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Test your basic knowledge |
CA Life Agent Exam
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Subject
:
certifications
Instructions:
Answer 50 questions in 15 minutes.
If you are not ready to take this test, you can
study here
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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. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.
Rescission
Accidental Death & Dismemberment (AD&D) Disability rider
Point of Service plan
IRS Penalties for Annuities
2. Must be delivered in person or by certified - registered or 1st-class mail w/ signature - unless waived by Insurance Commissioner.
Medicare Part D
Health Insurance Portability and Accountability Act (HIPAA)
Policy delivery
Dividend options
3. Policy owner must notify Insurer of loss either in writing - in person or by phone w/in 20 days.
Joint Life (aka "First to die") policy
Insurability Type Conditional receipt
Change of Occupation provision
Notice of Claim provision
4. 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).
Types of Insurers (miscellaneous)
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Limited Pay Whole Life policy
Levels of Long Term Care provided
5. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.
Business Overhead Expense (BOE) Disability policy
Earned vs. Unearned premium
Modified Premium Whole Life policy
Common Disability Exclusions
6. Combination of Basic Medical & Major Medical in one policy; Basic pays 1st - then Major Medical w/ corridor deductible.
Renewability provision
Medicare
Comprehensive Major Medical plan
Blue Cross/Blue Shield
7. Same as WL but premium low for 1st 5 yrs. - THEN has annual premium increases for set # yrs. - THEN level premium.
Tax implications of an Annuity (1 of 2)
Equity Indexed annuity
Medicare Part D
Graded Premium Whole Life policy
8. If Insured changes to: more hazardous job - benefits reduced; less hazardous job - premiums reduce.
Change of Occupation provision
Accidental Death (aka Multiple Indemnity) rider
Elements to contract
Endowment Life policy
9. Fixed premium w/ guaranteed min. death benefit that may increase due to higher than expected investment returns.
Partial disability rider
Tax implications of an Annuity (1 of 2)
Penalties for violating AIDS/HIV privacy laws
Variable Life policy (2 of 2)
10. Benefits NOT taxable; employer-paid premiums deductible to employer; individual plans not deductible unless over 7 1/2% of adjusted gross income - then excess deductible.
Key Employee policy
Tax implications of medical plans
Suicide clause/provision
Employer-Administered plan
11. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.
Annuity Classifications (2 of 5): When benefits begin
Cross Purchase Plan
24 Hour Coverage (CA)
Disability Income policy
12. Insurance purchased by other Insurer(s) to spread or diversify risk; promotes industry stability.
Types of Accident & Health (A&H) providers
Reinstatement provision
Fraud
Reinsurance
13. Peril is the CAUSE of loss. Hazard is a condition that increases LIKELIHOOD of loss.
Peril vs. Hazard
Annuity Classifications (2 of 5): When benefits begin
Types of hazards
Equity Index Whole Life policy
14. 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.
COBRA Time Limitations
Tax implications of an Annuity (1 of 2)
Premium modes
Health Insurance Portability and Accountability Act (HIPAA)
15. 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.
Change of Occupation provision
Tax implications of an Annuity (1 of 2)
Legal Action provision
Types of Insurers (by sector)
16. 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.
Insurability Type Conditional receipt
Tax implications of Disability policy
Preferred Provider Organization (PPO)
Civil Rights/Pregnancy Discrimination Act
17. Time extension of benefits based on "qualifying" event. 18 mth. extension if laid off or fired; 36 mth. extension if death - divorce or child leaves home.
Medicare Part D
Workers' Compensation insurance
Payment of Premium provision
COBRA Time Limitations
18. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.
Plans A-L of Medical Supplement or Medigap
Types of Renewability provisions
Cost of Living Adjustment (COLA) Life rider
Total disability (as commonly defined)
19. Federal law which prohibits companies w/ 15+ employees from decreasing coverage benefits for women affected by pregnancy or childbirth.
Civil Rights/Pregnancy Discrimination Act
Dividends
Types of Term Life policies
Occupational Disability policy
20. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Dental Plan
Binding receipt (aka Temporary Insurance Agreement)
Cost of Living Adjustment (COLA) Life rider
21. Savings account for medical expenses; Tax-deductible contributions; tax-deferred growth; tax-free for qualified use; taxable for non-qualified use.
Family policy
Annuity Classifications (5 of 5): # of lives
Medical Savings Account (MSA) & Health Savings Account (HSA)
Exclusions to Work. Comp.
22. Covers disabilities occurring both "on" AND "off" job; "on" job benefits paid in addition to work. comp. - if applicable (i.e. individual plan).
Concealment
Medi-Cal Share Cost plan
Proof of Loss provision
Occupational Disability policy
23. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Modified Premium Whole Life policy
Accidental Death & Dismemberment (AD&D) Life policy
Equity Indexed annuity
24. Mortality is the statistical possibility of death @ each age. Morbidity is the statistical possibility & extent of disability @ each age.
Rate (as defined by CIC)
Mortality vs. Morbidity tables
Accidental Death & Dismemberment (AD&D) Disability rider
Insurance contract characteristics (1 of 2)
25. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.
Loss exposure
Medicare Part D
Business Overhead Expense (BOE) Disability policy
Annuity Classifications (3 of 5): Source of income
26. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.
