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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. Non-qualified Annuity - Non-deductible contributions & tax-deferred growth. At pay-out - tax-free principal but taxable growth.
Return of Premium rider
Revocable vs. Irrevocable beneficiary
Flexible Spending Account (FSA)
Tax implications of an Annuity (1 of 2)
2. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.
Adverse selection
Common Accident provision
Dividends
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
3. Receipt whereby coverage incepts ONLY after underwriting approval.
Blue Cross/Blue Shield
Approval Type Conditional receipt
Impairment (Exclusion) rider
Policy loans
4. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.
Misstatement of Age/Sex provision
Return of Cash Value rider
Palliative vs. Curative care
Requirements to sell variable life products
5. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.
Types of Insurers (by authorization)
Credit Life policy
Whole (aka Permanent or Straight) Life policy
Rescission
6. Process whereby a reinsurer reinsures w/ another reinsurer.
Retrocession
Market Value Adjusted (aka Modified Guaranteed) annuity
Cost of Living Adjustment (COLA) Disability rider
Types of reinsurance
7. Same as WL but premium low for 1st 5 yrs. - THEN has annual premium increases for set # yrs. - THEN level premium.
Transplant/Cosmetic Surgery rider
Graded Premium Whole Life policy
Health Reimbursement Account (HRA)
Automatic Premium Loan (APL) provision
8. Same as WL but w/ Decreasing Term rider; upon death - pays monthly income for REMAINING term AFTER which pays full death benefit.
AIDS/HIV discrimination
Family Income policy
Trusts
Medicare Supplement or Medigap policy
9. A&H - A&S - Sickness only; Medical; Disability; Accident only; Travel accident; LTC; Medicare supplement; AD&D; Dental/Vision/Prescription; Limited.
24 Hour Coverage (CA)
Residual disability rider
7 Pay Test
Types of Accident & Health insurance
10. Federal law which prohibits companies w/ 15+ employees from decreasing coverage benefits for women affected by pregnancy or childbirth.
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Civil Rights/Pregnancy Discrimination Act
Common Disability Exclusions
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
Tax implications of an Estate
24 Hour Coverage (CA)
12. Savings account for medical expenses; Tax-deductible contributions; tax-deferred growth; tax-free for qualified use; taxable for non-qualified use.
Split Dollar Plan
Reinsurance
Medical Savings Account (MSA) & Health Savings Account (HSA)
Rescission
13. Provides disability income during surgery recovery from life-threatening condition (& sometimes cosmetic surgery).
Transplant/Cosmetic Surgery rider
Medicare Part A & B "Gaps"
Loss of Earnings Test
Annuity Classifications (1 of 5): How premium is paid
14. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.
Non-forfeiture options for WL policy
Claim Form (aka Proof of Loss Form) provision
Beneficiary provisions
7 Pay Test
15. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.
Accidental Death & Dismemberment (AD&D) Disability rider
Levels of Long Term Care provided
Variable Life policy (1 of 2)
Automatic Premium Loan (APL) provision
16. If Insured & primary beneficiary die due to same act (w/in 14 days) - primary assumed 1st to die & contingent beneficiary paid death benefit.
Valid life insurance contracts must identify...
Cash value
Payor (aka Waiver of Payor's Premium) rider
Common Disaster (Simultaneous Death Act) clause/provision
17. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Insurer (as defined by CIC)
Annuity Classifications (1 of 5): How premium is paid
Tax implications of an Annuity (1 of 2)
18. 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.
Medical cost containment (aka Managed care)
Tax implications of Disability policy
Fraud
Medicare Part C (aka Medicare Advantage)
19. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.
Concealment
Underwriting risk categories
Approval Type Conditional receipt
Credit Life policy
20. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.
Dividends
Dental Plan
Concealment exceptions
Valid life insurance contracts must identify...
21. Provides benefit during Social Security "black-out" period - up to 1 yr.
Policy delivery
Social Security Benefit (Supplement) rider
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Health Maintenance Organization (HMO)
22. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.
Whole (aka Permanent or Straight) Life policy
Accidental Death (aka Multiple Indemnity) rider
Time Limit on Certain Defenses provision
Comprehensive Major Medical plan
23. Provides hospital insurance automatically @ age 65 (if FICA qualified) @ no fee but may have deductible & co-pay.
Point of Service plan
Claim Form (aka Proof of Loss Form) provision
Settlement options for Life policy (2 of 2)
Medicare Part A (aka Hospital Insurance or HI)
24. Temp. coverage for set duration w/ death benefit ONLY (no cash value) - offers largest $ for lowest premium; renewable; convertible.
