SUBJECTS
|
BROWSE
|
CAREER CENTER
|
POPULAR
|
JOIN
|
LOGIN
Business Skills
|
Soft Skills
|
Basic Literacy
|
Certifications
About
|
Help
|
Privacy
|
Terms
|
Email
Search
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. A company providing lump sum buyout (50-90% of total) of Life policy; becomes owner & beneficiary & assumes premium payments; usually terminally ill viator.
Viatical Settlement Provider (VSP)
Binding receipt (aka Temporary Insurance Agreement)
Doctrine of Comity
Free Look provision
2. Federal law to protect Federal employees' (& their beneficiaries') pension - group insurance - & welfare benefits.
Graded Premium Whole Life policy
Employee Retirement Income Security Act (ERISA)
Renewability provision
Types of Insurers (by authorization)
3. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Accidental Death & Dismemberment (AD&D) Disability rider
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Age Discrimination in Employment Act (ADEA)
Insurable interest
4. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.
Free Look provision
Modified Premium Whole Life policy
Parole Pardon Rule
Payment of Premium provision
5. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.
Considerations in replacing Health insurance
Credit Life policy
Annuity Classifications (3 of 5): Source of income
Comprehensive Major Medical plan
6. Allows for Term policy renewal @ higher premium w/out medical exam; guarantees insurability; based on actual/attained age.
Renewability provision
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
CA Work. Comp. Statutes
Medical Savings Account (MSA) & Health Savings Account (HSA)
7. Covers disabilities occurring both "on" AND "off" job; "on" job benefits paid in addition to work. comp. - if applicable (i.e. individual plan).
Occupational Disability policy
Group Disability plan
Types of Renewability provisions
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
8. 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
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Residual disability rider
Insurer (as defined by CIC)
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.
Settlement options for Life policy (1 of 2)
Viatical Settlement Provider (VSP)
Medicare Supplement or Medigap policy
Experience vs. Community rating in Group Health plan
10. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.
Tax implications of Dividends - Loans & Interest
Presumptive disability
Insuring clause/provision (aka Insuring Agreement)
Term Life policy
11. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).
Term Life policy
Impairment (Exclusion) rider
Point of Service plan
Loss of Earnings Test
12. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).
Free Look provision
Cost of Living Adjustment (COLA) Life rider
COBRA Time Limitations
Notice of Claim provision
13. Receipt whereby coverage incepts immediately upon submission of full consideration - unless declined & premium refunded.
Variable Life policy (2 of 2)
Types of Medical Plans
Departments of an Insurer
Binding receipt (aka Temporary Insurance Agreement)
14. Basic Medical; Major Medical; Comprehensive Major Medical
Insurable interest
Types of Medical Plans
Concealment
Preferred Provider Organization (PPO)
15. A lapsed policy may be reinstated if not longer than 3-5 yrs. - & proof of insurability re-established - & back premiums + interest paid.
Palliative vs. Curative care
Beneficiary provisions
Reinstatement provision
Tax implications of an Annuity (1 of 2)
16. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.
Tax implications of an Annuity (1 of 2)
Types of Insurers (by authorization)
Relation of Earnings to Insurance provision
Split Dollar Plan
17. Refund of 50-80% of premium (minus claims paid) every 5-10 yrs. OR age 65; expensive!
Current Assumption (aka Interest-Sensitive) Whole Life policy
Return of Premium rider
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Change of Occupation provision
18. Facultative - case by case agreements; Automatic/Treaty - automatic acceptance of risk percentage per previous agreement.
Medical cost containment (aka Managed care)
Estoppel
Types of reinsurance
Non-forfeiture options for WL policy
19. WL policy covering 2 or more Insureds but ONLY payable upon death of LAST Insured - generally low premium but high death benefit.
Term Life policy
Transplant/Cosmetic Surgery rider
Cross Purchase Plan
Survivorship (aka "Last to die") policy
20. Funding mechanism whereby employer & employee share cost of premium. Upon death - benefit is shared between employer & beneficiary.
Comprehensive Major Medical plan
Endowment Life policy
Split Dollar Plan
Guaranteed Insurability Life rider
21. War; elective cosmetic surgery; routine dental; work. comp.-covered claims; self-inflicted (intentional); gov't. facility treatment; LTC; private nursing.
Variable Universal Life policy
Factors that determine premium
Rate (as defined by CIC)
Exclusions for Major Medical plan
22. Responsible adult trustee designated to manage death benefits for minor child beneficiary until adulthood.
Trusts
Types of Insurers (by domicile)
Exclusions for Major Medical plan
Preferred Provider Organization (PPO)
23. 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.
