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. Upon death - death benefit is paid + the aggregate of cash value accumulated to date; add-on to WL policy ONLY.






2. Agreement - Offer & acceptance; Consideration - application + premium; Legal capacity - licensed &/or competent; Legal purpose - public good.






3. Covers entire family w/ WL for breadwinner & (convertible) Level Term for spouse & children (until certain age).






4. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.






5. Reappearance of disability w/in 6 mth. period after "recovery" from same disability is considered recurrence - not new disability.






6. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.






7. No deductible coverage for: daily room/board; ancillary costs; surgeon &/or physician expense (for added premium).






8. Coverage remains in effect for 31 days past premium due date; benefits paid during grace period would be deducted from sum.






9. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.






10. Process whereby a reinsurer reinsures w/ another reinsurer.






11. 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.






12. Process which prevents claim denial as a result of false statement or promise (made by Insurer) - which was relied upon by Insured.






13. Death benefit is NOT taxable. Cash value grows tax-deferred but cost basis (base premium) is not taxable - only interest is.






14. Provides supplemental coverage for physician/surgeon fees if enrolled (during enrollment period ONLY) & pay monthly premium w/ deductible and co-insurance.






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






16. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.






17. A company providing lump sum buyout (50-90% of total) of Life policy; becomes owner & beneficiary & assumes premium payments; usually terminally ill viator.






18. Level - fixed death benefit - premium fixed until renewal; Decreasing - death benefit decreases over term - premium fixed until renewal; Increasing - death benefit increases over term - premium fixed until renewal.






19. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.






20. Provides % of monthly income benefit if Insured becomes disabled due to illness or accident.






21. Mathematical law stating the larger # of occurrences - the more predictable the losses; used to calculate premiums.






22. 4: Funds retained by Insurer until w/drawn - interest ONLY paid monthly (taxable); 5: Paid-up immediate annuity.






23. Group plan initially self-funded by employer (like SIR); after which - group plan Insurer covers (up to policy limit); requires TPA.






24. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.






25. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).






26. Tendency of poorer risks to seek insurance.






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






28. Physical - slippery floor; Moral - dishonest acts; Morale - carelessness or recklessness.






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






30. Responsible adult trustee designated to manage death benefits for minor child beneficiary until adulthood.






31. Expands individual WL policy to include Term Life for dependents (spouse - children - etc.).






32. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).






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






34. An unintentional mistake committed by an insurance representative; may be covered by E&O insurance.






35. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.






36. Same as WL but premium low for 1st 5 yrs. - THEN has annual premium increases for set # yrs. - THEN level premium.






37. Unintentional - up to $1 -000 + legal $; Intentional - $1 -000-5 -000 + legal $; If harmful - misdemeanor + up to 1 yr. prison + up to $10 -000.






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






39. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.






40. Death benefit determined by Insured's projected lost earnings potential.






41. Non-qualified Annuity - Non-deductible contributions & tax-deferred growth. At pay-out - tax-free principal but taxable growth.






42. Benefits automatically increase annually based on inflationary index (i.e. Consumer Price Index) OR flat rate (5% max.).






43. An attempt to contain costs by employing various strategies - including wellness programs - preventative testing - outpatient & alternative procedures.






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






45. Covers disabilities occurring both "on" AND "off" job; "on" job benefits paid in addition to work. comp. - if applicable (i.e. individual plan).






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






47. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.






48. Two death benefit options - Option A: death benefit ONLY; Option B: death benefit + cash value; death benefit NOT guaranteed.






49. 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.






50. Identical to Incontestable Clause in Life policy.