SUBJECTS
|
BROWSE
|
CAREER CENTER
|
POPULAR
|
JOIN
|
LOGIN
Business Skills
|
Soft Skills
|
Basic Literacy
|
Certifications
About
|
Help
|
Privacy
|
Terms
Search
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. Refund of 50-80% of premium (minus claims paid) every 5-10 yrs. OR age 65; expensive!
Plans A-L of Medical Supplement or Medigap
Medi-Cal Share Cost plan
Entire Contract provision
Return of Premium rider
2. Conditional - coverage is conditional; Personal - parties are people; Good faith - honesty/integrity; Fiduciary - req's financial trust.
Peril vs. Hazard
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Permanent vs. Temporary disability
Insurance contract characteristics (2 of 2)
3. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.
Annuity
24 Hour Coverage (CA)
Occupational Disability policy
Payment of Premium provision
4. Allows for use of HMO/PPO or other private carrier to provide expanded benefits @ additional premium & if enrolled in BOTH Parts A & B.
Medicare Part C (aka Medicare Advantage)
Annuity Classifications (3 of 5): Source of income
Insurability Type Conditional receipt
Accidental Death (aka Multiple Indemnity) rider
5. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.
Trial Application (aka Request for Offer)
Medi-Cal Share Cost plan
Dividend options
Transplant/Cosmetic Surgery rider
6. A company providing lump sum buyout (50-90% of total) of Life policy; becomes owner & beneficiary & assumes premium payments; usually terminally ill viator.
Viatical Settlement Provider (VSP)
Types of reinsurance
Incontestability clause/provision
Employer-Administered plan
7. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.
Mortality vs. Morbidity tables
Annuity Classifications (5 of 5): # of lives
Annuity
Reinstatement provision
8. Permanent disability due to total loss of sight - hearing - speech or use of 2 + limbs; benefits paid even while continuing to work.
Presumptive disability
Time Limit on Certain Defenses provision
Accidental Death (aka Multiple Indemnity) rider
Earned vs. Unearned premium
9. 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.
Return of Premium rider
Annuity surrender charges
Beneficiary provisions
Human Life Value approach
10. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).
Errors & Omissions (E&O)
Proof of Loss provision
Waiver of Premium provision
1035 Exchange
11. Provides coverage for specific disease(s) - such as cancer or leukemia.
Payor (aka Waiver of Payor's Premium) rider
Dread Disease policy
Types of Insurers (miscellaneous)
Indeterminate Premium Whole Life policy
12. Permanent - not recoverable (spinal cord injury); Temporary - recoverable (temp. illness/injury - broken limb).
Tax implications of Disability policy
Trial Application (aka Request for Offer)
Permanent vs. Temporary disability
Endowment Life policy
13. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.
Market Value Adjusted (aka Modified Guaranteed) annuity
Revocable vs. Irrevocable beneficiary
Endowment Life policy
Dental Plan
14. Provides professional services - rehabilitation - training/re-training & related costs to assist Insured in returning to work.
Payment of Premium provision
Needs approach (most common)
Modified Premium Whole Life policy
Rehabilitation rider
15. Private sector (Commercial) - provides LA&H - P&C - & LTC; Public sector (Gov't) - provides flood - work. comp. - Medicare/Medicaid - Group Life (SGLI/FEGLI).
Cash value
Types of Insurers (by sector)
Health Insurance Portability and Accountability Act (HIPAA)
Types of reinsurance
16. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).
Errors & Omissions (E&O)
Policy loans
Common Disaster (Simultaneous Death Act) clause/provision
Insurable interest
17. 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.
Tax implications of medical plans
Modified Premium Whole Life policy
Types of hazards
Approval Type Conditional receipt
18. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.
Time Limit on Certain Defenses provision
Joint Life (aka "First to die") policy
Non-forfeiture options for WL policy
Health Maintenance Organization (HMO)
19. Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling - stock investment).
Business Continuation (aka Buy-Sell) Disability policy
Pure risk vs. Speculative risk
Joint Life (aka "First to die") policy
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
20. Same as WL but w/ adjustable death benefit (& corresponding premium) & over-fund option but w/ annually renewable term (ART).
Modified Premium Whole Life policy
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Types of Insurers (by sector)
Supplemental Major Medical plan
21. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.
Conformity with State Statute provision
Automatic Premium Loan (APL) provision
IRS Penalties for Annuities
Law of Large Numbers
22. 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
Occupational Disability policy
Types of Term Life policies
Group Disability plan
23. Qualified Annuity - Tax-deductible contributions & tax-deferred growth but fully taxable w/drawals.
Primary Insurance Amount (PIA)
Misstatement of Age/Sex provision
Tax implications of an Annuity (1 of 2)
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
24. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.
