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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. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.
Earned vs. Unearned premium
Dread Disease policy
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Medical cost containment (aka Managed care)
2. 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.
Annuity Classifications (5 of 5): # of lives
Valid life insurance contracts must identify...
Variable Life policy (2 of 2)
Beneficiary provisions
3. Coverage remains in effect for 31 days past premium due date; benefits paid during grace period would be deducted from sum.
Errors & Omissions (E&O)
Primary Insurance Amount (PIA)
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Grace Period provision
4. Intentional deception; grounds for rescission.
Recurrent disability clause/provision
Fraud
Departments of an Insurer
Doctrine of Comity
5. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.
Payor (aka Waiver of Payor's Premium) rider
Point of Service plan
Major Medical plan
Insuring clause/provision (aka Insuring Agreement)
6. Same as WL but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Return of Cash Value rider
Variable Life policy (1 of 2)
Grace Period provision
Guaranteed Insurability Life rider
7. Provides for continued operation of business if partner dies - by allowing surviving partner(s) to buy deceased partner's interest in business.
Business Continuation (aka Buy-Sell) policy
Business Overhead Expense (BOE) Disability policy
Incontestability clause/provision
Grace Period provision
8. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.
Flexible Spending Account (FSA)
Settlement options for Life policy (2 of 2)
Premium modes
Return of Cash Value rider
9. Insurance purchased by other Insurer(s) to spread or diversify risk; promotes industry stability.
Common Life Exclusions
Reinsurance
Types of Accident & Health (A&H) providers
CHAMPUS (aka TriCare)
10. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.
Primary Insurance Amount (PIA)
Medical cost containment (aka Managed care)
Residual disability rider
Family Income policy
11. 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.
Beneficiary provisions
Medicare Supplement or Medigap policy
Types of reinsurance
Rate (as defined by CIC)
12. 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.
CA Work. Comp. Statutes
Policy delivery
Exclusions to Work. Comp.
Peril vs. Hazard
13. An attempt to contain costs by employing various strategies - including wellness programs - preventative testing - outpatient & alternative procedures.
Family policy
Medical cost containment (aka Managed care)
Settlement options for Life policy (2 of 2)
1035 Exchange
14. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.
Employer Liability
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Adverse selection
Types of Agency Authority
15. Provides coverage for specific disease(s) - such as cancer or leukemia.
Accidental Death & Dismemberment (AD&D) Life policy
Dread Disease policy
Insuring clause/provision (aka Insuring Agreement)
Medicare Part D
16. An unintentional mistake committed by an insurance representative; may be covered by E&O insurance.
Errors & Omissions (E&O)
Reinsurance
Endowment Life policy
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
17. Allows policy owner to w/draw set % of death benefit upon verification of terminal illness w/ expectancy 12-24 mths.; generally tax-free.
Annuity
Binding receipt (aka Temporary Insurance Agreement)
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Key Employee Disability policy
18. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.
Annuity
Legal Action provision
Annuity Classifications (1 of 5): How premium is paid
Total disability (any-occupational definition)
19. Provides professional services - rehabilitation - training/re-training & related costs to assist Insured in returning to work.
Insurance contract characteristics (1 of 2)
Return of Premium rider
Payment of Premium provision
Rehabilitation rider
20. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.
Common Accident provision
Credit Life policy
Premium modes
Dental Plan
21. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.
Adverse selection
Dental Plan
Occupational Disability policy
Types of Insurers (by authorization)
22. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.
Age Discrimination in Employment Act (ADEA)
1035 Exchange
7 Pay Test
Trusts
23. 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.
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Preferred Provider Organization (PPO)
Major Medical plan
Time Limit on Certain Defenses provision
24. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.
Payment of Premium provision
Variable Universal Life policy
Estoppel
Medicaid/Medi-Cal
25. Agreement - Offer & acceptance; Consideration - application + premium; Legal capacity - licensed &/or competent; Legal purpose - public good.
Factors that determine premium
Elements to contract
Estoppel
Notice of Claim provision
26. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.
Insuring clause/provision (aka Insuring Agreement)
Tax implications of Disability policy
Incontestability clause/provision
Tax implications of Death Benefit & Cash Value
27. Temp. coverage for set duration w/ death benefit ONLY (no cash value) - offers largest $ for lowest premium; renewable; convertible.
Term Life policy
Total disability (as commonly defined)
Credit Life policy
Business Continuation (aka Buy-Sell) Disability policy
28. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.
