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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. Mathematical law stating the larger # of occurrences - the more predictable the losses; used to calculate premiums.
Life insurance policy
Law of Large Numbers
Beneficiary provisions
Medical cost containment (aka Managed care)
2. Permanent - not recoverable (spinal cord injury); Temporary - recoverable (temp. illness/injury - broken limb).
IRS Penalties for Annuities
Dividends
Permanent vs. Temporary disability
Reinstatement provision
3. Waives premium upon disability of Insured until return to work; disability must persist for 6 mths. or longer. Cash value & dividends not affected.
Waiver of Premium (Waiver of Cost of Insurance) rider
Suicide clause/provision
Basic Medical plan
Peril vs. Hazard
4. Same as Universal Life but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Variable Universal Life policy
COBRA Time Limitations
24 Hour Coverage (CA)
Doctrine of Comity
5. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.
Concealment exceptions
Limited Pay Whole Life policy
Adjustable Whole Life policy
Proof of Loss provision
6. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).
Loss of Earnings Test
Insurance contract characteristics (1 of 2)
IRS Penalties for Annuities
Total disability (any-occupational definition)
7. 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.
Needs approach (most common)
Factors that determine premium
Tax implications of an Estate
Reinsurance
8. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.
Dread Disease policy
Proof of Loss provision
Phases of an annuity
Concealment
9. Same as WL but premium low for 1st 5 yrs. - THEN has annual premium increases for set # yrs. - THEN level premium.
Blue Cross/Blue Shield
Graded Premium Whole Life policy
Insurable interest
Return of Cash Value rider
10. Provides 24 hr. health coverage both "on" & "off" job - but may cause coverage duplication & coordination challenges.
24 Hour Coverage (CA)
Waiver of Premium provision
Cost of Living Adjustment (COLA) Life rider
Types of Term Life policies
11. PURELY employer-funded account to reimburse employees for qualified medical expenses not covered by group health plan.
Types of Agency Authority
Health Reimbursement Account (HRA)
Loss of Earnings Test
Total disability (as commonly defined)
12. Prepaid med. benefits for members ONLY w/ approved primary care M.D. (HMO employee); focus on preventative care; low co-pay.
Total disability (any-occupational definition)
Health Maintenance Organization (HMO)
Accidental Death & Dismemberment (AD&D) Disability rider
Insurance contract characteristics (2 of 2)
13. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.
Dental Plan
Major Medical plan
Types of Renewability provisions
Common Disaster (Simultaneous Death Act) clause/provision
14. Domestic - within home state; Foreign - outside home state; Alien - outside home country.
Graded Premium Whole Life policy
Common Disability Exclusions
Tax implications of an Estate
Types of Insurers (by domicile)
15. Permanent disability due to total loss of sight - hearing - speech or use of 2 + limbs; benefits paid even while continuing to work.
Medicare Part C (aka Medicare Advantage)
Insurer (as defined by CIC)
Insurance contract characteristics (2 of 2)
Presumptive disability
16. Grows @ fixed min. interest rate but w/ possible higher rate tied to equity index (i.e S&P Equity Index) appreciation; gains shared w/ Insurer.
Time Limit on Certain Defenses provision
Medicare Part C (aka Medicare Advantage)
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Equity Indexed annuity
17. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.
Applicant Representations vs. Warranties
IRS Penalties for Annuities
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Basic Medical plan
18. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.
Relation of Earnings to Insurance provision
Doctrine of Comity
Juvenile Life (aka Jumping Juvenile) policy
Non-Occupational Disability policy
19. A&H - A&S - Sickness only; Medical; Disability; Accident only; Travel accident; LTC; Medicare supplement; AD&D; Dental/Vision/Prescription; Limited.
Common Accident provision
Settlement options for Life policy (2 of 2)
Return of Premium rider
Types of Accident & Health insurance
20. Death benefit is NOT taxable. Cash value grows tax-deferred but cost basis (base premium) is not taxable - only interest is.
Trusts
Concealment
Tax implications of Death Benefit & Cash Value
Medi-Cal Share Cost plan
21. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.
Change of Occupation provision
Human Life Value approach
Small Employer Medical Expense plan
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
22. Conditional - coverage is conditional; Personal - parties are people; Good faith - honesty/integrity; Fiduciary - req's financial trust.
Tax implications of an Annuity (1 of 2)
Rescission
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Insurance contract characteristics (2 of 2)
23. Coverage for catastrophic loss w/ high limits - front end deductible; co-insurance (80/20%); blanket coverage; stop loss max.
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Rescission
Tax implications of Disability policy
Major Medical plan
24. Pre-existing illness/injury; Waiting period; Elimination period; Probationary period; Benefits - Exclusions - Limitations; Underwriting reqs.
Considerations in replacing Health insurance
Waiver of Premium (Waiver of Cost of Insurance) rider
Health Reimbursement Account (HRA)
Rehabilitation rider
25. Mortality is the statistical possibility of death @ each age. Morbidity is the statistical possibility & extent of disability @ each age.
