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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. No-charge annuity w/drawals allowed up to 10% of total - THEN penalized on sliding scale based on # policy yrs.; conditionally waived.
Risk management
Annuity surrender charges
Cross Purchase Plan
Relation of Earnings to Insurance provision
2. Dependent children are covered until 19 or 23 (full-time student only) or until self-sufficient (if handicapped).
Types of Insurers (by domicile)
Dependent coverage
Credit Life policy
Permanent vs. Temporary disability
3. 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.
Legal Action provision
Loss exposure
Transplant/Cosmetic Surgery rider
Risk management
4. 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.
Health Insurance Portability and Accountability Act (HIPAA)
Medicare Part C (aka Medicare Advantage)
Basic Medical plan
Residual disability rider
5. Covers disabilities occurring ONLY "off" job; benefits do not overlap work. comp. (i.e. Group plan).
Factors that determine premium
Non-Occupational Disability policy
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Proof of Loss provision
6. Policy must be delivered w/ original (or copy of same) application attached.
Entire Contract provision
Split Dollar Plan
Loss exposure
Legal Action provision
7. Written policy terms supersede oral statements made prior to policy issue.
Return of Premium rider
Small Employer Medical Expense plan
Cross Purchase Plan
Parole Pardon Rule
8. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.
Experience vs. Community rating in Group Health plan
Notice of Claim provision
CHAMPUS (aka TriCare)
Annuity Classifications (3 of 5): Source of income
9. Compensates business for loss due to disability of key employee; premiums not deductible but benefits tax-free.
Common Life Exclusions
Key Employee Disability policy
Total disability (more restrictive definition)
Time Limit on Certain Defenses provision
10. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.
Juvenile Life (aka Jumping Juvenile) policy
Free Look provision
Blue Cross/Blue Shield
Rate (as defined by CIC)
11. 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.
Misstatement of Age/Sex provision
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Tax implications of an Estate
Policy loans
12. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.
Common Disability Exclusions
Phases of an annuity
Partial disability rider
Types of Accident & Health (A&H) providers
13. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).
Common Disability Exclusions
Elimination (aka Waiting) period
Types of hazards
Approval Type Conditional receipt
14. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.
7 Pay Test
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Medical Savings Account (MSA) & Health Savings Account (HSA)
Levels of Long Term Care provided
15. Same as WL but w/ Level Term rider; upon death - pays monthly income for FULL term AFTER which pays full death benefit.
Annuity Classifications (1 of 5): How premium is paid
Concealment exceptions
Family Maintenance policy
Types of Accident & Health (A&H) providers
16. Death benefit determined by Insured's projected lost earnings potential.
Human Life Value approach
Experience vs. Community rating in Group Health plan
Key Employee policy
Claim Form (aka Proof of Loss Form) provision
17. Agreement - Offer & acceptance; Consideration - application + premium; Legal capacity - licensed &/or competent; Legal purpose - public good.
Retrocession
Elements to contract
Employee Retirement Income Security Act (ERISA)
7 Pay Test
18. Reappearance of disability w/in 6 mth. period after "recovery" from same disability is considered recurrence - not new disability.
Recurrent disability clause/provision
Comprehensive Major Medical plan
Current Assumption (aka Interest-Sensitive) Whole Life policy
Medicare Part A & B "Gaps"
19. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.
Levels of Long Term Care provided
Cash value
Annuity Classifications (5 of 5): # of lives
Joint Life (aka "First to die") policy
20. Process whereby a reinsurer reinsures w/ another reinsurer.
Needs approach (most common)
Workers' Compensation insurance
Retrocession
Business Continuation (aka Buy-Sell) policy
21. Price of insurance per exposure unit.
Factors that determine premium
Rate (as defined by CIC)
Convertibility provision
Long Term Care (LTC) policy
22. 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
Market Value Adjusted (aka Modified Guaranteed) annuity
Plans A-L of Medical Supplement or Medigap
Presumptive disability
23. Beneficiary has right to leave death benefits / Insurer to protect $ from creditors; interest (taxable) paid on retained funds.
Survivorship (aka "Last to die") policy
Loss of Earnings Test
Spendthrift provision
Exclusions to Work. Comp.
24. Provides disability income during surgery recovery from life-threatening condition (& sometimes cosmetic surgery).
Retrocession
Transplant/Cosmetic Surgery rider
Juvenile Life (aka Jumping Juvenile) policy
Underwriting risk categories
25. Unilateral - Insurer provides contract; Adhesion - parties must adhere to terms; Aleatory - benefits may not inure equally.
Human Life Value approach
Conformity with State Statute provision
Insurance contract characteristics (1 of 2)
Annuity Classifications (2 of 5): When benefits begin
26. Earned premium is $ paid for coverage to date. Unearned premium is $ paid & returnable due to coverage not provided.
Earned vs. Unearned premium
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Viatical Settlement Provider (VSP)
Split Dollar Plan
27. Policy provisions must conform to state regulations where policy is sold.
Conformity with State Statute provision
Medicaid/Medi-Cal
Penalties for violating AIDS/HIV privacy laws
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
28. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.
