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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. Fixed premium w/ guaranteed min. death benefit that may increase due to higher than expected investment returns.
Variable Life policy (2 of 2)
Employer-Administered plan
Supplemental Major Medical plan
Relation of Earnings to Insurance provision
2. Expands individual WL policy to include Term Life for dependents (spouse - children - etc.).
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Blackout Period
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Family or Dependents rider
3. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.
Credit Life policy
Rehabilitation rider
Residual disability rider
Trial Application (aka Request for Offer)
4. Federally-sponsored health care for individuals 65+ &/or w/ certain disabilities; may run concurrent w/ group plan but group plan would act primary - THEN Medicare.
Partial disability rider
Variable Life policy (1 of 2)
Proof of Loss provision
Medicare
5. Same as WL but cash value increases @ current interest rates (not set); premium can start low or high & may change.
Indeterminate Premium Whole Life policy
Presumptive disability
Current Assumption (aka Interest-Sensitive) Whole Life policy
Annuity Classifications (1 of 5): How premium is paid
6. Policy owner must notify Insurer of loss either in writing - in person or by phone w/in 20 days.
Graded Premium Whole Life policy
Notice of Claim provision
Doctrine of Comity
24 Hour Coverage (CA)
7. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.
Peril vs. Hazard
Business Continuation (aka Buy-Sell) policy
Rate (as defined by CIC)
Types of Insurers (by ownership)
8. Available for any reason up to full cash value @ fixed (max 8%) OR variable interest rate; loan $ + interest deducted from benefit @ death.
Partial disability rider
Claim Form (aka Proof of Loss Form) provision
Policy loans
Dread Disease policy
9. Mathematical law stating the larger # of occurrences - the more predictable the losses; used to calculate premiums.
Law of Large Numbers
Common Life Exclusions
Types of Accident & Health insurance
Return of Premium rider
10. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.
Insuring clause/provision (aka Insuring Agreement)
Variable Life policy (2 of 2)
Free Look provision
Fraud
11. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.
CHAMPUS (aka TriCare)
Types of Insurers (by domicile)
Insurable interest
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
12. An attempt to contain costs by employing various strategies - including wellness programs - preventative testing - outpatient & alternative procedures.
Small Employer Medical Expense plan
Insurability Type Conditional receipt
Medical cost containment (aka Managed care)
Group Disability plan
13. 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.
Return of Cash Value rider
Key Employee Disability policy
Long Term Care (LTC) policy
Beneficiary provisions
14. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.
Medi-Cal Share Cost plan
Joint Life (aka "First to die") policy
Types of Insurers (by ownership)
Elements to contract
15. Permanent - not recoverable (spinal cord injury); Temporary - recoverable (temp. illness/injury - broken limb).
Group Disability plan
Return of Cash Value rider
Valid life insurance contracts must identify...
Permanent vs. Temporary disability
16. Peril is the CAUSE of loss. Hazard is a condition that increases LIKELIHOOD of loss.
Peril vs. Hazard
Annuity Classifications (3 of 5): Source of income
Free Look provision
Total disability (as commonly defined)
17. Tendency of poorer risks to seek insurance.
Comprehensive Major Medical plan
Adverse selection
Automatic Premium Loan (APL) provision
Peril vs. Hazard
18. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.
Rescission
Equity Indexed annuity
CHAMPUS (aka TriCare)
Proof of Loss provision
19. Info already known; Info that should have been known; Waived info; Irrelevant info.
Supplemental Major Medical plan
Single Pay Whole Life policy
Concealment exceptions
Market Value Adjusted (aka Modified Guaranteed) annuity
20. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.
Types of Insurers (by sector)
Free Look provision
Return of Cash Value rider
Accidental Death (aka Multiple Indemnity) rider
21. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).
Incontestability clause/provision
Reinsurance
Rehabilitation rider
Cost of Living Adjustment (COLA) Life rider
22. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.
Types of hazards
Misstatement of Age/Sex provision
Cash value
Variable Life policy (2 of 2)
23. Mandatory 100% employer-funded coverage for injuries/illnesses occurring "on" job; full-time employees only; exclusive remedy. Provides: 1: unlimited medical benefit; 2: survivor income replacement & funeral ($5 -000 max.); 3: disability benefit @ 66
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24. Facultative - case by case agreements; Automatic/Treaty - automatic acceptance of risk percentage per previous agreement.
Needs approach (most common)
Beneficiary provisions
Types of reinsurance
Family Income policy
25. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.
