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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. 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.
Types of Licensed Producers
Market Value Adjusted (aka Modified Guaranteed) annuity
Long Term Care (LTC) policy
Annuity Classifications (5 of 5): # of lives
2. Responsible adult trustee designated to manage death benefits for minor child beneficiary until adulthood.
Approval Type Conditional receipt
Trusts
Medicare
Annuity Classifications (1 of 5): How premium is paid
3. Receipt whereby coverage incepts immediately upon submission of full consideration - unless declined & premium refunded.
Medical cost containment (aka Managed care)
Common Life Exclusions
Binding receipt (aka Temporary Insurance Agreement)
Total disability (any-occupational definition)
4. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.
Relation of Earnings to Insurance provision
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Considerations in replacing Health insurance
Types of Term Life policies
5. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.
Insurer (as defined by CIC)
Types of Licensed Producers
Payor (aka Waiver of Payor's Premium) rider
Policy delivery
6. 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.
Tax implications of an Estate
Life insurance policy
Revocable vs. Irrevocable beneficiary
Single Pay Whole Life policy
7. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.
Recurrent disability clause/provision
Phases of an annuity
IRS Penalties for Annuities
Medical Savings Account (MSA) & Health Savings Account (HSA)
8. 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.
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Partial disability rider
Valid life insurance contracts must identify...
Tax implications of medical plans
9. Waives premium on Life policy for minor child until age 21 in event premium payor dies or becomes disabled.
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10. Available for any reason up to full cash value @ fixed (max 8%) OR variable interest rate; loan $ + interest deducted from benefit @ death.
Presumptive disability
Policy loans
Spendthrift provision
Types of Renewability provisions
11. Peril is the CAUSE of loss. Hazard is a condition that increases LIKELIHOOD of loss.
24 Hour Coverage (CA)
Business Continuation (aka Buy-Sell) Disability policy
Insurance contract characteristics (1 of 2)
Peril vs. Hazard
12. Temp. coverage for set duration w/ death benefit ONLY (no cash value) - offers largest $ for lowest premium; renewable; convertible.
Term Life policy
Types of Medical Plans
24 Hour Coverage (CA)
Age Discrimination in Employment Act (ADEA)
13. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.
Mortality vs. Morbidity tables
Types of Insurers (by sector)
IRS Penalties for Annuities
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
14. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.
Revocable vs. Irrevocable beneficiary
Elimination (aka Waiting) period
Insurable interest
Medicare Part D
15. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.
Types of Agency Authority
Concealment exceptions
Business Continuation (aka Buy-Sell) Disability policy
Dividends
16. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.
Claim Form (aka Proof of Loss Form) provision
Valid life insurance contracts must identify...
Graded Premium Whole Life policy
Insuring clause/provision (aka Insuring Agreement)
17. No deductible coverage for: daily room/board; ancillary costs; surgeon &/or physician expense (for added premium).
Basic Medical plan
Impairment (Exclusion) rider
Juvenile Life (aka Jumping Juvenile) policy
Factors that determine premium
18. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.
Small Employer Medical Expense plan
Tax implications of an Annuity (1 of 2)
Insuring clause/provision (aka Insuring Agreement)
Waiver of Premium (Waiver of Cost of Insurance) rider
19. Prepaid med. benefits for members ONLY w/ approved primary care M.D. (HMO employee); focus on preventative care; low co-pay.
COBRA Time Limitations
Health Maintenance Organization (HMO)
Key Employee policy
Types of Insurers (by sector)
20. Written policy terms supersede oral statements made prior to policy issue.
Employer Liability
Parole Pardon Rule
Types of Accident & Health (A&H) providers
Binding receipt (aka Temporary Insurance Agreement)
21. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.
Types of Insurers (by domicile)
Common Life Exclusions
Medicare Part A (aka Hospital Insurance or HI)
Trial Application (aka Request for Offer)
22. 'The inability to perform your OWN normal occupation or daily duties'.
Total disability (as commonly defined)
Limited Pay Whole Life policy
Occupational Disability policy
Needs approach (most common)
23. Covers entire family w/ WL for breadwinner & (convertible) Level Term for spouse & children (until certain age).
Guaranteed Insurability Life rider
Variable Life policy (1 of 2)
Family policy
Rate (as defined by CIC)
24. Provides benefit during Social Security "black-out" period - up to 1 yr.
Earned vs. Unearned premium
Social Security Benefit (Supplement) rider
Occupational Disability policy
Point of Service plan
25. War - 2 types; Suicide (1st 2 yrs.); Aviation (non-commercial); Hazardous hobbies; Criminal acts; Alcohol/Drug influenced.
