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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. 1: parties to contract; 2: insured party or life; 3: insurable interest - if 3rd party; 4: risks insured against; 5: policy period (term); 6: premium & mode.
Tax implications of an Annuity (1 of 2)
Graded Premium Whole Life policy
Pure risk vs. Speculative risk
Valid life insurance contracts must identify...
2. Info already known; Info that should have been known; Waived info; Irrelevant info.
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Concealment exceptions
Types of Accident & Health (A&H) providers
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
3. 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
Elimination (aka Waiting) period
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Transplant/Cosmetic Surgery rider
Non-forfeiture options for WL policy
4. Same as WL but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Preferred Provider Organization (PPO)
Social Security Benefit (Supplement) rider
Dividend options
Variable Life policy (1 of 2)
5. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.
Free Look provision
Approval Type Conditional receipt
Cost of Living Adjustment (COLA) Life rider
Experience vs. Community rating in Group Health plan
6. Identical to Incontestable Clause in Life policy.
Graded Premium Whole Life policy
Variable Universal Life policy
Incontestability clause/provision
Time Limit on Certain Defenses provision
7. Allows policy owner to w/draw set % of death benefit upon verification of terminal illness w/ expectancy 12-24 mths.; generally tax-free.
Non-Occupational Disability policy
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Medical cost containment (aka Managed care)
COBRA Time Limitations
8. Privately-provided or Medicare-provided (if no private carrier) prescription drug plans for qualified individuals but w/ premium - deductible & co-pay.
Annuity
Medicare Part D
Misstatement of Age/Sex provision
Elimination (aka Waiting) period
9. 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
Employee Retirement Income Security Act (ERISA)
Return of Premium rider
Payment of Premium provision
10. Covers disabilities occurring ONLY "off" job; benefits do not overlap work. comp. (i.e. Group plan).
Equity Indexed annuity
Claim Form (aka Proof of Loss Form) provision
Concealment
Non-Occupational Disability policy
11. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.
Earned vs. Unearned premium
Fraud
Point of Service plan
Proof of Loss provision
12. 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
Law of Large Numbers
Total disability (any-occupational definition)
Long Term Care (LTC) policy
13. Must be delivered in person or by certified - registered or 1st-class mail w/ signature - unless waived by Insurance Commissioner.
Health Reimbursement Account (HRA)
Policy delivery
Survivorship (aka "Last to die") policy
Non-Occupational Disability policy
14. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.
Employee Retirement Income Security Act (ERISA)
Relation of Earnings to Insurance provision
Conformity with State Statute provision
Adjustable Whole Life policy
15. 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.
Primary Insurance Amount (PIA)
Residual disability rider
Employer-Administered plan
Tax implications of Disability policy
16. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.
Supplemental Major Medical plan
Common Disaster (Simultaneous Death Act) clause/provision
Indemnify
Employer-Administered plan
17. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.
Viatical Settlement Provider (VSP)
Insurer (as defined by CIC)
Needs approach (most common)
Return of Premium rider
18. Basic Medical; Major Medical; Comprehensive Major Medical
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Long Term Care (LTC) policy
Types of Medical Plans
Annuity Classifications (1 of 5): How premium is paid
19. Benefits automatically increase annually based on inflationary index (i.e. Consumer Price Index) OR flat rate (5% max.).
Term Life policy
Rate (as defined by CIC)
Experience vs. Community rating in Group Health plan
Cost of Living Adjustment (COLA) Disability rider
20. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.
Term Life policy
Medi-Cal Share Cost plan
Primary Insurance Amount (PIA)
Insurable interest
21. PURELY employer-funded account to reimburse employees for qualified medical expenses not covered by group health plan.
CHAMPUS (aka TriCare)
Guaranteed Insurability Life rider
Convertibility provision
Health Reimbursement Account (HRA)
22. Process which prevents claim denial as a result of false statement or promise (made by Insurer) - which was relied upon by Insured.
Types of Insurers (by authorization)
Estoppel
Return of Premium rider
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
23. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)
Annuity Classifications (1 of 5): How premium is paid
Insurance contract characteristics (2 of 2)
Types of Renewability provisions
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
24. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.
Types of Agency Authority
Medical Savings Account (MSA) & Health Savings Account (HSA)
Medicare Part A (aka Hospital Insurance or HI)
Types of Accident & Health (A&H) providers
25. Receipt whereby coverage incepts conditionally upon submission of full consideration and that all underwriting reqs. are met.
