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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. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Business Overhead Expense (BOE) Disability policy
Impairment (Exclusion) rider
Insurable interest
Accidental Death & Dismemberment (AD&D) Life policy
2. The state in which the contract is accepted or delivered is the state that possesses regulatory jurisdiction over Group plan.
Doctrine of Comity
Insurance contract characteristics (1 of 2)
Annuity Classifications (1 of 5): How premium is paid
Risk management
3. Grows @ fixed interest rate for set term but cash value may adjust to prevailing rate (+ or -) if fully surrendered before term ends; % w/drawal ok.
Health Reimbursement Account (HRA)
Mortality vs. Morbidity tables
Variable Life policy (2 of 2)
Market Value Adjusted (aka Modified Guaranteed) annuity
4. Earned premium is $ paid for coverage to date. Unearned premium is $ paid & returnable due to coverage not provided.
Presumptive disability
Survivorship (aka "Last to die") policy
Earned vs. Unearned premium
Family Maintenance policy
5. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Permanent vs. Temporary disability
Flexible Spending Account (FSA)
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Key Employee policy
6. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.
Residual disability rider
Legal Action provision
Medi-Cal Share Cost plan
Palliative vs. Curative care
7. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.
Dread Disease policy
Medicare Part D
Types of reinsurance
Joint Life (aka "First to die") policy
8. Intentional deception; grounds for rescission.
Common Disability Exclusions
Family or Dependents rider
Family Maintenance policy
Fraud
9. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Group Disability plan
Employer Liability
IRS Penalties for Annuities
10. Identical to Incontestable Clause in Life policy.
Types of Renewability provisions
7 Pay Test
Time Limit on Certain Defenses provision
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
11. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.
Errors & Omissions (E&O)
Viatical Settlement Provider (VSP)
7 Pay Test
Group Disability plan
12. Req. by CA statute & may provide workers coverage for action-over claims.
Rescission
Age Discrimination in Employment Act (ADEA)
Change of Occupation provision
Employer Liability
13. Excludes coverage for suicide during 1st 2 yrs. ONLY but - if it does - all premiums must be returned to beneficiary.
Beneficiary provisions
Plans A-L of Medical Supplement or Medigap
Revocable vs. Irrevocable beneficiary
Suicide clause/provision
14. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.
Mortality vs. Morbidity tables
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Automatic Premium Loan (APL) provision
Medical cost containment (aka Managed care)
15. Covers disabilities occurring both "on" AND "off" job; "on" job benefits paid in addition to work. comp. - if applicable (i.e. individual plan).
Common Accident provision
Blue Cross/Blue Shield
Social Security Benefit (Supplement) rider
Occupational Disability policy
16. Savings account for medical expenses; Tax-deductible contributions; tax-deferred growth; tax-free for qualified use; taxable for non-qualified use.
Medical Savings Account (MSA) & Health Savings Account (HSA)
Misstatement of Age/Sex provision
Family Maintenance policy
Estoppel
17. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.
Grace Period provision
Penalties for violating AIDS/HIV privacy laws
Trial Application (aka Request for Offer)
Types of Renewability provisions
18. Premiums determined by target cash values or death benefit; partial cash value w/drawals allowed; transparent policy w/ unbundled premium.
Presumptive disability
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
CHAMPUS (aka TriCare)
Annuity Classifications (3 of 5): Source of income
19. No deductible coverage for: daily room/board; ancillary costs; surgeon &/or physician expense (for added premium).
Basic Medical plan
Return of Premium rider
Types of Insurers (by sector)
Juvenile Life (aka Jumping Juvenile) policy
20. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.
Doctrine of Comity
Rehabilitation rider
Insuring clause/provision (aka Insuring Agreement)
Retrocession
21. Mandatory 100% employer-funded coverage for injuries/illnesses occurring "on" job; full-time employees only; exclusive remedy. Provides: 1: unlimited medical benefit; 2: survivor income replacement & funeral ($5 -000 max.); 3: disability benefit @ 66
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22. Federal law which prohibits companies w/ 15+ employees from decreasing coverage benefits for women affected by pregnancy or childbirth.
Presumptive disability
Employee Retirement Income Security Act (ERISA)
Limited Pay Whole Life policy
Civil Rights/Pregnancy Discrimination Act
23. Prohibited w/ regard to testing for people of same class; test results must remain confidential; coverage may be declined (once discovered).
Time Limit on Certain Defenses provision
Common Accident provision
Cost of Living Adjustment (COLA) Disability rider
AIDS/HIV discrimination
24. An unintentional mistake committed by an insurance representative; may be covered by E&O insurance.
Errors & Omissions (E&O)
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Trusts
7 Pay Test
25. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.
Modified Endowment Contract (MEC)
Primary Insurance Amount (PIA)
Graded Premium Whole Life policy
Juvenile Life (aka Jumping Juvenile) policy
26. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Medicare
Considerations in replacing Health insurance
Point of Service plan
Accidental Death & Dismemberment (AD&D) Disability rider
27. Unintentional - up to $1 -000 + legal $; Intentional - $1 -000-5 -000 + legal $; If harmful - misdemeanor + up to 1 yr. prison + up to $10 -000.