Types of Insurers (by ownership)
Total disability (more restrictive definition)
Policy delivery
Common Life Exclusions
26. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Incontestability clause/provision
Health Reimbursement Account (HRA)
Beneficiary provisions
Key Employee policy
27. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.
Primary Insurance Amount (PIA)
Residual disability rider
Medicare Part A & B "Gaps"
Blackout Period
28. Unintentional - up to $1 -000 + legal $; Intentional - $1 -000-5 -000 + legal $; If harmful - misdemeanor + up to 1 yr. prison + up to $10 -000.
Penalties for violating AIDS/HIV privacy laws
Levels of Long Term Care provided
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Accidental Death & Dismemberment (AD&D) Disability rider
29. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.
Policy loans
Cash value
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Settlement options for Life policy (2 of 2)
30. Expands individual WL policy to include Term Life for dependents (spouse - children - etc.).
Annuity Classifications (2 of 5): When benefits begin
Guaranteed Insurability Life rider
Family or Dependents rider
Concealment
31. Covers disabilities occurring ONLY "off" job; benefits do not overlap work. comp. (i.e. Group plan).
Split Dollar Plan
Non-Occupational Disability policy
Juvenile Life (aka Jumping Juvenile) policy
Equity Indexed annuity
32. Premiums determined by target cash values or death benefit; partial cash value w/drawals allowed; transparent policy w/ unbundled premium.
Loss exposure
Considerations in replacing Health insurance
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Beneficiary provisions
33. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.
Accidental Death (aka Multiple Indemnity) rider
Valid life insurance contracts must identify...
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Waiver of Premium provision
34. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.
Medicare Supplement or Medigap policy
Term Life policy
Life insurance policy
Tax implications of Disability policy
35. 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.
Primary Insurance Amount (PIA)
Types of Insurers (by ownership)
Small Employer Medical Expense plan
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
36. Permanent - not recoverable (spinal cord injury); Temporary - recoverable (temp. illness/injury - broken limb).
Departments of an Insurer
Health Reimbursement Account (HRA)
Health Maintenance Organization (HMO)
Permanent vs. Temporary disability
37. Excludes coverage for specific injury/illness either temporarily or permanently in order to eliminate pre-existing condition.
Permanent vs. Temporary disability
Impairment (Exclusion) rider
Major Medical plan
Peril vs. Hazard
38. Process whereby a reinsurer reinsures w/ another reinsurer.
Retrocession
Adverse selection
Current Assumption (aka Interest-Sensitive) Whole Life policy
Trusts
39. Combination of Basic Medical & Major Medical in one policy; Basic pays 1st - then Major Medical w/ corridor deductible.
Accidental Death & Dismemberment (AD&D) Disability rider
Comprehensive Major Medical plan
Medicare Part A (aka Hospital Insurance or HI)
Suicide clause/provision
40. Waives premium upon disability of Insured until return to work; disability must persist for 90 days or longer; 1st 90 day premiums refunded after 90 days.
Requirements to sell variable life products
Waiver of Premium provision
Indeterminate Premium Whole Life policy
Health Maintenance Organization (HMO)
41. Unilateral - Insurer provides contract; Adhesion - parties must adhere to terms; Aleatory - benefits may not inure equally.
CHAMPUS (aka TriCare)
Departments of an Insurer
Insurance contract characteristics (1 of 2)
Medicare Part A (aka Hospital Insurance or HI)
42. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.
Estoppel
Types of Medical Plans
Misstatement of Age/Sex provision
Fraud
43. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.
Binding receipt (aka Temporary Insurance Agreement)
Cross Purchase Plan
Types of hazards
Permanent vs. Temporary disability
44. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.
Non-forfeiture options for WL policy
Policy delivery
Whole (aka Permanent or Straight) Life policy
Experience vs. Community rating in Group Health plan
45. Pre-existing illness/injury; Waiting period; Elimination period; Probationary period; Benefits - Exclusions - Limitations; Underwriting reqs.
Considerations in replacing Health insurance
Family policy
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Types of Insurers (by sector)
46. Two death benefit options - Option A: death benefit ONLY; Option B: death benefit + cash value; death benefit NOT guaranteed.
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Trial Application (aka Request for Offer)
Family or Dependents rider
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
47. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.
Modified Premium Whole Life policy
Grace Period provision
Employee Retirement Income Security Act (ERISA)
Total disability (more restrictive definition)
48. PURELY employer-funded account to reimburse employees for qualified medical expenses not covered by group health plan.
Health Reimbursement Account (HRA)
Concealment exceptions
Entire Contract provision
Common Life Exclusions
49. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Approval Type Conditional receipt
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Reinsurance
50. Domestic - within home state; Foreign - outside home state; Alien - outside home country.
Types of Insurers (by domicile)
Equity Index Whole Life policy
Family or Dependents rider
Renewability provision