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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. 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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2. Allows Insured to increase death benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age.
Blackout Period
Guaranteed Insurability Life rider
Rate (as defined by CIC)
Loss exposure
3. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.
Elimination (aka Waiting) period
Revocable vs. Irrevocable beneficiary
Concealment
Tax implications of Disability policy
4. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.
Types of Insurers (by authorization)
Point of Service plan
Trial Application (aka Request for Offer)
Survivorship (aka "Last to die") policy
5. Beneficiary has right to leave death benefits / Insurer to protect $ from creditors; interest (taxable) paid on retained funds.
Experience vs. Community rating in Group Health plan
Spendthrift provision
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
24 Hour Coverage (CA)
6. Prepaid med. benefits for members w/ approved primary care M.D. (independent); low co-pay; non-PPO M.D. can be used at higher cost.
Residual disability rider
Guaranteed Insurability Life rider
Preferred Provider Organization (PPO)
Cash value
7. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.
Renewability provision
Annuity Classifications (3 of 5): Source of income
Types of Accident & Health insurance
Common Accident provision
8. Compensates business for loss due to disability of key employee; premiums not deductible but benefits tax-free.
Dividends
Key Employee Disability policy
Cross Purchase Plan
Viatical Settlement Provider (VSP)
9. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.
Dividends
Major Medical plan
Return of Cash Value rider
Medicare Supplement or Medigap policy
10. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).
Types of Insurers (by authorization)
Medi-Cal Share Cost plan
Types of Medical Plans
7 Pay Test
11. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.
Rate (as defined by CIC)
Variable Universal Life policy
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Adjustable Whole Life policy
12. Allows policy owner to w/draw set % of death benefit upon verification of terminal illness w/ expectancy 12-24 mths.; generally tax-free.
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
CA Work. Comp. Statutes
Viatical Settlement Provider (VSP)
Common Accident provision
13. Refund of 50-80% of premium (minus claims paid) every 5-10 yrs. OR age 65; expensive!
Flexible Spending Account (FSA)
COBRA Time Limitations
Return of Premium rider
Convertibility provision
14. Prohibited w/ regard to testing for people of same class; test results must remain confidential; coverage may be declined (once discovered).
24 Hour Coverage (CA)
Adverse selection
Peril vs. Hazard
AIDS/HIV discrimination
15. Fixed premium w/ guaranteed min. death benefit that may increase due to higher than expected investment returns.
Variable Life policy (2 of 2)
Loss exposure
Departments of an Insurer
Tax implications of Disability policy
16. Federal law allows employees/their dependents to continue group benefits w/in 60 days after termination (if employer has 20+ employees); Insured pays premium @ 102% of group cost.
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Joint Life (aka "First to die") policy
Types of Insurers (by sector)
Cash value
17. Info already known; Info that should have been known; Waived info; Irrelevant info.
Types of Insurers (by domicile)
Grace Period provision
Medicare Part A (aka Hospital Insurance or HI)
Concealment exceptions
18. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)
Medicare Part D
Common Disaster (Simultaneous Death Act) clause/provision
Impairment (Exclusion) rider
Annuity Classifications (1 of 5): How premium is paid
19. Excludes coverage for specific injury/illness either temporarily or permanently in order to eliminate pre-existing condition.
Key Employee Disability policy
Impairment (Exclusion) rider
Adjustable Whole Life policy
Employer Liability
20. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.
Joint Life (aka "First to die") policy
Grace Period provision
Annuity
Permanent vs. Temporary disability
21. Life license + NASD (FINRA) Series 6 or 7.
Accidental Death (aka Multiple Indemnity) rider
Basic Medical plan
Peril vs. Hazard
Requirements to sell variable life products
22. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.
Levels of Long Term Care provided
Medicaid/Medi-Cal
Split Dollar Plan
Business Continuation (aka Buy-Sell) policy
23. 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
Parole Pardon Rule
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Underwriting risk categories
Incontestability clause/provision
24. Part A - Inpatient hospital deductibles vary on # of days; limited reserve days; finite benefit; 1st 3 pints blood; Part B - 20% co-payment.
Viatical Settlement Provider (VSP)
Medicare Part A & B "Gaps"
Modified Endowment Contract (MEC)
Applicant Representations vs. Warranties
25. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.