Credit Life policy
Modified Endowment Contract (MEC)
Common Disability Exclusions
Insuring clause/provision (aka Insuring Agreement)
25. Provides benefit during Social Security "black-out" period - up to 1 yr.
Common Accident provision
Social Security Benefit (Supplement) rider
Limited Pay Whole Life policy
Preferred Provider Organization (PPO)
26. An unintentional mistake committed by an insurance representative; may be covered by E&O insurance.
Transplant/Cosmetic Surgery rider
Settlement options for Life policy (2 of 2)
Return of Premium rider
Errors & Omissions (E&O)
27. Prohibited w/ regard to testing for people of same class; test results must remain confidential; coverage may be declined (once discovered).
Elements to contract
Entire Contract provision
Total disability (any-occupational definition)
AIDS/HIV discrimination
28. 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.
Dividend options
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Medical cost containment (aka Managed care)
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
29. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).
Types of Renewability provisions
Endowment Life policy
Annuity surrender charges
Types of Insurers (by authorization)
30. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.
Workers' Compensation insurance
Equity Index Whole Life policy
Suicide clause/provision
Concealment
31. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Loss of Earnings Test
Trial Application (aka Request for Offer)
Types of Renewability provisions
32. Same as WL but premium low for set # yrs. - THEN premiums vary (+ or -) based on Insurer's investment returns - w/ Gmax.
IRS Penalties for Annuities
Indeterminate Premium Whole Life policy
Common Life Exclusions
Loss exposure
33. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.
Annuity
Medi-Cal Share Cost plan
Types of reinsurance
Annuity Classifications (2 of 5): When benefits begin
34. Process whereby a reinsurer reinsures w/ another reinsurer.
AIDS/HIV discrimination
Insurable interest
Retrocession
Return of Premium rider
35. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.
Relation of Earnings to Insurance provision
Family Maintenance policy
Underwriting risk categories
Loss exposure
36. Type of partial disability rider - which pays fluctuating % of lost income w/out time limit.
Residual disability rider
Market Value Adjusted (aka Modified Guaranteed) annuity
Departments of an Insurer
Human Life Value approach
37. If Insured & primary beneficiary die due to same act (w/in 14 days) - primary assumed 1st to die & contingent beneficiary paid death benefit.
Tax implications of Death Benefit & Cash Value
Trusts
Settlement options for Life policy (1 of 2)
Common Disaster (Simultaneous Death Act) clause/provision
38. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.
Total disability (more restrictive definition)
Levels of Long Term Care provided
Law of Large Numbers
Transplant/Cosmetic Surgery rider
39. Allows Insured to increase death benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age.
1035 Exchange
Loss of Earnings Test
Guaranteed Insurability Life rider
Variable Universal Life policy
40. Potential circumstance that could cause a loss; measured in dollars.
Family Income policy
Loss exposure
Basic Medical plan
Common Disaster (Simultaneous Death Act) clause/provision
41. Mathematical law stating the larger # of occurrences - the more predictable the losses; used to calculate premiums.
Medicare Part A (aka Hospital Insurance or HI)
Law of Large Numbers
Variable Life policy (2 of 2)
Accidental Death & Dismemberment (AD&D) Life policy
42. Basic Medical; Major Medical; Comprehensive Major Medical
Types of Medical Plans
Family policy
Binding receipt (aka Temporary Insurance Agreement)
Concealment exceptions
43. War; elective cosmetic surgery; routine dental; work. comp.-covered claims; self-inflicted (intentional); gov't. facility treatment; LTC; private nursing.
Types of Insurers (by authorization)
Major Medical plan
Exclusions for Major Medical plan
Variable Life policy (2 of 2)
44. 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.
Payor (aka Waiver of Payor's Premium) rider
Waiver of Premium (Waiver of Cost of Insurance) rider
Plans A-L of Medical Supplement or Medigap
Supplemental Major Medical plan
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.
Joint Life (aka "First to die") policy
COBRA Time Limitations
Market Value Adjusted (aka Modified Guaranteed) annuity
Cross Purchase Plan
46. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).
Peril vs. Hazard
Blackout Period
Loss of Earnings Test
Waiver of Premium (Waiver of Cost of Insurance) rider
47. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.
Modified Premium Whole Life policy
Group Disability plan
Tax implications of an Annuity (1 of 2)
Incontestability clause/provision
48. Facultative - case by case agreements; Automatic/Treaty - automatic acceptance of risk percentage per previous agreement.
Types of reinsurance
Trial Application (aka Request for Offer)
Workers' Compensation insurance
Doctrine of Comity
49. Prepaid med. benefits for members ONLY w/ approved primary care M.D. (HMO employee); focus on preventative care; low co-pay.
Common Life Exclusions
Cross Purchase Plan
Health Maintenance Organization (HMO)
Rate (as defined by CIC)
50. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.
Estoppel
Departments of an Insurer
Automatic Premium Loan (APL) provision
Types of Insurers (by sector)