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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. Representation - oral or written statement made to best of knowledge or belief; Warranty - statement guaranteed/presumed/understood to be true.
Applicant Representations vs. Warranties
Types of Medical Plans
Tax implications of Disability policy
Settlement options for Life policy (1 of 2)
2. A company providing lump sum buyout (50-90% of total) of Life policy; becomes owner & beneficiary & assumes premium payments; usually terminally ill viator.
Presumptive disability
Viatical Settlement Provider (VSP)
Estoppel
Dividends
3. Waives premium on Life policy for minor child until age 21 in event premium payor dies or becomes disabled.
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4. 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.
Dread Disease policy
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Tax implications of medical plans
Types of Accident & Health insurance
5. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).
Mortality vs. Morbidity tables
Proof of Loss provision
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
1035 Exchange
6. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.
Types of reinsurance
Annuity
Accidental Death & Dismemberment (AD&D) Disability rider
Beneficiary provisions
7. Permanent disability due to total loss of sight - hearing - speech or use of 2 + limbs; benefits paid even while continuing to work.
Presumptive disability
Retrocession
Beneficiary provisions
Accidental Death & Dismemberment (AD&D) Life policy
8. Mathematical law stating the larger # of occurrences - the more predictable the losses; used to calculate premiums.
Law of Large Numbers
Variable Life policy (1 of 2)
Waiver of Premium (Waiver of Cost of Insurance) rider
Change of Occupation provision
9. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.
Payor (aka Waiver of Payor's Premium) rider
Insurance contract characteristics (1 of 2)
Law of Large Numbers
Cash value
10. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.
Types of Accident & Health (A&H) providers
Palliative vs. Curative care
Types of Insurers (by ownership)
Peril vs. Hazard
11. Intentional deception; grounds for rescission.
Tax implications of Disability policy
Permanent vs. Temporary disability
Family or Dependents rider
Fraud
12. Allows for use of HMO/PPO or other private carrier to provide expanded benefits @ additional premium & if enrolled in BOTH Parts A & B.
Medicare Part C (aka Medicare Advantage)
Peril vs. Hazard
Endowment Life policy
Viatical Settlement Provider (VSP)
13. 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.
Tax implications of an Estate
Experience vs. Community rating in Group Health plan
Legal Action provision
Types of Accident & Health (A&H) providers
14. Prepaid med. benefits for "subscribers" @ approved facilities; many non-profit; Blue Cross - Hospital stays; Blue Shield - M.D. costs.
Comprehensive Major Medical plan
Common Disability Exclusions
Blue Cross/Blue Shield
Law of Large Numbers
15. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.
Medicare Part C (aka Medicare Advantage)
Underwriting risk categories
Family Maintenance policy
Payment of Premium provision
16. 'The inability to perform your OWN normal occupation or daily duties'.
Health Reimbursement Account (HRA)
Types of Licensed Producers
Adjustable Whole Life policy
Total disability (as commonly defined)
17. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).
Accidental Death (aka Multiple Indemnity) rider
Insurable interest
24 Hour Coverage (CA)
Age Discrimination in Employment Act (ADEA)
18. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.
Medi-Cal Share Cost plan
Disability Income policy
Types of Agency Authority
Variable Life policy (2 of 2)
19. 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.
Major Medical plan
1035 Exchange
Common Accident provision
Legal Action provision
20. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.
Pure risk vs. Speculative risk
Point of Service plan
Phases of an annuity
Split Dollar Plan
21. Govt. organization providing health care benefits for dependents of military personnel.
Trial Application (aka Request for Offer)
Medical Savings Account (MSA) & Health Savings Account (HSA)
Indeterminate Premium Whole Life policy
CHAMPUS (aka TriCare)
22. 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.
Valid life insurance contracts must identify...
Workers' Compensation insurance
Concealment exceptions
Equity Index Whole Life policy
23. Coverage remains in effect for 31 days past premium due date; benefits paid during grace period would be deducted from sum.
Total disability (any-occupational definition)
Types of Insurers (by sector)
Grace Period provision
Insurability Type Conditional receipt
24. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.
Proof of Loss provision
Age Discrimination in Employment Act (ADEA)
Life insurance policy
Tax implications of an Annuity (1 of 2)
25. 'The inability to perform ANY reasonable occupation based on education - training or experience'.
Entire Contract provision
Total disability (more restrictive definition)
Insurability Type Conditional receipt
Dividend options
26. Two death benefit options - Option A: death benefit ONLY; Option B: death benefit + cash value; death benefit NOT guaranteed.
Viatical Settlement Provider (VSP)
Long Term Care (LTC) policy
Binding receipt (aka Temporary Insurance Agreement)
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
27. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.