Current Assumption (aka Interest-Sensitive) Whole Life policy
Palliative vs. Curative care
Phases of an annuity
Tax implications of an Estate
29. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Free Look provision
Tax implications of an Estate
Non-forfeiture options for WL policy
30. Private sector (Commercial) - provides LA&H - P&C - & LTC; Public sector (Gov't) - provides flood - work. comp. - Medicare/Medicaid - Group Life (SGLI/FEGLI).
Types of Insurers (by sector)
Limited Pay Whole Life policy
Adverse selection
Employer Liability
31. Process whereby a reinsurer reinsures w/ another reinsurer.
Types of Insurers (by authorization)
Retrocession
Premium modes
Modified Endowment Contract (MEC)
32. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.
Non-forfeiture options for WL policy
Types of Term Life policies
Exclusions for Major Medical plan
Transplant/Cosmetic Surgery rider
33. Same as WL but premium low for set # yrs. - THEN premiums vary (+ or -) based on Insurer's investment returns - w/ Gmax.
Flexible Spending Account (FSA)
Experience vs. Community rating in Group Health plan
Tax implications of Death Benefit & Cash Value
Indeterminate Premium Whole Life policy
34. Same as WL but w/ Level Term rider; upon death - pays monthly income for FULL term AFTER which pays full death benefit.
Payment of Premium provision
Tax implications of an Estate
Medicare
Family Maintenance policy
35. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.
Basic Medical plan
Permanent vs. Temporary disability
Single Pay Whole Life policy
Phases of an annuity
36. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.
Age Discrimination in Employment Act (ADEA)
Rate (as defined by CIC)
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Elimination (aka Waiting) period
37. Same as Comprehensive Major Medical but w/ integrated deductible; much more expensive.
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Concealment exceptions
Small Employer Medical Expense plan
Supplemental Major Medical plan
38. Written policy terms supersede oral statements made prior to policy issue.
Parole Pardon Rule
Convertibility provision
Disability Income policy
24 Hour Coverage (CA)
39. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.
Permanent vs. Temporary disability
Business Continuation (aka Buy-Sell) Disability policy
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Current Assumption (aka Interest-Sensitive) Whole Life policy
40. Federal law which prohibits companies w/ 15+ employees from decreasing coverage benefits for women affected by pregnancy or childbirth.
Limited Pay Whole Life policy
Civil Rights/Pregnancy Discrimination Act
Whole (aka Permanent or Straight) Life policy
Needs approach (most common)
41. Representation - oral or written statement made to best of knowledge or belief; Warranty - statement guaranteed/presumed/understood to be true.
Medicare Part C (aka Medicare Advantage)
Applicant Representations vs. Warranties
Juvenile Life (aka Jumping Juvenile) policy
CHAMPUS (aka TriCare)
42. Treating or mitigating loss exposures through 1: avoidance; 2: retention (deductibles); 3: sharing; 4: reduction; or 5: transfer.
Loss of Earnings Test
Medi-Cal Share Cost plan
Point of Service plan
Risk management
43. Compensates business for loss due to disability of key employee; premiums not deductible but benefits tax-free.
Key Employee Disability policy
Partial disability rider
Key Employee policy
Palliative vs. Curative care
44. 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.
Tax implications of Disability policy
Long Term Care (LTC) policy
Impairment (Exclusion) rider
Types of Licensed Producers
45. Peril is the CAUSE of loss. Hazard is a condition that increases LIKELIHOOD of loss.
Occupational Disability policy
Loss exposure
Peril vs. Hazard
Market Value Adjusted (aka Modified Guaranteed) annuity
46. Upon death - death benefit is paid + the aggregate of cash value accumulated to date; add-on to WL policy ONLY.
Types of Agency Authority
Return of Cash Value rider
Phases of an annuity
Family or Dependents rider
47. Potential circumstance that could cause a loss; measured in dollars.
Tax implications of an Annuity (1 of 2)
Health Maintenance Organization (HMO)
Loss exposure
Cost of Living Adjustment (COLA) Disability rider
48. Provides benefit during Social Security "black-out" period - up to 1 yr.
Social Security Benefit (Supplement) rider
Tax implications of an Annuity (1 of 2)
Survivorship (aka "Last to die") policy
Annuity
49. Employer w/ 25 or less employees must offer all eligible employees @ least 2 medical plan options where pre-existing conditions can't be excluded more than 1 yr.
Small Employer Medical Expense plan
7 Pay Test
Exclusions for Major Medical plan
Requirements to sell variable life products
50. Life license + NASD (FINRA) Series 6 or 7.
Requirements to sell variable life products
Proof of Loss provision
Key Employee policy
Palliative vs. Curative care