conditionally upon submission of full consideration and that all underwriting reqs. are met.






46. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.






47. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.






48. 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.






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






50. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.