Parole Pardon Rule
Term Life policy
Return of Premium rider
Civil Rights/Pregnancy Discrimination Act
25. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).
Renewability provision
Recurrent disability clause/provision
Loss of Earnings Test
Concealment exceptions
26. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).
Family Income policy
Parole Pardon Rule
Insurable interest
Grace Period provision
27. Conditional - coverage is conditional; Personal - parties are people; Good faith - honesty/integrity; Fiduciary - req's financial trust.
Insurance contract characteristics (2 of 2)
Return of Cash Value rider
Types of reinsurance
Common Disability Exclusions
28. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.
Common Accident provision
Plans A-L of Medical Supplement or Medigap
Types of Renewability provisions
Medical cost containment (aka Managed care)
29. 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.
Types of Insurers (by sector)
CA Work. Comp. Statutes
Policy loans
Rescission
30. An attempt to contain costs by employing various strategies - including wellness programs - preventative testing - outpatient & alternative procedures.
Policy loans
Medical cost containment (aka Managed care)
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Annuity surrender charges
31. Allows Insured to increase death benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age.
Flexible Spending Account (FSA)
Conformity with State Statute provision
Guaranteed Insurability Life rider
Parole Pardon Rule
32. Excludes coverage for specific injury/illness either temporarily or permanently in order to eliminate pre-existing condition.
Settlement options for Life policy (2 of 2)
Fraud
Impairment (Exclusion) rider
Health Insurance Portability and Accountability Act (HIPAA)
33. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.
Cost of Living Adjustment (COLA) Disability rider
Annuity surrender charges
Modified Premium Whole Life policy
Family Maintenance policy
34. Compensates business for loss due to disability of key employee; premiums not deductible but benefits tax-free.
Departments of an Insurer
Key Employee Disability policy
Valid life insurance contracts must identify...
Juvenile Life (aka Jumping Juvenile) policy
35. Dependent children are covered until 19 or 23 (full-time student only) or until self-sufficient (if handicapped).
Dependent coverage
Palliative vs. Curative care
Medicare
Health Insurance Portability and Accountability Act (HIPAA)
36. Covers disabilities occurring ONLY "off" job; benefits do not overlap work. comp. (i.e. Group plan).
Blue Cross/Blue Shield
Non-Occupational Disability policy
Types of Renewability provisions
Business Continuation (aka Buy-Sell) policy
37. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.
Variable Life policy (1 of 2)
Basic Medical plan
Conformity with State Statute provision
Departments of an Insurer
38. 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.
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Comprehensive Major Medical plan
Permanent vs. Temporary disability
Guaranteed Insurability Life rider
39. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.
Factors that determine premium
Variable Life policy (1 of 2)
Incontestability clause/provision
Palliative vs. Curative care
40. 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
Binding receipt (aka Temporary Insurance Agreement)
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Return of Premium rider
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
41. An unintentional mistake committed by an insurance representative; may be covered by E&O insurance.
Errors & Omissions (E&O)
Annuity
Payment of Premium provision
Free Look provision
42. War - 2 types; Suicide (1st 2 yrs.); Aviation (non-commercial); Hazardous hobbies; Criminal acts; Alcohol/Drug influenced.
Common Life Exclusions
Employer Liability
Equity Index Whole Life policy
Partial disability rider
43. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.
Dividend options
Total disability (as commonly defined)
1035 Exchange
Equity Index Whole Life policy
44. Policy must be delivered w/ original (or copy of same) application attached.
24 Hour Coverage (CA)
Binding receipt (aka Temporary Insurance Agreement)
Modified Premium Whole Life policy
Entire Contract provision
45. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.
Business Continuation (aka Buy-Sell) Disability policy
Social Security Benefit (Supplement) rider
Total disability (more restrictive definition)
Plans A-L of Medical Supplement or Medigap
46. Federal law which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.
Age Discrimination in Employment Act (ADEA)
Beneficiary provisions
CA Work. Comp. Statutes
Major Medical plan
47. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.
Health Reimbursement Account (HRA)
Annuity
Limited Pay Whole Life policy
Impairment (Exclusion) rider
48. Intentional deception; grounds for rescission.
Fraud
Rate (as defined by CIC)
Group Disability plan
Exclusions to Work. Comp.
49. 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.
Types of Insurers (by ownership)
Annuity Classifications (3 of 5): Source of income
Common Life Exclusions
Market Value Adjusted (aka Modified Guaranteed) annuity
50. Federally-funded but state-run program for truly indigent individuals & families providing medical care at Federal clinic.
Plans A-L of Medical Supplement or Medigap
AIDS/HIV discrimination
Medicaid/Medi-Cal
Rate (as defined by CIC)