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. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.






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






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






4. 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






5. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.






6. Federally-sponsored health care for individuals 65+ &/or w/ certain disabilities; may run concurrent w/ group plan but group plan would act primary - THEN Medicare.






7. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.






8. 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.






9. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.






10. War; elective cosmetic surgery; routine dental; work. comp.-covered claims; self-inflicted (intentional); gov't. facility treatment; LTC; private nursing.






11. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.






12. Dividends are NOT taxable but interest is. Loan interest is NOT tax-deductible. Interest paid by Insurer on retained funds is taxable.






13. Provides % of monthly income benefit if Insured becomes disabled due to illness or accident.






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






15. Excludes coverage for suicide during 1st 2 yrs. ONLY but - if it does - all premiums must be returned to beneficiary.






16. Written policy terms supersede oral statements made prior to policy issue.






17. 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.






18. Provides coverage for specific disease(s) - such as cancer or leukemia.






19. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.






20. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.






21. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).






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






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






24. 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.






25. Identical to Incontestable Clause in Life policy.






26. 1: parties to contract; 2: insured party or life; 3: insurable interest - if 3rd party; 4: risks insured against; 5: policy period (term); 6: premium & mode.






27. Allows for Term policy renewal @ higher premium w/out medical exam; guarantees insurability; based on actual/attained age.






28. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.






29. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).






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






31. Process which prevents claim denial as a result of false statement or promise (made by Insurer) - which was relied upon by Insured.






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






33. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.






34. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.






35. A company providing lump sum buyout (50-90% of total) of Life policy; becomes owner & beneficiary & assumes premium payments; usually terminally ill viator.






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






37. Policy must be delivered w/ original (or copy of same) application attached.






38. War - 2 types; Suicide (1st 2 yrs.); Aviation (non-commercial); Hazardous hobbies; Criminal acts; Alcohol/Drug influenced.






39. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.






40. Same as Term Life but provides living benefit (endowment) to policy owner if Insured survives entire term.






41. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.






42. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.






43. Allows Insured to increase death benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age.






44. Death benefit determined by Insured's financial goals & needs (minus assets).






45. Intentional deception; grounds for rescission.






46. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.






47. Allows for use of HMO/PPO or other private carrier to provide expanded benefits @ additional premium & if enrolled in BOTH Parts A & B.






48. Unintentional - up to $1 -000 + legal $; Intentional - $1 -000-5 -000 + legal $; If harmful - misdemeanor + up to 1 yr. prison + up to $10 -000.






49. Coverage for catastrophic loss w/ high limits - front end deductible; co-insurance (80/20%); blanket coverage; stop loss max.






50. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).