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. Waives premium on Life policy for minor child until age 21 in event premium payor dies or becomes disabled.

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2. If Insured changes to: more hazardous job - benefits reduced; less hazardous job - premiums reduce.






3. 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.






4. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)






5. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.






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






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






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






9. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.






10. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.






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






12. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.






13. Policy owner must notify Insurer of loss either in writing - in person or by phone w/in 20 days.






14. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.






15. PURELY employer-funded account to reimburse employees for qualified medical expenses not covered by group health plan.






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






17. 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.






18. Excludes coverage for specific injury/illness either temporarily or permanently in order to eliminate pre-existing condition.






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






20. 'The inability to perform ANY gainful occupation'.






21. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.






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






23. 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.






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






25. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.






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






27. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.






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






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






30. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).






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






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






33. Same as Term Life but provides living benefit (endowment) to policy owner if Insured survives entire term.






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






35. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.






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






37. Federal law which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.






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






39. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.






40. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.






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






42. Permanent disability due to total loss of sight - hearing - speech or use of 2 + limbs; benefits paid even while continuing to work.






43. 1: Tax-free lump sum; 2: Monthly pay-outs for fixed time; 3: Fixed monthly payments until depleted.






44. Same as WL but cash value increases @ current interest rates (not set); premium can start low or high & may change.






45. Tendency of poorer risks to seek insurance.






46. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.






47. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.






48. Receipt whereby coverage incepts immediately upon submission of full consideration - unless declined & premium refunded.






49. Dividends are NOT taxable but interest is. Loan interest is NOT tax-deductible. Interest paid by Insurer on retained funds is taxable.






50. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.