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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. Federal law which allows health coverage portability when changing jobs - so long as previous coverage was in effect 63+ days; allows some tax deductibility for LTC.
Permanent vs. Temporary disability
Exclusions for Major Medical plan
Small Employer Medical Expense plan
Health Insurance Portability and Accountability Act (HIPAA)
2. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.
Retrocession
Experience vs. Community rating in Group Health plan
Occupational Disability policy
Renewability provision
3. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.
Total disability (more restrictive definition)
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Types of reinsurance
Total disability (as commonly defined)
4. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.
Dental Plan
Types of Accident & Health insurance
Tax implications of Death Benefit & Cash Value
Comprehensive Major Medical plan
5. Fraternal - non-profit - members only; Reciprocal - unincorp'd org. - members insure each other; Lloyd's Assoc. - groups sharing risks; Surplus lines - special market risks.
Health Maintenance Organization (HMO)
Earned vs. Unearned premium
Occupational Disability policy
Types of Insurers (miscellaneous)
6. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.
Insurance contract characteristics (2 of 2)
Types of hazards
Policy delivery
Cash value
7. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.
Human Life Value approach
Permanent vs. Temporary disability
Non-forfeiture options for WL policy
Insurability Type Conditional receipt
8. Process which prevents claim denial as a result of false statement or promise (made by Insurer) - which was relied upon by Insured.
Estoppel
Tax implications of Disability policy
Free Look provision
Annuity Classifications (1 of 5): How premium is paid
9. Combination of Basic Medical & Major Medical in one policy; Basic pays 1st - then Major Medical w/ corridor deductible.
Comprehensive Major Medical plan
Tax implications of an Annuity (1 of 2)
Modified Endowment Contract (MEC)
7 Pay Test
10. Price of insurance per exposure unit.
Age Discrimination in Employment Act (ADEA)
Rate (as defined by CIC)
Human Life Value approach
Rehabilitation rider
11. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.
Juvenile Life (aka Jumping Juvenile) policy
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Current Assumption (aka Interest-Sensitive) Whole Life policy
12. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.
Viatical Settlement Provider (VSP)
Time Limit on Certain Defenses provision
Whole (aka Permanent or Straight) Life policy
Comprehensive Major Medical plan
13. Allows policy owner to w/draw set % of death benefit upon verification of terminal illness w/ expectancy 12-24 mths.; generally tax-free.
AIDS/HIV discrimination
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Waiver of Premium (Waiver of Cost of Insurance) rider
14. Peril is the CAUSE of loss. Hazard is a condition that increases LIKELIHOOD of loss.
Policy delivery
Adjustable Whole Life policy
Peril vs. Hazard
Family or Dependents rider
15. Federal law which prohibits companies w/ 15+ employees from decreasing coverage benefits for women affected by pregnancy or childbirth.
CA Work. Comp. Statutes
Legal Action provision
Elements to contract
Civil Rights/Pregnancy Discrimination Act
16. No-charge annuity w/drawals allowed up to 10% of total - THEN penalized on sliding scale based on # policy yrs.; conditionally waived.
Whole (aka Permanent or Straight) Life policy
Annuity surrender charges
Total disability (more restrictive definition)
Life insurance policy
17. Type of partial disability rider - which pays fluctuating % of lost income w/out time limit.
Residual disability rider
Rescission
Variable Life policy (2 of 2)
Graded Premium Whole Life policy
18. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.
Annuity Classifications (3 of 5): Source of income
Key Employee Disability policy
Claim Form (aka Proof of Loss Form) provision
Parole Pardon Rule
19. 4: Funds retained by Insurer until w/drawn - interest ONLY paid monthly (taxable); 5: Paid-up immediate annuity.
Estoppel
Beneficiary provisions
Settlement options for Life policy (2 of 2)
Waiver of Premium (Waiver of Cost of Insurance) rider
20. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.
Annuity
Health Maintenance Organization (HMO)
Phases of an annuity
Insurance contract characteristics (2 of 2)
21. Allows Insured to increase death benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age.
Risk management
Guaranteed Insurability Life rider
Settlement options for Life policy (1 of 2)
Insurance contract characteristics (1 of 2)
22. Period of time following any children's survivor benefit & before benefits are provided to employee's widow/widower.
Blackout Period
Cross Purchase Plan
Modified Premium Whole Life policy
Equity Indexed annuity
23. 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
Annuity Classifications (5 of 5): # of lives
Misstatement of Age/Sex provision
Plans A-L of Medical Supplement or Medigap
24. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.
Free Look provision
Policy loans
Adverse selection
Claim Form (aka Proof of Loss Form) provision
25. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.
Approval Type Conditional receipt
Loss of Earnings Test
IRS Penalties for Annuities
Elimination (aka Waiting) period
26. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.
