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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. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Revocable vs. Irrevocable beneficiary
Major Medical plan
Dental Plan
2. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Tax implications of Dividends - Loans & Interest
Claim Form (aka Proof of Loss Form) provision
COBRA Time Limitations
Key Employee policy
3. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.
Disability Income policy
Dental Plan
Cash value
Flexible Spending Account (FSA)
4. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.
Errors & Omissions (E&O)
Types of Renewability provisions
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Elements to contract
5. Intentional OR unintentional failure to disclose material underwriting facts that should have been disclosed; grounds for policy rescission.
Earned vs. Unearned premium
Cost of Living Adjustment (COLA) Life rider
Risk management
Concealment
6. Expands individual WL policy to include Term Life for dependents (spouse - children - etc.).
Family or Dependents rider
Change of Occupation provision
Premium modes
Insurance contract characteristics (1 of 2)
7. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.
Medicaid/Medi-Cal
Types of Accident & Health (A&H) providers
Incontestability clause/provision
Business Overhead Expense (BOE) Disability policy
8. Covers disabilities occurring ONLY "off" job; benefits do not overlap work. comp. (i.e. Group plan).
Types of Insurers (by ownership)
Types of Term Life policies
Tax implications of medical plans
Non-Occupational Disability policy
9. Govt. organization providing health care benefits for dependents of military personnel.
Dread Disease policy
Spendthrift provision
Conformity with State Statute provision
CHAMPUS (aka TriCare)
10. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.
Human Life Value approach
Variable Life policy (1 of 2)
IRS Penalties for Annuities
Business Continuation (aka Buy-Sell) Disability policy
11. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.
Tax implications of Disability policy
Indemnify
Point of Service plan
Exclusions to Work. Comp.
12. War; elective cosmetic surgery; routine dental; work. comp.-covered claims; self-inflicted (intentional); gov't. facility treatment; LTC; private nursing.
Medicare Part C (aka Medicare Advantage)
Term Life policy
Exclusions for Major Medical plan
Types of Insurers (by domicile)
13. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.
Accidental Death (aka Multiple Indemnity) rider
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Free Look provision
Insurability Type Conditional receipt
14. Prepaid med. benefits for members ONLY w/ approved primary care M.D. (HMO employee); focus on preventative care; low co-pay.
Reinstatement provision
Approval Type Conditional receipt
Health Maintenance Organization (HMO)
Limited Pay Whole Life policy
15. 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)
Dependent coverage
Cost of Living Adjustment (COLA) Life rider
Dividend options
16. Federal law allows employees/their dependents to continue group benefits w/in 60 days after termination (if employer has 20+ employees); Insured pays premium @ 102% of group cost.
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Comprehensive Major Medical plan
Errors & Omissions (E&O)
Reinstatement provision
17. Treating or mitigating loss exposures through 1: avoidance; 2: retention (deductibles); 3: sharing; 4: reduction; or 5: transfer.
Types of Licensed Producers
Risk management
Types of reinsurance
Common Life Exclusions
18. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.
Residual disability rider
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Types of Renewability provisions
Misstatement of Age/Sex provision
19. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.
Trial Application (aka Request for Offer)
Workers' Compensation insurance
Settlement options for Life policy (1 of 2)
Medi-Cal Share Cost plan
20. Coverage for catastrophic loss w/ high limits - front end deductible; co-insurance (80/20%); blanket coverage; stop loss max.
Valid life insurance contracts must identify...
Equity Index Whole Life policy
Major Medical plan
Medicare
21. Receipt whereby coverage incepts conditionally upon submission of full consideration and that all underwriting reqs. are met.
Insurability Type Conditional receipt
Valid life insurance contracts must identify...
Disability Income policy
Tax implications of an Annuity (1 of 2)
22. Death benefit is NOT taxable. Cash value grows tax-deferred but cost basis (base premium) is not taxable - only interest is.
Insurance contract characteristics (1 of 2)
Types of Renewability provisions
Rescission
Tax implications of Death Benefit & Cash Value
23. Federal law to protect Federal employees' (& their beneficiaries') pension - group insurance - & welfare benefits.
Market Value Adjusted (aka Modified Guaranteed) annuity
Payment of Premium provision
Return of Premium rider
Employee Retirement Income Security Act (ERISA)
24. 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.
Legal Action provision
AIDS/HIV discrimination
Tax implications of an Annuity (1 of 2)
Grace Period provision
25. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).
Annuity surrender charges
Employer Liability
Loss of Earnings Test
Notice of Claim provision
26. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.
Elimination (aka Waiting) period
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Total disability (any-occupational definition)
Payment of Premium provision
27. Insurance purchased by other Insurer(s) to spread or diversify risk; promotes industry stability.
Reinstatement provision
Reinsurance
Underwriting risk categories
Basic Medical plan
28. Combination of Basic Medical & Major Medical in one policy; Basic pays 1st - then Major Medical w/ corridor deductible.
