Test your basic knowledge |

CA Life Agent Exam

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. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.






2. Agents - represent Insurer; Brokers - represent themselves & Insured; Solicitors - represent one agent to solicit leads.






3. Excludes coverage for specific injury/illness either temporarily or permanently in order to eliminate pre-existing condition.






4. Price of insurance per exposure unit.






5. Domestic - within home state; Foreign - outside home state; Alien - outside home country.






6. Earned premium is $ paid for coverage to date. Unearned premium is $ paid & returnable due to coverage not provided.






7. Potential circumstance that could cause a loss; measured in dollars.






8. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.






9. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.






10. Process whereby a reinsurer reinsures w/ another reinsurer.






11. Reappearance of disability w/in 6 mth. period after "recovery" from same disability is considered recurrence - not new disability.






12. Mandatory 100% employer-funded coverage for injuries/illnesses occurring "on" job; full-time employees only; exclusive remedy. Provides: 1: unlimited medical benefit; 2: survivor income replacement & funeral ($5 -000 max.); 3: disability benefit @ 66

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13. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.






14. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.






15. If Insured changes to: more hazardous job - benefits reduced; less hazardous job - premiums reduce.






16. Facultative - case by case agreements; Automatic/Treaty - automatic acceptance of risk percentage per previous agreement.






17. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.






18. Fixed premium w/ guaranteed min. death benefit that may increase due to higher than expected investment returns.






19. Covers disabilities occurring both "on" AND "off" job; "on" job benefits paid in addition to work. comp. - if applicable (i.e. individual plan).






20. 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.






21. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.






22. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.






23. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.






24. Two death benefit options - Option A: death benefit ONLY; Option B: death benefit + cash value; death benefit NOT guaranteed.






25. Level - fixed death benefit - premium fixed until renewal; Decreasing - death benefit decreases over term - premium fixed until renewal; Increasing - death benefit increases over term - premium fixed until renewal.






26. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.






27. Premiums determined by target cash values or death benefit; partial cash value w/drawals allowed; transparent policy w/ unbundled premium.






28. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.






29. Death benefit is NOT taxable. Cash value grows tax-deferred but cost basis (base premium) is not taxable - only interest is.






30. Agreement - Offer & acceptance; Consideration - application + premium; Legal capacity - licensed &/or competent; Legal purpose - public good.






31. Part A - Inpatient hospital deductibles vary on # of days; limited reserve days; finite benefit; 1st 3 pints blood; Part B - 20% co-payment.






32. Basic Medical; Major Medical; Comprehensive Major Medical






33. Provides 24 hr. health coverage both "on" & "off" job - but may cause coverage duplication & coordination challenges.






34. Compensates business for loss due to disability of key employee; premiums not deductible but benefits tax-free.






35. Physical - slippery floor; Moral - dishonest acts; Morale - carelessness or recklessness.






36. 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.






37. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.






38. Intentional OR unintentional failure to disclose material underwriting facts that should have been disclosed; grounds for policy rescission.






39. WL policy covering 2 or more Insureds but ONLY payable upon death of LAST Insured - generally low premium but high death benefit.






40. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.






41. An unintentional mistake committed by an insurance representative; may be covered by E&O insurance.






42. Permanent disability due to total loss of sight - hearing - speech or use of 2 + limbs; benefits paid even while continuing to work.






43. Federally-funded but state-run program for truly indigent individuals & families providing medical care at Federal clinic.






44. Pre-existing illness/injury; Waiting period; Elimination period; Probationary period; Benefits - Exclusions - Limitations; Underwriting reqs.






45. Available for any reason up to full cash value @ fixed (max 8%) OR variable interest rate; loan $ + interest deducted from benefit @ death.






46. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.






47. Same as WL but w/ Level Term rider; upon death - pays monthly income for FULL term AFTER which pays full death benefit.






48. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.






49. Receipt whereby coverage incepts conditionally upon submission of full consideration and that all underwriting reqs. are met.






50. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.