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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. Savings account for medical expenses; Tax-deductible contributions; tax-deferred growth; tax-free for qualified use; taxable for non-qualified use.
Reinsurance
Cost of Living Adjustment (COLA) Life rider
Medical Savings Account (MSA) & Health Savings Account (HSA)
Annuity Classifications (3 of 5): Source of income
2. Grows @ fixed interest rate for set term but cash value may adjust to prevailing rate (+ or -) if fully surrendered before term ends; % w/drawal ok.
Types of Renewability provisions
Family or Dependents rider
Medical Savings Account (MSA) & Health Savings Account (HSA)
Market Value Adjusted (aka Modified Guaranteed) annuity
3. Provides disability income during surgery recovery from life-threatening condition (& sometimes cosmetic surgery).
Transplant/Cosmetic Surgery rider
Incontestability clause/provision
Insurer (as defined by CIC)
Term Life policy
4. 'The inability to perform ANY reasonable occupation based on education - training or experience'.
Health Maintenance Organization (HMO)
Total disability (more restrictive definition)
Presumptive disability
24 Hour Coverage (CA)
5. Same as WL but w/ Decreasing Term rider; upon death - pays monthly income for REMAINING term AFTER which pays full death benefit.
Family Income policy
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Waiver of Premium provision
7 Pay Test
6. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Tax implications of Death Benefit & Cash Value
Modified Endowment Contract (MEC)
Key Employee policy
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
7. 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.
Group Disability plan
Legal Action provision
Change of Occupation provision
Spendthrift provision
8. PURELY employer-funded account to reimburse employees for qualified medical expenses not covered by group health plan.
Insurance contract characteristics (1 of 2)
Health Reimbursement Account (HRA)
Medicare
Dread Disease policy
9. Policy must be delivered w/ original (or copy of same) application attached.
Entire Contract provision
Social Security Benefit (Supplement) rider
Viatical Settlement Provider (VSP)
COBRA Time Limitations
10. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.
Joint Life (aka "First to die") policy
Proof of Loss provision
Annuity
Annuity Classifications (5 of 5): # of lives
11. Same as WL but w/ adjustable death benefit (& corresponding premium) & over-fund option but w/ annually renewable term (ART).
Retrocession
Business Overhead Expense (BOE) Disability policy
Tax implications of an Estate
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
12. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.
Endowment Life policy
Cross Purchase Plan
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Renewability provision
13. 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
Medicare Supplement or Medigap policy
Medicaid/Medi-Cal
Group Disability plan
14. War - 2 types; Suicide (1st 2 yrs.); Aviation (non-commercial); Hazardous hobbies; Criminal acts; Alcohol/Drug influenced.
Survivorship (aka "Last to die") policy
Family policy
Common Life Exclusions
Types of hazards
15. Same as Comprehensive Major Medical but w/ integrated deductible; much more expensive.
Levels of Long Term Care provided
Medical cost containment (aka Managed care)
Supplemental Major Medical plan
Total disability (as commonly defined)
16. Federal law which allows health coverage portability when changing jobs - so long as previous coverage was in effect 63+ days; allows some tax deductibility for LTC.
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Health Insurance Portability and Accountability Act (HIPAA)
Insurance contract characteristics (1 of 2)
Variable Life policy (1 of 2)
17. Receipt whereby coverage incepts immediately upon submission of full consideration - unless declined & premium refunded.
Annuity Classifications (5 of 5): # of lives
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Variable Life policy (2 of 2)
Binding receipt (aka Temporary Insurance Agreement)
18. Two death benefit options - Option A: death benefit ONLY; Option B: death benefit + cash value; death benefit NOT guaranteed.
Experience vs. Community rating in Group Health plan
Point of Service plan
Annuity surrender charges
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
19. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.
Applicant Representations vs. Warranties
Types of Insurers (by ownership)
Recurrent disability clause/provision
Mortality vs. Morbidity tables
20. Tendency of poorer risks to seek insurance.
Adverse selection
Health Maintenance Organization (HMO)
Plans A-L of Medical Supplement or Medigap
Risk management
21. Same as WL but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Mortality vs. Morbidity tables
Variable Life policy (1 of 2)
Rehabilitation rider
Family or Dependents rider
22. Provides medical & personal services for people needing extended assistance w/ Activities of Daily Living (ADL). Other benefits include: assisted living care; respite care; hospice care; adult day care.
Preferred Provider Organization (PPO)
Indeterminate Premium Whole Life policy
Long Term Care (LTC) policy
Group Disability plan
23. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.
Medicare Part C (aka Medicare Advantage)
Life insurance policy
Revocable vs. Irrevocable beneficiary
Point of Service plan
24. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).
Social Security Benefit (Supplement) rider
Preferred Provider Organization (PPO)
Insurable interest
Palliative vs. Curative care
25. Beneficiary has right to leave death benefits / Insurer to protect $ from creditors; interest (taxable) paid on retained funds.
