Test your basic knowledge |

CA Life Agent Exam

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: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)






2. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.






3. Earned premium is $ paid for coverage to date. Unearned premium is $ paid & returnable due to coverage not provided.






4. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.






5. Funding mechanism whereby employer & employee share cost of premium. Upon death - benefit is shared between employer & beneficiary.






6. Group plan initially self-funded by employer (like SIR); after which - group plan Insurer covers (up to policy limit); requires TPA.






7. Mortality is the statistical possibility of death @ each age. Morbidity is the statistical possibility & extent of disability @ each age.






8. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.






9. Monthly; Quarterly; Semi-annually; Annually (cheapest due to less admin cost).






10. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.






11. War - 2 types; Suicide (1st 2 yrs.); Aviation (non-commercial); Hazardous hobbies; Criminal acts; Alcohol/Drug influenced.






12. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.






13. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.






14. Tendency of poorer risks to seek insurance.






15. Federally-funded but state-run program for truly indigent individuals & families providing medical care at Federal clinic.






16. Insurance purchased by other Insurer(s) to spread or diversify risk; promotes industry stability.






17. 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).






18. Two death benefit options - Option A: death benefit ONLY; Option B: death benefit + cash value; death benefit NOT guaranteed.






19. Prepaid med. benefits for "subscribers" @ approved facilities; many non-profit; Blue Cross - Hospital stays; Blue Shield - M.D. costs.






20. Treating or mitigating loss exposures through 1: avoidance; 2: retention (deductibles); 3: sharing; 4: reduction; or 5: transfer.






21. Reappearance of disability w/in 6 mth. period after "recovery" from same disability is considered recurrence - not new disability.






22. Life license + NASD (FINRA) Series 6 or 7.






23. 'The inability to perform your OWN normal occupation or daily duties'.






24. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.






25. Req. by CA statute & may provide workers coverage for action-over claims.






26. Compensates business for loss due to disability of key employee; premiums not deductible but benefits tax-free.






27. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).






28. Peril is the CAUSE of loss. Hazard is a condition that increases LIKELIHOOD of loss.






29. Same as WL but premium low for set # yrs. - THEN premiums vary (+ or -) based on Insurer's investment returns - w/ Gmax.






30. Identical to Incontestable Clause in Life policy.






31. 'The inability to perform ANY reasonable occupation based on education - training or experience'.






32. Grows @ fixed min. interest rate but w/ possible higher rate tied to equity index (i.e S&P Equity Index) appreciation; gains shared w/ Insurer.






33. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).






34. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").






35. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.






36. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.






37. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.






38. Provides % of monthly income benefit if Insured becomes disabled due to illness or accident.






39. Receipt whereby coverage incepts conditionally upon submission of full consideration and that all underwriting reqs. are met.






40. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.






41. A&H - A&S - Sickness only; Medical; Disability; Accident only; Travel accident; LTC; Medicare supplement; AD&D; Dental/Vision/Prescription; Limited.






42. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.






43. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.






44. Pre-existing illness/injury; Waiting period; Elimination period; Probationary period; Benefits - Exclusions - Limitations; Underwriting reqs.






45. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.






46. Death benefit is NOT taxable. Cash value grows tax-deferred but cost basis (base premium) is not taxable - only interest is.






47. Benefits automatically increase annually based on inflationary index (i.e. Consumer Price Index) OR flat rate (5% max.).






48. Dependent children are covered until 19 or 23 (full-time student only) or until self-sufficient (if handicapped).






49. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.






50. Process which prevents claim denial as a result of false statement or promise (made by Insurer) - which was relied upon by Insured.