Accidental Death (aka Multiple Indemnity) rider
Indemnify
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Medi-Cal Share Cost plan
29. Group plan initially self-funded by employer (like SIR); after which - group plan Insurer covers (up to policy limit); requires TPA.
Considerations in replacing Health insurance
Trusts
Employer-Administered plan
Graded Premium Whole Life policy
30. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.
Supplemental Major Medical plan
Flexible Spending Account (FSA)
Medicare Part A & B "Gaps"
Free Look provision
31. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.
Employer-Administered plan
Annuity Classifications (1 of 5): How premium is paid
Renewability provision
Annuity Classifications (5 of 5): # of lives
32. Qualified Annuity - Tax-deductible contributions & tax-deferred growth but fully taxable w/drawals.
Tax implications of an Annuity (1 of 2)
Loss of Earnings Test
Employer-Administered plan
7 Pay Test
33. Same as Term Life but provides living benefit (endowment) to policy owner if Insured survives entire term.
Endowment Life policy
Errors & Omissions (E&O)
Types of Insurers (miscellaneous)
Family policy
34. Provides for continued operation of business if partner dies - by allowing surviving partner(s) to buy deceased partner's interest in business.
Policy delivery
Business Continuation (aka Buy-Sell) policy
Indeterminate Premium Whole Life policy
Types of Accident & Health insurance
35. 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
Blackout Period
Impairment (Exclusion) rider
Accidental Death (aka Multiple Indemnity) rider
36. Provides hospital insurance automatically @ age 65 (if FICA qualified) @ no fee but may have deductible & co-pay.
Medicare Part A (aka Hospital Insurance or HI)
Employee Retirement Income Security Act (ERISA)
Credit Life policy
Medicare Supplement or Medigap policy
37. WL policy covering 2 or more Insureds but ONLY payable upon death of LAST Insured - generally low premium but high death benefit.
Survivorship (aka "Last to die") policy
Departments of an Insurer
Parole Pardon Rule
Waiver of Premium provision
38. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.
Cross Purchase Plan
Total disability (as commonly defined)
Suicide clause/provision
Single Pay Whole Life policy
39. Same as WL but can be "paid-up" early by paying larger premium for shorter payment period (i.e. 10 Pay Life - 20 Pay Life).
Suicide clause/provision
Tax implications of an Annuity (1 of 2)
Limited Pay Whole Life policy
Total disability (more restrictive definition)
40. Upon death - death benefit is paid + the aggregate of premiums paid to date; add-on to Term policy ONLY.
Return of Premium rider
Employer Liability
Loss of Earnings Test
Business Continuation (aka Buy-Sell) Disability policy
41. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.
Types of Renewability provisions
Medicare Part C (aka Medicare Advantage)
Major Medical plan
Residual disability rider
42. Same as Universal Life but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Employee Retirement Income Security Act (ERISA)
Long Term Care (LTC) policy
Cost of Living Adjustment (COLA) Disability rider
Variable Universal Life policy
43. Provides medical & personal services for people needing extended assistance w/ Activities of Daily Living (ADL). Other benefits include: assisted living care; respite care; hospice care; adult day care.
Basic Medical plan
Long Term Care (LTC) policy
Health Insurance Portability and Accountability Act (HIPAA)
COBRA Time Limitations
44. Upon death - death benefit is paid + the aggregate of cash value accumulated to date; add-on to WL policy ONLY.
Return of Cash Value rider
Indeterminate Premium Whole Life policy
Types of Insurers (by ownership)
Cost of Living Adjustment (COLA) Disability rider
45. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.
Current Assumption (aka Interest-Sensitive) Whole Life policy
Notice of Claim provision
Accidental Death & Dismemberment (AD&D) Life policy
Modified Endowment Contract (MEC)
46. Same as WL but premium low for 1st 5 yrs. - THEN has annual premium increases for set # yrs. - THEN level premium.
Fraud
Split Dollar Plan
Graded Premium Whole Life policy
Parole Pardon Rule
47. 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.
Notice of Claim provision
Insurance contract characteristics (2 of 2)
Business Continuation (aka Buy-Sell) policy
Tax implications of Disability policy
48. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.
Life insurance policy
Group Disability plan
Term Life policy
Insurer (as defined by CIC)
49. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.
Types of Renewability provisions
Accidental Death & Dismemberment (AD&D) Disability rider
Trial Application (aka Request for Offer)
Business Continuation (aka Buy-Sell) Disability policy
50. Federal law allows employees/their dependents to continue group benefits w/in 60 days after termination (if employer has 20+ employees); Insured pays premium @ 102% of group cost.
COBRA Time Limitations
Medical Savings Account (MSA) & Health Savings Account (HSA)
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Underwriting risk categories