Policy delivery
Health Maintenance Organization (HMO)
Misstatement of Age/Sex provision
Annuity Classifications (5 of 5): # of lives
27. No coverage for injuries while: 1: @ voluntary social event; 2: self-inflicted (intentional); 3: under alcohol/drug influence; 4: committing criminal act; 5: aggressor in workplace fight; 6: participating in athletic event (non-pro. athletes) 7: par
Exclusions to Work. Comp.
Change of Occupation provision
Waiver of Premium provision
Law of Large Numbers
28. An unintentional mistake committed by an insurance representative; may be covered by E&O insurance.
Types of reinsurance
Errors & Omissions (E&O)
Policy loans
Rate (as defined by CIC)
29. 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.
Accidental Death & Dismemberment (AD&D) Life policy
Medicare
Presumptive disability
Credit Life policy
30. Federal law which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.
Impairment (Exclusion) rider
Automatic Premium Loan (APL) provision
Age Discrimination in Employment Act (ADEA)
Whole (aka Permanent or Straight) Life policy
31. Provides professional services - rehabilitation - training/re-training & related costs to assist Insured in returning to work.
Business Continuation (aka Buy-Sell) Disability policy
Rehabilitation rider
Risk management
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
32. Potential circumstance that could cause a loss; measured in dollars.
Variable Universal Life policy
Annuity Classifications (2 of 5): When benefits begin
Loss exposure
Proof of Loss provision
33. Treating or mitigating loss exposures through 1: avoidance; 2: retention (deductibles); 3: sharing; 4: reduction; or 5: transfer.
Risk management
Employee Retirement Income Security Act (ERISA)
Waiver of Premium provision
Dividend options
34. Info already known; Info that should have been known; Waived info; Irrelevant info.
Concealment exceptions
Family policy
Social Security Benefit (Supplement) rider
Medicare Part D
35. Permanent disability due to total loss of sight - hearing - speech or use of 2 + limbs; benefits paid even while continuing to work.
Levels of Long Term Care provided
Presumptive disability
Exclusions for Major Medical plan
Elements to contract
36. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).
Civil Rights/Pregnancy Discrimination Act
Cost of Living Adjustment (COLA) Life rider
Types of Accident & Health (A&H) providers
Return of Premium rider
37. Prepaid med. benefits for "subscribers" @ approved facilities; many non-profit; Blue Cross - Hospital stays; Blue Shield - M.D. costs.
Risk management
Blue Cross/Blue Shield
Types of Agency Authority
Health Reimbursement Account (HRA)
38. Benefits automatically increase annually based on inflationary index (i.e. Consumer Price Index) OR flat rate (5% max.).
Cost of Living Adjustment (COLA) Disability rider
Spendthrift provision
Rehabilitation rider
Types of Accident & Health insurance
39. Plan A is the CORE benefit & is least expensive; All other plans include Plan A + additional benefits. Plans F & J are high deductible. K & L are both deductible & co-pay plans.
Phases of an annuity
Plans A-L of Medical Supplement or Medigap
Parole Pardon Rule
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
40. 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)
Graded Premium Whole Life policy
Insurance contract characteristics (2 of 2)
Free Look provision
41. If Insured changes to: more hazardous job - benefits reduced; less hazardous job - premiums reduce.
Change of Occupation provision
Premium modes
Tax implications of an Annuity (1 of 2)
Misstatement of Age/Sex provision
42. 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
Retrocession
Earned vs. Unearned premium
Rehabilitation rider
43. Dividends are NOT taxable but interest is. Loan interest is NOT tax-deductible. Interest paid by Insurer on retained funds is taxable.
Blue Cross/Blue Shield
Comprehensive Major Medical plan
Long Term Care (LTC) policy
Tax implications of Dividends - Loans & Interest
44. Premiums determined by target cash values or death benefit; partial cash value w/drawals allowed; transparent policy w/ unbundled premium.
24 Hour Coverage (CA)
Viatical Settlement Provider (VSP)
Long Term Care (LTC) policy
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
45. 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.
Notice of Claim provision
Market Value Adjusted (aka Modified Guaranteed) annuity
Annuity Classifications (2 of 5): When benefits begin
Family Income policy
46. Same as WL but premium low for 1st 5 yrs. - THEN has annual premium increases for set # yrs. - THEN level premium.
Graded Premium Whole Life policy
1035 Exchange
Family Income policy
Health Reimbursement Account (HRA)
47. Federal law to protect Federal employees' (& their beneficiaries') pension - group insurance - & welfare benefits.
Employee Retirement Income Security Act (ERISA)
Primary Insurance Amount (PIA)
AIDS/HIV discrimination
Transplant/Cosmetic Surgery rider
48. 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)
Mortality vs. Morbidity tables
Permanent vs. Temporary disability
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
49. 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.
Relation of Earnings to Insurance provision
Concealment exceptions
Tax implications of medical plans
Phases of an annuity
50. 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
Insuring clause/provision (aka Insuring Agreement)
Factors that determine premium
Cross Purchase Plan