Entire Contract provision
Reinsurance
Comprehensive Major Medical plan
Trial Application (aka Request for Offer)
29. Private sector (Commercial) - provides LA&H - P&C - & LTC; Public sector (Gov't) - provides flood - work. comp. - Medicare/Medicaid - Group Life (SGLI/FEGLI).
Blue Cross/Blue Shield
Types of Insurers (by sector)
Tax implications of medical plans
Point of Service plan
30. 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.
Loss of Earnings Test
Life insurance policy
Dividend options
Types of Renewability provisions
31. Dividends are NOT taxable but interest is. Loan interest is NOT tax-deductible. Interest paid by Insurer on retained funds is taxable.
Equity Index Whole Life policy
Legal Action provision
Tax implications of Dividends - Loans & Interest
Medi-Cal Share Cost plan
32. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.
Juvenile Life (aka Jumping Juvenile) policy
Phases of an annuity
Accidental Death & Dismemberment (AD&D) Disability rider
Return of Cash Value rider
33. Federal program financed by payroll taxes provided equally by both employer & employee OR entirely by individual (if self-employed). Provides benefits for: Medicare @ age 65+; retirement; $255 lump sum death benefit; (limited) disability; survivors;
Medical cost containment (aka Managed care)
Beneficiary provisions
Common Disability Exclusions
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
34. Same as WL but w/ adjustable death benefit (& corresponding premium) & over-fund option but w/ annually renewable term (ART).
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Guaranteed Insurability Life rider
Endowment Life policy
Business Continuation (aka Buy-Sell) policy
35. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.
Insurable interest
Blackout Period
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Tax implications of an Estate
36. Price of insurance per exposure unit.
Rate (as defined by CIC)
Common Disaster (Simultaneous Death Act) clause/provision
Annuity
Comprehensive Major Medical plan
37. 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.
Errors & Omissions (E&O)
Medicare Supplement or Medigap policy
Medicare
Waiver of Premium provision
38. Physical - slippery floor; Moral - dishonest acts; Morale - carelessness or recklessness.
Underwriting risk categories
Risk management
Types of hazards
Penalties for violating AIDS/HIV privacy laws
39. Same as Universal Life but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Medicare Part A (aka Hospital Insurance or HI)
Limited Pay Whole Life policy
Insurance contract characteristics (1 of 2)
Variable Universal Life policy
40. Qualified Annuity - Tax-deductible contributions & tax-deferred growth but fully taxable w/drawals.
Notice of Claim provision
Tax implications of an Annuity (1 of 2)
Dividend options
Endowment Life policy
41. Type of partial disability rider - which pays fluctuating % of lost income w/out time limit.
CHAMPUS (aka TriCare)
Residual disability rider
Blue Cross/Blue Shield
Levels of Long Term Care provided
42. Savings account for medical expenses; Tax-deductible contributions; tax-deferred growth; tax-free for qualified use; taxable for non-qualified use.
Survivorship (aka "Last to die") policy
Medical Savings Account (MSA) & Health Savings Account (HSA)
Types of Agency Authority
Levels of Long Term Care provided
43. The state in which the contract is accepted or delivered is the state that possesses regulatory jurisdiction over Group plan.
Workers' Compensation insurance
Impairment (Exclusion) rider
Types of Renewability provisions
Doctrine of Comity
44. Mortality is the statistical possibility of death @ each age. Morbidity is the statistical possibility & extent of disability @ each age.
Mortality vs. Morbidity tables
Payment of Premium provision
Needs approach (most common)
Types of Agency Authority
45. Disability policy rider covering "the inability to perform some - but not all of your duties"; pays max. 50% of disability benefit for up to 6 mths.
Convertibility provision
Partial disability rider
Types of Medical Plans
Family or Dependents rider
46. Fixed premium w/ guaranteed min. death benefit that may increase due to higher than expected investment returns.
Types of Insurers (miscellaneous)
Variable Life policy (2 of 2)
Workers' Compensation insurance
Parole Pardon Rule
47. Upon death - death benefit is paid + the aggregate of cash value accumulated to date; add-on to WL policy ONLY.
Exclusions for Major Medical plan
Return of Cash Value rider
Annuity
Palliative vs. Curative care
48. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.
Indeterminate Premium Whole Life policy
Dependent coverage
Cash value
Business Continuation (aka Buy-Sell) Disability policy
49. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.
Dental Plan
Market Value Adjusted (aka Modified Guaranteed) annuity
Relation of Earnings to Insurance provision
Types of Renewability provisions
50. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.
Types of Insurers (by ownership)
Annuity Classifications (5 of 5): # of lives
Guaranteed Insurability Life rider
Permanent vs. Temporary disability