Concealment exceptions
Medicare
Tax implications of an Annuity (1 of 2)
Insurability Type Conditional receipt
26. 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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27. 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.
Life insurance policy
Modified Premium Whole Life policy
Business Overhead Expense (BOE) Disability policy
Tax implications of an Estate
28. Provides for continued operation of business if partner dies - by allowing surviving partner(s) to buy deceased partner's interest in business.
Family or Dependents rider
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Business Continuation (aka Buy-Sell) policy
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
29. 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
Tax implications of medical plans
Exclusions to Work. Comp.
Partial disability rider
Law of Large Numbers
30. Provides benefit during Social Security "black-out" period - up to 1 yr.
Medicare Supplement or Medigap policy
Employer Liability
Risk management
Social Security Benefit (Supplement) rider
31. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Equity Index Whole Life policy
Rate (as defined by CIC)
Guaranteed Insurability Life rider
32. 'The inability to perform your OWN normal occupation or daily duties'.
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Total disability (as commonly defined)
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Elimination (aka Waiting) period
33. 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.
Plans A-L of Medical Supplement or Medigap
Insurance contract characteristics (1 of 2)
Types of Agency Authority
Endowment Life policy
34. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Business Continuation (aka Buy-Sell) Disability policy
Group Disability plan
Business Continuation (aka Buy-Sell) policy
35. Prepaid med. benefits for members ONLY w/ approved primary care M.D. (HMO employee); focus on preventative care; low co-pay.
Policy loans
Health Maintenance Organization (HMO)
Variable Life policy (1 of 2)
Types of hazards
36. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.
7 Pay Test
Medicare Supplement or Medigap policy
Settlement options for Life policy (1 of 2)
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
37. Same as WL but premium low for set # yrs. - THEN premiums vary (+ or -) based on Insurer's investment returns - w/ Gmax.
Concealment
Preferred Provider Organization (PPO)
Indeterminate Premium Whole Life policy
Settlement options for Life policy (1 of 2)
38. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Trusts
Endowment Life policy
Key Employee policy
Errors & Omissions (E&O)
39. War - 2 types; Suicide (1st 2 yrs.); Aviation (non-commercial); Hazardous hobbies; Criminal acts; Alcohol/Drug influenced.
Risk management
Misstatement of Age/Sex provision
Concealment exceptions
Common Life Exclusions
40. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.
Total disability (any-occupational definition)
Tax implications of Death Benefit & Cash Value
Small Employer Medical Expense plan
Payment of Premium provision
41. Fixed premium w/ guaranteed min. death benefit that may increase due to higher than expected investment returns.
Variable Life policy (2 of 2)
Mortality vs. Morbidity tables
Insurance contract characteristics (1 of 2)
Tax implications of an Estate
42. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).
Loss of Earnings Test
CA Work. Comp. Statutes
Policy delivery
Major Medical plan
43. No-charge annuity w/drawals allowed up to 10% of total - THEN penalized on sliding scale based on # policy yrs.; conditionally waived.
Proof of Loss provision
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Annuity surrender charges
Variable Universal Life policy
44. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.
Blackout Period
Penalties for violating AIDS/HIV privacy laws
Suicide clause/provision
Factors that determine premium
45. A&H - A&S - Sickness only; Medical; Disability; Accident only; Travel accident; LTC; Medicare supplement; AD&D; Dental/Vision/Prescription; Limited.
Types of Accident & Health (A&H) providers
Types of Accident & Health insurance
Term Life policy
Limited Pay Whole Life policy
46. Beneficiary has right to leave death benefits / Insurer to protect $ from creditors; interest (taxable) paid on retained funds.
Free Look provision
Spendthrift provision
Family or Dependents rider
24 Hour Coverage (CA)
47. Potential circumstance that could cause a loss; measured in dollars.
Loss exposure
Spendthrift provision
Factors that determine premium
Change of Occupation provision
48. Provides supplemental coverage for physician/surgeon fees if enrolled (during enrollment period ONLY) & pay monthly premium w/ deductible and co-insurance.
Parole Pardon Rule
Occupational Disability policy
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Credit Life policy
49. Funding mechanism whereby employer & employee share cost of premium. Upon death - benefit is shared between employer & beneficiary.
Single Pay Whole Life policy
Types of Agency Authority
Split Dollar Plan
Health Reimbursement Account (HRA)
50. Reappearance of disability w/in 6 mth. period after "recovery" from same disability is considered recurrence - not new disability.
Recurrent disability clause/provision
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Types of Insurers (by authorization)
Term Life policy