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. Info already known; Info that should have been known; Waived info; Irrelevant info.






2. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.






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






4. An unintentional mistake committed by an insurance representative; may be covered by E&O insurance.






5. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.






6. Same as Universal Life but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.






7. Type of partial disability rider - which pays fluctuating % of lost income w/out time limit.






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






9. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).






10. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.






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






12. Prepaid med. benefits for members w/ approved primary care M.D. (independent); low co-pay; non-PPO M.D. can be used at higher cost.






13. Disability policy rider covering "the inability to perform some - but not all of your duties"; pays max. 50% of disability benefit for up to 6 mths.






14. Primary - if 2 or more - equally shared; Contingent (Secondary) - only if primary dead; Tertiary - only if both primary & secondary dead. If none listed - goes to estate.






15. Federal law which prohibits companies w/ 15+ employees from decreasing coverage benefits for women affected by pregnancy or childbirth.






16. Provides disability income during surgery recovery from life-threatening condition (& sometimes cosmetic surgery).






17. Available for any reason up to full cash value @ fixed (max 8%) OR variable interest rate; loan $ + interest deducted from benefit @ death.






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






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






20. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.






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






22. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.






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






24. Death benefit determined by Insured's financial goals & needs (minus assets).






25. Waives premium upon disability of Insured until return to work; disability must persist for 6 mths. or longer. Cash value & dividends not affected.






26. Process whereby a reinsurer reinsures w/ another reinsurer.






27. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.






28. WL policy covering 2 or more Insureds but ONLY payable upon death of LAST Insured - generally low premium but high death benefit.






29. Prepaid med. benefits for members ONLY w/ approved primary care M.D. (HMO employee); focus on preventative care; low co-pay.






30. Private sector (Commercial) - provides LA&H - P&C - & LTC; Public sector (Gov't) - provides flood - work. comp. - Medicare/Medicaid - Group Life (SGLI/FEGLI).






31. Intentional OR unintentional failure to disclose material underwriting facts that should have been disclosed; grounds for policy rescission.






32. Allows Term policy conversion to Permanent policy w/out medical exam; must be identical or lower death benefit; based on either attained OR original age.






33. Guaranteed min. interest rate on cash value buildup but possible higher rate if short-term investment returns higher than expected.






34. Allows Insured to increase death benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age.






35. Facultative - case by case agreements; Automatic/Treaty - automatic acceptance of risk percentage per previous agreement.






36. 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.






37. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.






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






39. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.






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






41. Qualified Annuity - Tax-deductible contributions & tax-deferred growth but fully taxable w/drawals.






42. Allows for use of HMO/PPO or other private carrier to provide expanded benefits @ additional premium & if enrolled in BOTH Parts A & B.






43. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.






44. Level - fixed death benefit - premium fixed until renewal; Decreasing - death benefit decreases over term - premium fixed until renewal; Increasing - death benefit increases over term - premium fixed until renewal.






45. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.






46. Domestic - within home state; Foreign - outside home state; Alien - outside home country.






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






48. 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.






49. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.






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