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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. Waives premium on Life policy for minor child until age 21 in event premium payor dies or becomes disabled.
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2. If Insured changes to: more hazardous job - benefits reduced; less hazardous job - premiums reduce.
Insurance contract characteristics (1 of 2)
Health Reimbursement Account (HRA)
Change of Occupation provision
Loss of Earnings Test
3. 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.
Equity Indexed annuity
Types of Accident & Health (A&H) providers
Guaranteed Insurability Life rider
Current Assumption (aka Interest-Sensitive) Whole Life policy
4. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)
Annuity Classifications (5 of 5): # of lives
Annuity Classifications (1 of 5): How premium is paid
Medicaid/Medi-Cal
Exclusions to Work. Comp.
5. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.
Phases of an annuity
Insurability Type Conditional receipt
Small Employer Medical Expense plan
Common Life Exclusions
6. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.
Employee Retirement Income Security Act (ERISA)
Modified Endowment Contract (MEC)
Types of hazards
Viatical Settlement Provider (VSP)
7. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.
Underwriting risk categories
Tax implications of Disability policy
Phases of an annuity
Suicide clause/provision
8. WL policy covering 2 or more Insureds but ONLY payable upon death of LAST Insured - generally low premium but high death benefit.
Loss of Earnings Test
Cash value
Survivorship (aka "Last to die") policy
1035 Exchange
9. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.
Indeterminate Premium Whole Life policy
Elimination (aka Waiting) period
Estoppel
Proof of Loss provision
10. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.
Errors & Omissions (E&O)
Business Overhead Expense (BOE) Disability policy
Return of Premium rider
Annuity
11. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.
Payment of Premium provision
Family policy
Life insurance policy
Dividends
12. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.
Fraud
Life insurance policy
Requirements to sell variable life products
Employee Retirement Income Security Act (ERISA)
13. Policy owner must notify Insurer of loss either in writing - in person or by phone w/in 20 days.
Business Overhead Expense (BOE) Disability policy
Concealment exceptions
Notice of Claim provision
Dividend options
14. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.
Annuity Classifications (2 of 5): When benefits begin
Penalties for violating AIDS/HIV privacy laws
Exclusions for Major Medical plan
Credit Life policy
15. PURELY employer-funded account to reimburse employees for qualified medical expenses not covered by group health plan.
Cost of Living Adjustment (COLA) Life rider
Health Reimbursement Account (HRA)
Types of Insurers (by domicile)
Insurance contract characteristics (2 of 2)
16. Prepaid med. benefits for members ONLY w/ approved primary care M.D. (HMO employee); focus on preventative care; low co-pay.
Social Security Benefit (Supplement) rider
Variable Life policy (2 of 2)
Family Income policy
Health Maintenance Organization (HMO)
17. 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.
Occupational Disability policy
Dental Plan
Convertibility provision
Legal Action provision
18. Excludes coverage for specific injury/illness either temporarily or permanently in order to eliminate pre-existing condition.
Impairment (Exclusion) rider
Modified Endowment Contract (MEC)
Common Life Exclusions
Retrocession
19. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.
Term Life policy
Relation of Earnings to Insurance provision
1035 Exchange
Premium modes
20. 'The inability to perform ANY gainful occupation'.
Health Insurance Portability and Accountability Act (HIPAA)
7 Pay Test
Dividends
Total disability (any-occupational definition)
21. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.
Revocable vs. Irrevocable beneficiary
Social Security Benefit (Supplement) rider
Insurable interest
Occupational Disability policy
22. 'The inability to perform ANY reasonable occupation based on education - training or experience'.
Dividend options
Total disability (more restrictive definition)
Underwriting risk categories
Types of Insurers (by domicile)
23. 1: Req. - unless self-employed; 2: 7-day wait for disability benefits; 3: Premium based on ex-mod; 4: Rates approved by CDI; 5: to sell - must satisfy education reqs.
Insurable interest
Relation of Earnings to Insurance provision
Notice of Claim provision
CA Work. Comp. Statutes
24. Death benefit determined by Insured's financial goals & needs (minus assets).
Types of Insurers (by sector)
Health Reimbursement Account (HRA)
Needs approach (most common)
IRS Penalties for Annuities
25. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.
Return of Premium rider
Insuring clause/provision (aka Insuring Agreement)
Payment of Premium provision
Phases of an annuity
26. Allows Insured to increase death benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age.
Law of Large Numbers
Guaranteed Insurability Life rider
Transplant/Cosmetic Surgery rider
Adverse selection
27. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.