Types of Insurers (by authorization)
Common Life Exclusions
Indemnify
Annuity
28. Coverage for catastrophic loss w/ high limits - front end deductible; co-insurance (80/20%); blanket coverage; stop loss max.
Major Medical plan
Valid life insurance contracts must identify...
Legal Action provision
Revocable vs. Irrevocable beneficiary
29. Pre-existing illness/injury; Waiting period; Elimination period; Probationary period; Benefits - Exclusions - Limitations; Underwriting reqs.
Needs approach (most common)
Considerations in replacing Health insurance
Business Continuation (aka Buy-Sell) policy
Cost of Living Adjustment (COLA) Disability rider
30. Earned premium is $ paid for coverage to date. Unearned premium is $ paid & returnable due to coverage not provided.
Earned vs. Unearned premium
Applicant Representations vs. Warranties
Estoppel
Endowment Life policy
31. Receipt whereby coverage incepts ONLY after underwriting approval.
Doctrine of Comity
Approval Type Conditional receipt
Disability Income policy
Cost of Living Adjustment (COLA) Life rider
32. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.
Civil Rights/Pregnancy Discrimination Act
Incontestability clause/provision
Total disability (as commonly defined)
Point of Service plan
33. No-charge annuity w/drawals allowed up to 10% of total - THEN penalized on sliding scale based on # policy yrs.; conditionally waived.
Spendthrift provision
Annuity surrender charges
Waiver of Premium (Waiver of Cost of Insurance) rider
Suicide clause/provision
34. Potential circumstance that could cause a loss; measured in dollars.
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Cost of Living Adjustment (COLA) Life rider
Free Look provision
Loss exposure
35. Same as WL but w/ Level Term rider; upon death - pays monthly income for FULL term AFTER which pays full death benefit.
Family Maintenance policy
Levels of Long Term Care provided
Split Dollar Plan
7 Pay Test
36. Allows policy owner to w/draw set % of death benefit upon verification of terminal illness w/ expectancy 12-24 mths.; generally tax-free.
Medicare Part A & B "Gaps"
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Family Income policy
Needs approach (most common)
37. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.
Occupational Disability policy
Variable Life policy (2 of 2)
Joint Life (aka "First to die") policy
Waiver of Premium provision
38. Privately-provided or Medicare-provided (if no private carrier) prescription drug plans for qualified individuals but w/ premium - deductible & co-pay.
Beneficiary provisions
Joint Life (aka "First to die") policy
Non-Occupational Disability policy
Medicare Part D
39. 1: Tax-free lump sum; 2: Monthly pay-outs for fixed time; 3: Fixed monthly payments until depleted.
Settlement options for Life policy (1 of 2)
Family policy
Payment of Premium provision
Convertibility provision
40. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.
Payor (aka Waiver of Payor's Premium) rider
Rehabilitation rider
Requirements to sell variable life products
Experience vs. Community rating in Group Health plan
41. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Underwriting risk categories
Concealment exceptions
Health Maintenance Organization (HMO)
Key Employee policy
42. Upon death - death benefit is paid + the aggregate of premiums paid to date; add-on to Term policy ONLY.
Business Continuation (aka Buy-Sell) Disability policy
Civil Rights/Pregnancy Discrimination Act
Cost of Living Adjustment (COLA) Life rider
Return of Premium rider
43. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.
Levels of Long Term Care provided
Supplemental Major Medical plan
Accidental Death (aka Multiple Indemnity) rider
Retrocession
44. Compensates business for loss due to disability of key employee; premiums not deductible but benefits tax-free.
Key Employee Disability policy
Fraud
Adverse selection
Medicare Part A & B "Gaps"
45. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.
Incontestability clause/provision
Endowment Life policy
Levels of Long Term Care provided
Preferred Provider Organization (PPO)
46. Federally-funded but state-run program for truly indigent individuals & families providing medical care at Federal clinic.
Tax implications of medical plans
CHAMPUS (aka TriCare)
Medicaid/Medi-Cal
Endowment Life policy
47. 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.
Settlement options for Life policy (2 of 2)
Guaranteed Insurability Life rider
Insurability Type Conditional receipt
Tax implications of Disability policy
48. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.
Business Continuation (aka Buy-Sell) Disability policy
Annuity Classifications (3 of 5): Source of income
Estoppel
Insurance contract characteristics (1 of 2)
49. Combination of Basic Medical & Major Medical in one policy; Basic pays 1st - then Major Medical w/ corridor deductible.
Beneficiary provisions
Current Assumption (aka Interest-Sensitive) Whole Life policy
Comprehensive Major Medical plan
Business Continuation (aka Buy-Sell) Disability policy
50. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.
Business Overhead Expense (BOE) Disability policy
Dread Disease policy
Insuring clause/provision (aka Insuring Agreement)
Exclusions to Work. Comp.