Experience vs. Community rating in Group Health plan
Mortality vs. Morbidity tables
Relation of Earnings to Insurance provision
Reinstatement provision
26. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.
Cross Purchase Plan
Types of Insurers (by authorization)
Binding receipt (aka Temporary Insurance Agreement)
Presumptive disability
27. Provides coverage for specific disease(s) - such as cancer or leukemia.
Claim Form (aka Proof of Loss Form) provision
Equity Index Whole Life policy
Dread Disease policy
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
28. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).
Factors that determine premium
Insurable interest
Cost of Living Adjustment (COLA) Disability rider
COBRA Time Limitations
29. Combination of Basic Medical & Major Medical in one policy; Basic pays 1st - then Major Medical w/ corridor deductible.
Point of Service plan
Types of Insurers (by domicile)
Comprehensive Major Medical plan
Civil Rights/Pregnancy Discrimination Act
30. 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
Reinsurance
Tax implications of an Annuity (1 of 2)
Medicare Part A & B "Gaps"
31. 1: Straight aka Pure Life - lifetime income but no survivorship refund; 2: Life w/ Period Certain - lifetime income w/ death benefit of monthly annuity for remaining predetermined term. 3: Annuity Certain - monthly income paid for predetermined term
Indeterminate Premium Whole Life policy
Health Maintenance Organization (HMO)
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Medical cost containment (aka Managed care)
32. 'The inability to perform your OWN normal occupation or daily duties'.
Entire Contract provision
7 Pay Test
Total disability (as commonly defined)
Waiver of Premium provision
33. Time extension of benefits based on "qualifying" event. 18 mth. extension if laid off or fired; 36 mth. extension if death - divorce or child leaves home.
Exclusions to Work. Comp.
Estoppel
COBRA Time Limitations
Annuity surrender charges
34. 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
Elimination (aka Waiting) period
Split Dollar Plan
Medical cost containment (aka Managed care)
Exclusions to Work. Comp.
35. Reappearance of disability w/in 6 mth. period after "recovery" from same disability is considered recurrence - not new disability.
Recurrent disability clause/provision
Tax implications of an Annuity (1 of 2)
Common Life Exclusions
Levels of Long Term Care provided
36. 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.
Types of Accident & Health (A&H) providers
Notice of Claim provision
Beneficiary provisions
Annuity
37. Earned premium is $ paid for coverage to date. Unearned premium is $ paid & returnable due to coverage not provided.
Relation of Earnings to Insurance provision
Health Maintenance Organization (HMO)
Earned vs. Unearned premium
Family or Dependents rider
38. Monthly; Quarterly; Semi-annually; Annually (cheapest due to less admin cost).
Premium modes
Payor (aka Waiver of Payor's Premium) rider
Exclusions for Major Medical plan
Concealment exceptions
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.
Types of Insurers (by sector)
Plans A-L of Medical Supplement or Medigap
Preferred Provider Organization (PPO)
Types of Term Life policies
40. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.
Insurer (as defined by CIC)
Annuity Classifications (3 of 5): Source of income
Accidental Death & Dismemberment (AD&D) Life policy
Human Life Value approach
41. Written policy terms supersede oral statements made prior to policy issue.
Parole Pardon Rule
Phases of an annuity
Family Income policy
Total disability (any-occupational definition)
42. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.
Medicare Supplement or Medigap policy
Rehabilitation rider
Beneficiary provisions
Dependent coverage
43. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.
Tax implications of an Annuity (1 of 2)
Annuity Classifications (5 of 5): # of lives
Misstatement of Age/Sex provision
Exclusions to Work. Comp.
44. Unilateral - Insurer provides contract; Adhesion - parties must adhere to terms; Aleatory - benefits may not inure equally.
Medicare Part A (aka Hospital Insurance or HI)
Accidental Death (aka Multiple Indemnity) rider
Insurance contract characteristics (1 of 2)
Family Maintenance policy
45. Prepaid med. benefits for "subscribers" @ approved facilities; many non-profit; Blue Cross - Hospital stays; Blue Shield - M.D. costs.
Waiver of Premium provision
Concealment
Risk management
Blue Cross/Blue Shield
46. Physical - slippery floor; Moral - dishonest acts; Morale - carelessness or recklessness.
Types of hazards
Comprehensive Major Medical plan
Split Dollar Plan
Rehabilitation rider
47. Same as WL but w/ Decreasing Term rider; upon death - pays monthly income for REMAINING term AFTER which pays full death benefit.
Annuity Classifications (1 of 5): How premium is paid
Family Income policy
Civil Rights/Pregnancy Discrimination Act
Health Reimbursement Account (HRA)
48. The state in which the contract is accepted or delivered is the state that possesses regulatory jurisdiction over Group plan.
Exclusions for Major Medical plan
Doctrine of Comity
Elimination (aka Waiting) period
Rate (as defined by CIC)
49. Price of insurance per exposure unit.
Valid life insurance contracts must identify...
Survivorship (aka "Last to die") policy
Viatical Settlement Provider (VSP)
Rate (as defined by CIC)
50. Waives premium on Life policy for minor child until age 21 in event premium payor dies or becomes disabled.
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