Waiver of Premium (Waiver of Cost of Insurance) rider
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Medi-Cal Share Cost plan
Split Dollar Plan
26. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.
Tax implications of medical plans
Conformity with State Statute provision
Whole (aka Permanent or Straight) Life policy
Experience vs. Community rating in Group Health plan
27. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.
Misstatement of Age/Sex provision
Partial disability rider
Accidental Death (aka Multiple Indemnity) rider
Revocable vs. Irrevocable beneficiary
28. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.
Types of Insurers (by sector)
Key Employee policy
Modified Endowment Contract (MEC)
Tax implications of an Annuity (1 of 2)
29. Provides hospital insurance automatically @ age 65 (if FICA qualified) @ no fee but may have deductible & co-pay.
Renewability provision
Notice of Claim provision
Rehabilitation rider
Medicare Part A (aka Hospital Insurance or HI)
30. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Exclusions to Work. Comp.
Preferred Provider Organization (PPO)
Group Disability plan
Insurable interest
31. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.
Palliative vs. Curative care
Phases of an annuity
Policy delivery
Earned vs. Unearned premium
32. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.
Joint Life (aka "First to die") policy
Policy loans
Non-forfeiture options for WL policy
Key Employee policy
33. Upon death - death benefit is paid + the aggregate of premiums paid to date; add-on to Term policy ONLY.
Tax implications of an Estate
Waiver of Premium (Waiver of Cost of Insurance) rider
Endowment Life policy
Return of Premium rider
34. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.
Earned vs. Unearned premium
Experience vs. Community rating in Group Health plan
Claim Form (aka Proof of Loss Form) provision
Reinstatement provision
35. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.
Convertibility provision
Policy loans
Experience vs. Community rating in Group Health plan
Cross Purchase Plan
36. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.
Total disability (as commonly defined)
Annuity surrender charges
Dental Plan
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
37. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.
Relation of Earnings to Insurance provision
Reinsurance
Comprehensive Major Medical plan
Insurance contract characteristics (1 of 2)
38. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.
Policy loans
7 Pay Test
Factors that determine premium
Social Security Benefit (Supplement) rider
39. 'The inability to perform your OWN normal occupation or daily duties'.
Total disability (as commonly defined)
Transplant/Cosmetic Surgery rider
Binding receipt (aka Temporary Insurance Agreement)
Entire Contract provision
40. Mathematical law stating the larger # of occurrences - the more predictable the losses; used to calculate premiums.
Business Continuation (aka Buy-Sell) policy
Law of Large Numbers
Return of Premium rider
CA Work. Comp. Statutes
41. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).
1035 Exchange
Requirements to sell variable life products
Insurance contract characteristics (2 of 2)
Medicare Part C (aka Medicare Advantage)
42. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Law of Large Numbers
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Common Accident provision
Accidental Death & Dismemberment (AD&D) Life policy
43. Same as WL but w/ Level Term rider; upon death - pays monthly income for FULL term AFTER which pays full death benefit.
Proof of Loss provision
AIDS/HIV discrimination
Dental Plan
Family Maintenance policy
44. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.
Insuring clause/provision (aka Insuring Agreement)
Residual disability rider
Exclusions for Major Medical plan
Tax implications of Disability policy
45. Death benefit determined by Insured's financial goals & needs (minus assets).
Needs approach (most common)
Indeterminate Premium Whole Life policy
Trusts
Plans A-L of Medical Supplement or Medigap
46. 'The inability to perform ANY reasonable occupation based on education - training or experience'.
Insurance contract characteristics (1 of 2)
Group Disability plan
Experience vs. Community rating in Group Health plan
Total disability (more restrictive definition)
47. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.
Cost of Living Adjustment (COLA) Disability rider
Departments of an Insurer
Credit Life policy
Tax implications of an Annuity (1 of 2)
48. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.
Payment of Premium provision
Convertibility provision
Types of Renewability provisions
Total disability (as commonly defined)
49. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.
Market Value Adjusted (aka Modified Guaranteed) annuity
Return of Premium rider
Insurer (as defined by CIC)
Free Look provision
50. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.
Permanent vs. Temporary disability
Modified Premium Whole Life policy
Types of Accident & Health (A&H) providers
Elimination (aka Waiting) period