Settlement options for Life policy (1 of 2)
Penalties for violating AIDS/HIV privacy laws
Palliative vs. Curative care
Accidental Death (aka Multiple Indemnity) rider
28. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.
Group Disability plan
Return of Premium rider
IRS Penalties for Annuities
Incontestability clause/provision
29. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.
Elimination (aka Waiting) period
Total disability (any-occupational definition)
Trial Application (aka Request for Offer)
Employer Liability
30. Responsible adult trustee designated to manage death benefits for minor child beneficiary until adulthood.
Trusts
Medicaid/Medi-Cal
Human Life Value approach
Disability Income policy
31. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.
Annuity
Types of Term Life policies
Medi-Cal Share Cost plan
Rescission
32. Private sector (Commercial) - provides LA&H - P&C - & LTC; Public sector (Gov't) - provides flood - work. comp. - Medicare/Medicaid - Group Life (SGLI/FEGLI).
Family Maintenance policy
Revocable vs. Irrevocable beneficiary
Types of Insurers (by sector)
Phases of an annuity
33. Permanent disability due to total loss of sight - hearing - speech or use of 2 + limbs; benefits paid even while continuing to work.
Payment of Premium provision
Needs approach (most common)
Underwriting risk categories
Presumptive disability
34. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.
Premium modes
Non-forfeiture options for WL policy
Disability Income policy
Family Income policy
35. Policy owner must notify Insurer of loss either in writing - in person or by phone w/in 20 days.
Accidental Death (aka Multiple Indemnity) rider
Insurability Type Conditional receipt
Notice of Claim provision
Types of Renewability provisions
36. Coverage remains in effect for 31 days past premium due date; benefits paid during grace period would be deducted from sum.
Applicant Representations vs. Warranties
Medical Savings Account (MSA) & Health Savings Account (HSA)
Approval Type Conditional receipt
Grace Period provision
37. Although death benefit is tax-free - it is included in gross estate value so federal &/or state taxes may apply to a portion in excess of fixed federal limit.
Total disability (more restrictive definition)
Estoppel
Tax implications of an Estate
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
38. A company providing lump sum buyout (50-90% of total) of Life policy; becomes owner & beneficiary & assumes premium payments; usually terminally ill viator.
Viatical Settlement Provider (VSP)
Payor (aka Waiver of Payor's Premium) rider
Total disability (as commonly defined)
Employee Retirement Income Security Act (ERISA)
39. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.
Law of Large Numbers
Medicare
Binding receipt (aka Temporary Insurance Agreement)
Relation of Earnings to Insurance provision
40. Same as Term Life but provides living benefit (endowment) to policy owner if Insured survives entire term.
Family Income policy
Endowment Life policy
Types of Insurers (by authorization)
Accidental Death & Dismemberment (AD&D) Disability rider
41. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.
Loss exposure
Types of Accident & Health (A&H) providers
Pure risk vs. Speculative risk
Free Look provision
42. Compensates business for loss due to disability of key employee; premiums not deductible but benefits tax-free.
CHAMPUS (aka TriCare)
Whole (aka Permanent or Straight) Life policy
Key Employee Disability policy
Incontestability clause/provision
43. Provides benefit during Social Security "black-out" period - up to 1 yr.
Waiver of Premium (Waiver of Cost of Insurance) rider
Market Value Adjusted (aka Modified Guaranteed) annuity
Social Security Benefit (Supplement) rider
Types of Medical Plans
44. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.
Adverse selection
Renewability provision
Experience vs. Community rating in Group Health plan
Trusts
45. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.
Equity Index Whole Life policy
Whole (aka Permanent or Straight) Life policy
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Types of Insurers (by ownership)
46. 1: Cash (tax-free); 2: Apply to future premiums; 3: Retained by Insurer @ interest; 4: Buy Paid-up WL policy add-ons; 5: Pay-up existing policy; 6: Buy 1-yr. Term policy.
Dependent coverage
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Dividend options
Medical Savings Account (MSA) & Health Savings Account (HSA)
47. Fraternal - non-profit - members only; Reciprocal - unincorp'd org. - members insure each other; Lloyd's Assoc. - groups sharing risks; Surplus lines - special market risks.
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Medicare Supplement or Medigap policy
Types of Insurers (miscellaneous)
Health Maintenance Organization (HMO)
48. Federally-sponsored health care for individuals 65+ &/or w/ certain disabilities; may run concurrent w/ group plan but group plan would act primary - THEN Medicare.
Age Discrimination in Employment Act (ADEA)
Levels of Long Term Care provided
Medicare
Joint Life (aka "First to die") policy
49. Beneficiary has right to leave death benefits / Insurer to protect $ from creditors; interest (taxable) paid on retained funds.
Spendthrift provision
Health Insurance Portability and Accountability Act (HIPAA)
Factors that determine premium
Trial Application (aka Request for Offer)
50. Physical - slippery floor; Moral - dishonest acts; Morale - carelessness or recklessness.
Reinsurance
Types of hazards
Revocable vs. Irrevocable beneficiary
Cost of Living Adjustment (COLA) Disability rider