Loss exposure
Concealment
Survivorship (aka "Last to die") policy
Dividend options
24. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Time Limit on Certain Defenses provision
CHAMPUS (aka TriCare)
Free Look provision
25. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.
Beneficiary provisions
Accidental Death (aka Multiple Indemnity) rider
Doctrine of Comity
Types of Renewability provisions
26. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.
Annuity
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Renewability provision
Estoppel
27. Provides 24 hr. health coverage both "on" & "off" job - but may cause coverage duplication & coordination challenges.
24 Hour Coverage (CA)
Annuity surrender charges
Types of Medical Plans
Payment of Premium provision
28. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.
Medicare Part A (aka Hospital Insurance or HI)
Adjustable Whole Life policy
Renewability provision
Medicaid/Medi-Cal
29. Mathematical law stating the larger # of occurrences - the more predictable the losses; used to calculate premiums.
Law of Large Numbers
Premium modes
Impairment (Exclusion) rider
Family Maintenance policy
30. 'The inability to perform your OWN normal occupation or daily duties'.
Approval Type Conditional receipt
Adverse selection
Total disability (as commonly defined)
Key Employee Disability policy
31. 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
Binding receipt (aka Temporary Insurance Agreement)
7 Pay Test
Long Term Care (LTC) policy
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
32. Process whereby a reinsurer reinsures w/ another reinsurer.
Loss of Earnings Test
Retrocession
Common Life Exclusions
Types of Accident & Health (A&H) providers
33. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.
Return of Cash Value rider
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Rescission
Common Life Exclusions
34. 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)
1035 Exchange
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Levels of Long Term Care provided
35. Fixed premium w/ guaranteed min. death benefit that may increase due to higher than expected investment returns.
Variable Life policy (2 of 2)
Modified Premium Whole Life policy
1035 Exchange
Social Security Benefit (Supplement) rider
36. Non-qualified Annuity - Non-deductible contributions & tax-deferred growth. At pay-out - tax-free principal but taxable growth.
Current Assumption (aka Interest-Sensitive) Whole Life policy
Tax implications of an Annuity (1 of 2)
Dividend options
Annuity Classifications (2 of 5): When benefits begin
37. Written policy terms supersede oral statements made prior to policy issue.
Dental Plan
Parole Pardon Rule
Annuity surrender charges
Reinstatement provision
38. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.
Waiver of Premium provision
Limited Pay Whole Life policy
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Primary Insurance Amount (PIA)
39. Upon death - death benefit is paid + the aggregate of cash value accumulated to date; add-on to WL policy ONLY.
Return of Cash Value rider
Annuity Classifications (2 of 5): When benefits begin
Cash value
1035 Exchange
40. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).
Payment of Premium provision
Common Disability Exclusions
Blue Cross/Blue Shield
Term Life policy
41. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.
7 Pay Test
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Family or Dependents rider
Payment of Premium provision
42. Insured can seek legal action against Insurer for denial of claim only after 60 days and up to 3 yrs. after providing proof of loss.
Legal Action provision
Needs approach (most common)
Entire Contract provision
Spendthrift provision
43. No coverage for injuries while: 1: @ voluntary social event; 2: self-inflicted (intentional); 3: under alcohol/drug influence; 4: committing criminal act; 5: aggressor in workplace fight; 6: participating in athletic event (non-pro. athletes) 7: par
Exclusions to Work. Comp.
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Annuity surrender charges
Entire Contract provision
44. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.
Exclusions to Work. Comp.
Modified Endowment Contract (MEC)
Errors & Omissions (E&O)
Common Disability Exclusions
45. Temp. coverage for set duration w/ death benefit ONLY (no cash value) - offers largest $ for lowest premium; renewable; convertible.
Term Life policy
Estoppel
Whole (aka Permanent or Straight) Life policy
Guaranteed Insurability Life rider
46. Waives premium upon disability of Insured until return to work; disability must persist for 6 mths. or longer. Cash value & dividends not affected.
Waiver of Premium (Waiver of Cost of Insurance) rider
Non-forfeiture options for WL policy
Annuity
Elimination (aka Waiting) period
47. 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.
Residual disability rider
Plans A-L of Medical Supplement or Medigap
Settlement options for Life policy (1 of 2)
Phases of an annuity
48. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.
Underwriting risk categories
24 Hour Coverage (CA)
Single Pay Whole Life policy
Key Employee policy
49. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.
IRS Penalties for Annuities
Requirements to sell variable life products
Elimination (aka Waiting) period
Notice of Claim provision
50. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.
Medical Savings Account (MSA) & Health Savings Account (HSA)
Dividend options
Business Continuation (aka Buy-Sell) Disability policy
Elements to contract