Claim Form (aka Proof of Loss Form) provision
Health Reimbursement Account (HRA)
Non-forfeiture options for WL policy
Consolidated Omnibus Budget Reconciliation Act (COBRA)
27. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Family or Dependents rider
Key Employee policy
Medicare
Misstatement of Age/Sex provision
28. PURELY employer-funded account to reimburse employees for qualified medical expenses not covered by group health plan.
Health Reimbursement Account (HRA)
Types of Accident & Health insurance
Exclusions to Work. Comp.
Indeterminate Premium Whole Life policy
29. Same as WL but w/ Decreasing Term rider; upon death - pays monthly income for REMAINING term AFTER which pays full death benefit.
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Concealment exceptions
Family Income policy
Current Assumption (aka Interest-Sensitive) Whole Life policy
30. Same as WL but cash value increases @ current interest rates (not set); premium can start low or high & may change.
Social Security Benefit (Supplement) rider
Tax implications of Death Benefit & Cash Value
Current Assumption (aka Interest-Sensitive) Whole Life policy
Automatic Premium Loan (APL) provision
31. A company providing lump sum buyout (50-90% of total) of Life policy; becomes owner & beneficiary & assumes premium payments; usually terminally ill viator.
Errors & Omissions (E&O)
Loss of Earnings Test
Major Medical plan
Viatical Settlement Provider (VSP)
32. Intentional OR unintentional failure to disclose material underwriting facts that should have been disclosed; grounds for policy rescission.
Concealment
Types of Insurers (miscellaneous)
Parole Pardon Rule
Notice of Claim provision
33. Federal law which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.
Common Life Exclusions
Age Discrimination in Employment Act (ADEA)
Penalties for violating AIDS/HIV privacy laws
Dependent coverage
34. 1: Req. - unless self-employed; 2: 7-day wait for disability benefits; 3: Premium based on ex-mod; 4: Rates approved by CDI; 5: to sell - must satisfy education reqs.
Concealment
Permanent vs. Temporary disability
CA Work. Comp. Statutes
Variable Universal Life policy
35. Available for any reason up to full cash value @ fixed (max 8%) OR variable interest rate; loan $ + interest deducted from benefit @ death.
Elements to contract
Total disability (any-occupational definition)
Policy loans
Free Look provision
36. Req. by CA statute & may provide workers coverage for action-over claims.
Equity Indexed annuity
Indeterminate Premium Whole Life policy
Comprehensive Major Medical plan
Employer Liability
37. Death benefit determined by Insured's financial goals & needs (minus assets).
Needs approach (most common)
Variable Life policy (1 of 2)
Family or Dependents rider
Limited Pay Whole Life policy
38. Covers disabilities occurring ONLY "off" job; benefits do not overlap work. comp. (i.e. Group plan).
Non-Occupational Disability policy
Free Look provision
Major Medical plan
Legal Action provision
39. Expands individual WL policy to include Term Life for dependents (spouse - children - etc.).
Beneficiary provisions
Insurance contract characteristics (1 of 2)
Departments of an Insurer
Family or Dependents rider
40. Dividends are NOT taxable but interest is. Loan interest is NOT tax-deductible. Interest paid by Insurer on retained funds is taxable.
Policy loans
Major Medical plan
Tax implications of Dividends - Loans & Interest
Medicare Part B (aka Supplemental Medical Insurance or SMI)
41. Upon death - death benefit is paid + the aggregate of premiums paid to date; add-on to Term policy ONLY.
Peril vs. Hazard
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Return of Premium rider
Medical cost containment (aka Managed care)
42. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.
Trusts
Business Overhead Expense (BOE) Disability policy
Levels of Long Term Care provided
7 Pay Test
43. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.
Current Assumption (aka Interest-Sensitive) Whole Life policy
Medi-Cal Share Cost plan
Exclusions for Major Medical plan
Juvenile Life (aka Jumping Juvenile) policy
44. Same as Comprehensive Major Medical but w/ integrated deductible; much more expensive.
Departments of an Insurer
Supplemental Major Medical plan
Levels of Long Term Care provided
Occupational Disability policy
45. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.
CA Work. Comp. Statutes
Mortality vs. Morbidity tables
Common Accident provision
Endowment Life policy
46. Waives premium upon disability of Insured until return to work; disability must persist for 6 mths. or longer. Cash value & dividends not affected.
Term Life policy
Presumptive disability
Waiver of Premium (Waiver of Cost of Insurance) rider
Current Assumption (aka Interest-Sensitive) Whole Life policy
47. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.
Primary Insurance Amount (PIA)
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Health Reimbursement Account (HRA)
Cost of Living Adjustment (COLA) Disability rider
48. Federal law to protect Federal employees' (& their beneficiaries') pension - group insurance - & welfare benefits.
Workers' Compensation insurance
Medicare Part C (aka Medicare Advantage)
Medicare Part A (aka Hospital Insurance or HI)
Employee Retirement Income Security Act (ERISA)
49. Potential circumstance that could cause a loss; measured in dollars.
Types of Licensed Producers
Family or Dependents rider
Earned vs. Unearned premium
Loss exposure
50. Benefits automatically increase annually based on inflationary index (i.e. Consumer Price Index) OR flat rate (5% max.).
Cost of Living Adjustment (COLA) Disability rider
Notice of Claim provision
Approval Type Conditional receipt
Types of hazards
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