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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. Privately-provided or Medicare-provided (if no private carrier) prescription drug plans for qualified individuals but w/ premium - deductible & co-pay.
Applicant Representations vs. Warranties
Needs approach (most common)
Spendthrift provision
Medicare Part D
2. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Medicare Part D
Human Life Value approach
Accidental Death & Dismemberment (AD&D) Life policy
Cash value
3. Conditional - coverage is conditional; Personal - parties are people; Good faith - honesty/integrity; Fiduciary - req's financial trust.
Insurance contract characteristics (2 of 2)
Insurance contract characteristics (1 of 2)
Medi-Cal Share Cost plan
Medicaid/Medi-Cal
4. Funding mechanism whereby employer & employee share cost of premium. Upon death - benefit is shared between employer & beneficiary.
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Blackout Period
Split Dollar Plan
Premium modes
5. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.
Common Accident provision
Long Term Care (LTC) policy
Modified Endowment Contract (MEC)
Concealment
6. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.
Payment of Premium provision
Tax implications of an Estate
Exclusions for Major Medical plan
Adverse selection
7. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.
Variable Life policy (1 of 2)
Return of Cash Value rider
Claim Form (aka Proof of Loss Form) provision
Exclusions for Major Medical plan
8. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.
Joint Life (aka "First to die") policy
Change of Occupation provision
Underwriting risk categories
Employer-Administered plan
9. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.
Types of Accident & Health insurance
Palliative vs. Curative care
Variable Life policy (1 of 2)
Plans A-L of Medical Supplement or Medigap
10. Provides benefit during Social Security "black-out" period - up to 1 yr.
Incontestability clause/provision
Social Security Benefit (Supplement) rider
Credit Life policy
Family or Dependents rider
11. Domestic - within home state; Foreign - outside home state; Alien - outside home country.
Preferred Provider Organization (PPO)
Blackout Period
Medicare Part A (aka Hospital Insurance or HI)
Types of Insurers (by domicile)
12. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.
Family or Dependents rider
Annuity
Occupational Disability policy
Flexible Spending Account (FSA)
13. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.
Risk management
Types of Insurers (by ownership)
Impairment (Exclusion) rider
Spendthrift provision
14. Covers disabilities occurring ONLY "off" job; benefits do not overlap work. comp. (i.e. Group plan).
Exclusions to Work. Comp.
Non-Occupational Disability policy
Fraud
Valid life insurance contracts must identify...
15. Intentional OR unintentional failure to disclose material underwriting facts that should have been disclosed; grounds for policy rescission.
Premium modes
Medicare Supplement or Medigap policy
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Concealment
16. Both Contributory & Non-contributory Group policies are deductible to employer (not employee) but benefits are taxable. Individual policy premium is NOT deductible but benefit is received tax-free.
Policy loans
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Tax implications of Disability policy
Return of Cash Value rider
17. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.
Revocable vs. Irrevocable beneficiary
Types of Insurers (by domicile)
Total disability (any-occupational definition)
Age Discrimination in Employment Act (ADEA)
18. Same as Comprehensive Major Medical but w/ integrated deductible; much more expensive.
Parole Pardon Rule
Adjustable Whole Life policy
Supplemental Major Medical plan
Recurrent disability clause/provision
19. 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)
Common Disability Exclusions
Insurability Type Conditional receipt
Medicaid/Medi-Cal
20. Mathematical law stating the larger # of occurrences - the more predictable the losses; used to calculate premiums.
Law of Large Numbers
Health Insurance Portability and Accountability Act (HIPAA)
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Settlement options for Life policy (2 of 2)
21. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).
Insurable interest
Concealment exceptions
Annuity Classifications (1 of 5): How premium is paid
Graded Premium Whole Life policy
22. Prepaid med. benefits for "subscribers" @ approved facilities; many non-profit; Blue Cross - Hospital stays; Blue Shield - M.D. costs.
Endowment Life policy
Key Employee Disability policy
Blue Cross/Blue Shield
Law of Large Numbers
23. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Group Disability plan
Estoppel
Cash value
Health Insurance Portability and Accountability Act (HIPAA)
24. Process which prevents claim denial as a result of false statement or promise (made by Insurer) - which was relied upon by Insured.