Types of Accident & Health (A&H) providers
Primary Insurance Amount (PIA)
Rate (as defined by CIC)
Spendthrift provision
26. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.
Legal Action provision
Types of Renewability provisions
Renewability provision
Return of Premium rider
27. Funding mechanism whereby employer & employee share cost of premium. Upon death - benefit is shared between employer & beneficiary.
Split Dollar Plan
Departments of an Insurer
Workers' Compensation insurance
Annuity Classifications (5 of 5): # of lives
28. 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)
Return of Cash Value rider
Exclusions for Major Medical plan
Return of Premium rider
29. An unintentional mistake committed by an insurance representative; may be covered by E&O insurance.
Settlement options for Life policy (1 of 2)
Concealment
Errors & Omissions (E&O)
Trial Application (aka Request for Offer)
30. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.
Relation of Earnings to Insurance provision
Types of Insurers (by sector)
Indeterminate Premium Whole Life policy
Beneficiary provisions
31. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.
Common Accident provision
Dread Disease policy
Dividends
CHAMPUS (aka TriCare)
32. Intentional deception; grounds for rescission.
Fraud
Beneficiary provisions
Conformity with State Statute provision
Long Term Care (LTC) policy
33. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.
Credit Life policy
Common Life Exclusions
Palliative vs. Curative care
Rescission
34. Temp. coverage for set duration w/ death benefit ONLY (no cash value) - offers largest $ for lowest premium; renewable; convertible.
Term Life policy
Workers' Compensation insurance
Small Employer Medical Expense plan
Transplant/Cosmetic Surgery rider
35. 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
Guaranteed Insurability Life rider
Major Medical plan
Retrocession
36. Part A - Inpatient hospital deductibles vary on # of days; limited reserve days; finite benefit; 1st 3 pints blood; Part B - 20% co-payment.
Medicare Part A & B "Gaps"
Disability Income policy
Employer Liability
Social Security Benefit (Supplement) rider
37. Private sector (Commercial) - provides LA&H - P&C - & LTC; Public sector (Gov't) - provides flood - work. comp. - Medicare/Medicaid - Group Life (SGLI/FEGLI).
Modified Premium Whole Life policy
Medical Savings Account (MSA) & Health Savings Account (HSA)
Annuity Classifications (5 of 5): # of lives
Types of Insurers (by sector)
38. Fraternal - non-profit - members only; Reciprocal - unincorp'd org. - members insure each other; Lloyd's Assoc. - groups sharing risks; Surplus lines - special market risks.
Tax implications of medical plans
Dividends
Types of Insurers (miscellaneous)
Elimination (aka Waiting) period
39. Facultative - case by case agreements; Automatic/Treaty - automatic acceptance of risk percentage per previous agreement.
Small Employer Medical Expense plan
Types of reinsurance
Conformity with State Statute provision
Long Term Care (LTC) policy
40. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.
Phases of an annuity
Long Term Care (LTC) policy
Claim Form (aka Proof of Loss Form) provision
Pure risk vs. Speculative risk
41. Upon death - death benefit is paid + the aggregate of cash value accumulated to date; add-on to WL policy ONLY.
Concealment
Tax implications of Death Benefit & Cash Value
Types of Insurers (by authorization)
Return of Cash Value rider
42. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.
Cost of Living Adjustment (COLA) Life rider
Claim Form (aka Proof of Loss Form) provision
Annuity Classifications (2 of 5): When benefits begin
Business Continuation (aka Buy-Sell) Disability policy
43. 1: Tax-free lump sum; 2: Monthly pay-outs for fixed time; 3: Fixed monthly payments until depleted.
Suicide clause/provision
Settlement options for Life policy (1 of 2)
Medicaid/Medi-Cal
Return of Premium rider
44. Receipt whereby coverage incepts conditionally upon submission of full consideration and that all underwriting reqs. are met.
Insurability Type Conditional receipt
Needs approach (most common)
Health Reimbursement Account (HRA)
Common Life Exclusions
45. 4: Funds retained by Insurer until w/drawn - interest ONLY paid monthly (taxable); 5: Paid-up immediate annuity.
Payor (aka Waiver of Payor's Premium) rider
Group Disability plan
Settlement options for Life policy (2 of 2)
Enhanced Ordinary (aka Extraordinary) Whole Life policy
46. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Relation of Earnings to Insurance provision
Single Pay Whole Life policy
Estoppel
47. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.
Guaranteed Insurability Life rider
Trial Application (aka Request for Offer)
Loss of Earnings Test
Types of Insurers (by authorization)
48. Basic Medical; Major Medical; Comprehensive Major Medical
Concealment
Types of Medical Plans
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Health Reimbursement Account (HRA)
49. Process which prevents claim denial as a result of false statement or promise (made by Insurer) - which was relied upon by Insured.
Estoppel
Term Life policy
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Tax implications of an Estate
50. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.
Rescission
Phases of an annuity
Common Accident provision
Errors & Omissions (E&O)