Factors that determine premium
Indeterminate Premium Whole Life policy
Permanent vs. Temporary disability
Types of Insurers (by sector)
28. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.
Types of Insurers (by ownership)
Workers' Compensation insurance
Loss of Earnings Test
Modified Premium Whole Life policy
29. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).
Joint Life (aka "First to die") policy
Annuity Classifications (1 of 5): How premium is paid
Insurable interest
Life insurance policy
30. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).
1035 Exchange
Indemnify
Doctrine of Comity
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
31. 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 & B "Gaps"
Long Term Care (LTC) policy
Variable Universal Life policy
Family Maintenance policy
32. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.
Primary Insurance Amount (PIA)
Medicare Part D
Payment of Premium provision
Medi-Cal Share Cost plan
33. Same as Term Life but provides living benefit (endowment) to policy owner if Insured survives entire term.
Binding receipt (aka Temporary Insurance Agreement)
Rate (as defined by CIC)
Endowment Life policy
Cost of Living Adjustment (COLA) Disability rider
34. Intentional OR unintentional failure to disclose material underwriting facts that should have been disclosed; grounds for policy rescission.
Concealment
Reinstatement provision
Elimination (aka Waiting) period
Graded Premium Whole Life policy
35. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.
Automatic Premium Loan (APL) provision
Key Employee Disability policy
Grace Period provision
Insurer (as defined by CIC)
36. Monthly; Quarterly; Semi-annually; Annually (cheapest due to less admin cost).
Key Employee Disability policy
Premium modes
Annuity Classifications (3 of 5): Source of income
Flexible Spending Account (FSA)
37. Federal law which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.
Age Discrimination in Employment Act (ADEA)
Binding receipt (aka Temporary Insurance Agreement)
Juvenile Life (aka Jumping Juvenile) policy
Mortality vs. Morbidity tables
38. Life license + NASD (FINRA) Series 6 or 7.
Requirements to sell variable life products
Single Pay Whole Life policy
Reinstatement provision
Risk management
39. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.
Family Maintenance policy
Insurance contract characteristics (1 of 2)
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Underwriting risk categories
40. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.
Term Life policy
Transplant/Cosmetic Surgery rider
Rescission
Annuity surrender charges
41. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.
Beneficiary provisions
Dread Disease policy
Types of Accident & Health (A&H) providers
Total disability (as commonly defined)
42. Permanent disability due to total loss of sight - hearing - speech or use of 2 + limbs; benefits paid even while continuing to work.
Presumptive disability
Tax implications of an Annuity (1 of 2)
Survivorship (aka "Last to die") policy
Annuity Classifications (1 of 5): How premium is paid
43. 1: Tax-free lump sum; 2: Monthly pay-outs for fixed time; 3: Fixed monthly payments until depleted.
Adverse selection
Claim Form (aka Proof of Loss Form) provision
Settlement options for Life policy (1 of 2)
Types of hazards
44. Same as WL but cash value increases @ current interest rates (not set); premium can start low or high & may change.
Occupational Disability policy
Exclusions for Major Medical plan
Current Assumption (aka Interest-Sensitive) Whole Life policy
Parole Pardon Rule
45. Tendency of poorer risks to seek insurance.
Adverse selection
Tax implications of an Estate
Family or Dependents rider
Needs approach (most common)
46. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.
Waiver of Premium (Waiver of Cost of Insurance) rider
Experience vs. Community rating in Group Health plan
Partial disability rider
Human Life Value approach
47. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.
Recurrent disability clause/provision
Loss exposure
7 Pay Test
Non-forfeiture options for WL policy
48. Receipt whereby coverage incepts immediately upon submission of full consideration - unless declined & premium refunded.
Binding receipt (aka Temporary Insurance Agreement)
Dividends
Age Discrimination in Employment Act (ADEA)
Tax implications of an Annuity (1 of 2)
49. Dividends are NOT taxable but interest is. Loan interest is NOT tax-deductible. Interest paid by Insurer on retained funds is taxable.
Tax implications of Dividends - Loans & Interest
Human Life Value approach
Reinstatement provision
Requirements to sell variable life products
50. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.
Insurance contract characteristics (2 of 2)
Viatical Settlement Provider (VSP)
Applicant Representations vs. Warranties
Annuity Classifications (3 of 5): Source of income