Employee Retirement Income Security Act (ERISA)
Binding receipt (aka Temporary Insurance Agreement)
Entire Contract provision
Estoppel
25. Same as WL but w/ Level Term rider; upon death - pays monthly income for FULL term AFTER which pays full death benefit.
Annuity Classifications (3 of 5): Source of income
Errors & Omissions (E&O)
Family Maintenance policy
Experience vs. Community rating in Group Health plan
26. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.
Partial disability rider
Types of Renewability provisions
Common Accident provision
Underwriting risk categories
27. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.
Spendthrift provision
Juvenile Life (aka Jumping Juvenile) policy
Graded Premium Whole Life policy
Annuity Classifications (2 of 5): When benefits begin
28. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).
Common Life Exclusions
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Departments of an Insurer
Common Disability Exclusions
29. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).
Types of Insurers (by authorization)
Medicare Part C (aka Medicare Advantage)
Common Disaster (Simultaneous Death Act) clause/provision
Premium modes
30. Excludes coverage for suicide during 1st 2 yrs. ONLY but - if it does - all premiums must be returned to beneficiary.
Policy delivery
Suicide clause/provision
Rescission
Insurance contract characteristics (2 of 2)
31. Primary - if 2 or more - equally shared; Contingent (Secondary) - only if primary dead; Tertiary - only if both primary & secondary dead. If none listed - goes to estate.
Recurrent disability clause/provision
Beneficiary provisions
Types of reinsurance
Estoppel
32. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).
Cost of Living Adjustment (COLA) Life rider
Payment of Premium provision
Experience vs. Community rating in Group Health plan
Revocable vs. Irrevocable beneficiary
33. Provides for continued operation of business if partner dies - by allowing surviving partner(s) to buy deceased partner's interest in business.
Return of Premium rider
Rate (as defined by CIC)
Incontestability clause/provision
Business Continuation (aka Buy-Sell) policy
34. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.
Annuity Classifications (5 of 5): # of lives
Types of Agency Authority
Common Disaster (Simultaneous Death Act) clause/provision
Survivorship (aka "Last to die") policy
35. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.
Credit Life policy
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Phases of an annuity
Presumptive disability
36. Period of time following any children's survivor benefit & before benefits are provided to employee's widow/widower.
Blackout Period
Rescission
Palliative vs. Curative care
Misstatement of Age/Sex provision
37. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.
Free Look provision
Entire Contract provision
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Retrocession
38. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.
CA Work. Comp. Statutes
Variable Universal Life policy
Medicare Supplement or Medigap policy
Types of Licensed Producers
39. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.
Age Discrimination in Employment Act (ADEA)
Employer Liability
Levels of Long Term Care provided
Rehabilitation rider
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.
Point of Service plan
Life insurance policy
Waiver of Premium provision
Annuity
41. Beneficiary has right to leave death benefits / Insurer to protect $ from creditors; interest (taxable) paid on retained funds.
Spendthrift provision
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Types of Insurers (by sector)
Business Continuation (aka Buy-Sell) Disability policy
42. Reappearance of disability w/in 6 mth. period after "recovery" from same disability is considered recurrence - not new disability.
Recurrent disability clause/provision
Factors that determine premium
Medi-Cal Share Cost plan
Types of Licensed Producers
43. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Annuity Classifications (3 of 5): Source of income
Requirements to sell variable life products
Incontestability clause/provision
44. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.
Rate (as defined by CIC)
Blue Cross/Blue Shield
Adjustable Whole Life policy
Underwriting risk categories
45. 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.
Medical cost containment (aka Managed care)
Tax implications of an Estate
Social Security Benefit (Supplement) rider
Major Medical plan
46. Waives premium on Life policy for minor child until age 21 in event premium payor dies or becomes disabled.
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47. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.
Elements to contract
Earned vs. Unearned premium
Life insurance policy
Tax implications of Disability policy
48. Federal law to protect Federal employees' (& their beneficiaries') pension - group insurance - & welfare benefits.
Waiver of Premium provision
Employee Retirement Income Security Act (ERISA)
Free Look provision
Dividends
49. No-charge annuity w/drawals allowed up to 10% of total - THEN penalized on sliding scale based on # policy yrs.; conditionally waived.
Convertibility provision
Tax implications of Disability policy
Permanent vs. Temporary disability
Annuity surrender charges
50. 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.
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Family Income policy
Settlement options for Life policy (1 of 2)
Dividend options