Common Disaster (Simultaneous Death Act) clause/provision
CA Work. Comp. Statutes
Errors & Omissions (E&O)
Indemnify
26. Federal law which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.
Accidental Death & Dismemberment (AD&D) Life policy
Age Discrimination in Employment Act (ADEA)
Waiver of Premium provision
Cash value
27. 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;
Workers' Compensation insurance
Partial disability rider
Key Employee policy
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
28. Receipt whereby coverage incepts ONLY after underwriting approval.
Misstatement of Age/Sex provision
Approval Type Conditional receipt
Total disability (as commonly defined)
Pure risk vs. Speculative risk
29. Physical - slippery floor; Moral - dishonest acts; Morale - carelessness or recklessness.
Types of hazards
Medical Savings Account (MSA) & Health Savings Account (HSA)
Considerations in replacing Health insurance
Permanent vs. Temporary disability
30. Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling - stock investment).
Adverse selection
Pure risk vs. Speculative risk
Medicare
Guaranteed Insurability Life rider
31. Same as WL but w/ adjustable death benefit (& corresponding premium) & over-fund option but w/ annually renewable term (ART).
Legal Action provision
Accidental Death & Dismemberment (AD&D) Life policy
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Fraud
32. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.
Reinsurance
Types of Renewability provisions
Considerations in replacing Health insurance
Types of Insurers (by authorization)
33. Death benefit determined by Insured's projected lost earnings potential.
Human Life Value approach
Residual disability rider
Life insurance policy
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
34. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.
Flexible Spending Account (FSA)
Whole (aka Permanent or Straight) Life policy
Annuity Classifications (2 of 5): When benefits begin
Palliative vs. Curative care
35. 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.
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Tax implications of Disability policy
Annuity Classifications (5 of 5): # of lives
Spendthrift provision
36. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).
Common Disability Exclusions
Annuity Classifications (1 of 5): How premium is paid
Pure risk vs. Speculative risk
Variable Life policy (1 of 2)
37. Same as WL but w/ Decreasing Term rider; upon death - pays monthly income for REMAINING term AFTER which pays full death benefit.
Market Value Adjusted (aka Modified Guaranteed) annuity
Family Income policy
Variable Universal Life policy
Credit Life policy
38. Death benefit determined by Insured's financial goals & needs (minus assets).
Adjustable Whole Life policy
Loss of Earnings Test
Suicide clause/provision
Needs approach (most common)
39. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).
Experience vs. Community rating in Group Health plan
1035 Exchange
Doctrine of Comity
Palliative vs. Curative care
40. Intentional deception; grounds for rescission.
Market Value Adjusted (aka Modified Guaranteed) annuity
Dread Disease policy
Blackout Period
Fraud
41. A lapsed policy may be reinstated if not longer than 3-5 yrs. - & proof of insurability re-established - & back premiums + interest paid.
Split Dollar Plan
Reinstatement provision
Risk management
Business Overhead Expense (BOE) Disability policy
42. Process which prevents claim denial as a result of false statement or promise (made by Insurer) - which was relied upon by Insured.
Errors & Omissions (E&O)
Doctrine of Comity
Payor (aka Waiver of Payor's Premium) rider
Estoppel
43. Period of time following any children's survivor benefit & before benefits are provided to employee's widow/widower.
Approval Type Conditional receipt
Return of Premium rider
Blackout Period
Revocable vs. Irrevocable beneficiary
44. Same as Comprehensive Major Medical but w/ integrated deductible; much more expensive.
Premium modes
Types of Medical Plans
Supplemental Major Medical plan
Health Insurance Portability and Accountability Act (HIPAA)
45. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.
Loss of Earnings Test
Single Pay Whole Life policy
Policy delivery
Needs approach (most common)
46. 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.
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Residual disability rider
Tax implications of an Annuity (1 of 2)
COBRA Time Limitations
47. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.
Endowment Life policy
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Disability Income policy
Common Accident provision
48. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.
Insuring clause/provision (aka Insuring Agreement)
Juvenile Life (aka Jumping Juvenile) policy
Long Term Care (LTC) policy
Variable Universal Life policy
49. 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)
Notice of Claim provision
Modified Endowment Contract (MEC)
Whole (aka Permanent or Straight) Life policy
50. Waives premium upon disability of Insured until return to work; disability must persist for 6 mths. or longer. Cash value & dividends not affected.
Dependent coverage
Waiver of Premium (Waiver of Cost of Insurance) rider
Tax implications of an Estate
Policy delivery