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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. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).
Concealment exceptions
Elimination (aka Waiting) period
Single Pay Whole Life policy
Common Disability Exclusions
2. Insurance purchased by other Insurer(s) to spread or diversify risk; promotes industry stability.
Major Medical plan
Reinsurance
Transplant/Cosmetic Surgery rider
Concealment exceptions
3. 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.
Term Life policy
Notice of Claim provision
Grace Period provision
Health Insurance Portability and Accountability Act (HIPAA)
4. Potential circumstance that could cause a loss; measured in dollars.
Business Overhead Expense (BOE) Disability policy
Human Life Value approach
Loss exposure
Supplemental Major Medical plan
5. 'The inability to perform ANY gainful occupation'.
Medical Savings Account (MSA) & Health Savings Account (HSA)
Total disability (any-occupational definition)
Fraud
Types of Insurers (by ownership)
6. Two death benefit options - Option A: death benefit ONLY; Option B: death benefit + cash value; death benefit NOT guaranteed.
Beneficiary provisions
Elements to contract
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Law of Large Numbers
7. Excludes coverage for suicide during 1st 2 yrs. ONLY but - if it does - all premiums must be returned to beneficiary.
Policy loans
Total disability (more restrictive definition)
Suicide clause/provision
Legal Action provision
8. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.
Accidental Death & Dismemberment (AD&D) Disability rider
Credit Life policy
Risk management
Tax implications of an Annuity (1 of 2)
9. Intentional deception; grounds for rescission.
Change of Occupation provision
Trusts
Fraud
Health Maintenance Organization (HMO)
10. Intentional OR unintentional failure to disclose material underwriting facts that should have been disclosed; grounds for policy rescission.
Rehabilitation rider
Group Disability plan
Concealment
Tax implications of medical plans
11. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.
Law of Large Numbers
Types of Term Life policies
Market Value Adjusted (aka Modified Guaranteed) annuity
Point of Service plan
12. Permanent disability due to total loss of sight - hearing - speech or use of 2 + limbs; benefits paid even while continuing to work.
Approval Type Conditional receipt
Presumptive disability
Notice of Claim provision
Cost of Living Adjustment (COLA) Disability rider
13. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.
Accidental Death & Dismemberment (AD&D) Life policy
Dental Plan
Estoppel
Claim Form (aka Proof of Loss Form) provision
14. Same as Term Life but provides living benefit (endowment) to policy owner if Insured survives entire term.
Exclusions to Work. Comp.
Endowment Life policy
Concealment
Permanent vs. Temporary disability
15. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.
AIDS/HIV discrimination
Types of Agency Authority
COBRA Time Limitations
Enhanced Ordinary (aka Extraordinary) Whole Life policy
16. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.
Claim Form (aka Proof of Loss Form) provision
Palliative vs. Curative care
Modified Endowment Contract (MEC)
Medicare Part A & B "Gaps"
17. 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.
Insuring clause/provision (aka Insuring Agreement)
CA Work. Comp. Statutes
Proof of Loss provision
Change of Occupation provision
18. Req. by CA statute & may provide workers coverage for action-over claims.
Time Limit on Certain Defenses provision
Tax implications of medical plans
Rescission
Employer Liability
19. Provides supplemental coverage for physician/surgeon fees if enrolled (during enrollment period ONLY) & pay monthly premium w/ deductible and co-insurance.
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Credit Life policy
Peril vs. Hazard
Health Maintenance Organization (HMO)
20. PURELY employer-funded account to reimburse employees for qualified medical expenses not covered by group health plan.
Conformity with State Statute provision
Adverse selection
Health Reimbursement Account (HRA)
Grace Period provision
21. 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.
Valid life insurance contracts must identify...
Health Insurance Portability and Accountability Act (HIPAA)
Medicare Supplement or Medigap policy
Types of reinsurance
22. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Key Employee policy
Parole Pardon Rule
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Free Look provision
23. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.
Types of Accident & Health (A&H) providers
Trial Application (aka Request for Offer)
Variable Life policy (1 of 2)
Cross Purchase Plan
24. 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.
Dividend options
Types of Term Life policies
Business Continuation (aka Buy-Sell) policy
CA Work. Comp. Statutes
25. Unilateral - Insurer provides contract; Adhesion - parties must adhere to terms; Aleatory - benefits may not inure equally.
Dividends
Blue Cross/Blue Shield
Insurance contract characteristics (1 of 2)
Cross Purchase Plan
26. Private sector (Commercial) - provides LA&H - P&C - & LTC; Public sector (Gov't) - provides flood - work. comp. - Medicare/Medicaid - Group Life (SGLI/FEGLI).
Types of Medical Plans
Types of Insurers (by sector)
Types of hazards
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
27. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.
Accidental Death & Dismemberment (AD&D) Disability rider
Indemnify
Blue Cross/Blue Shield
Types of Renewability provisions
28. Combination of Basic Medical & Major Medical in one policy; Basic pays 1st - then Major Medical w/ corridor deductible.
Settlement options for Life policy (2 of 2)
Comprehensive Major Medical plan
Employee Retirement Income Security Act (ERISA)
Workers' Compensation insurance
29. Identical to Incontestable Clause in Life policy.
Types of Licensed Producers
Time Limit on Certain Defenses provision
Return of Cash Value rider
Medicare Part A (aka Hospital Insurance or HI)
30. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.
Applicant Representations vs. Warranties
Cost of Living Adjustment (COLA) Life rider
Cash value
Mortality vs. Morbidity tables
31. 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.
Return of Premium rider
Plans A-L of Medical Supplement or Medigap
Cross Purchase Plan
Dread Disease policy
32. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.
Retrocession
Cross Purchase Plan
Family policy
Adjustable Whole Life policy
33. 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.
Payment of Premium provision
Tax implications of medical plans
Accidental Death & Dismemberment (AD&D) Disability rider
Exclusions for Major Medical plan
34. Provides for continued operation of business if partner dies - by allowing surviving partner(s) to buy deceased partner's interest in business.
Dividend options
Types of Accident & Health (A&H) providers
Considerations in replacing Health insurance
Business Continuation (aka Buy-Sell) policy
35. Death benefit is NOT taxable. Cash value grows tax-deferred but cost basis (base premium) is not taxable - only interest is.
Tax implications of Death Benefit & Cash Value
Palliative vs. Curative care
Incontestability clause/provision
Permanent vs. Temporary disability
36. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.
Phases of an annuity
CHAMPUS (aka TriCare)
Reinstatement provision
Annuity Classifications (5 of 5): # of lives
37. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.
Types of Insurers (by sector)
Tax implications of Death Benefit & Cash Value
Elimination (aka Waiting) period
Endowment Life policy
38. Disability policy rider covering "the inability to perform some - but not all of your duties"; pays max. 50% of disability benefit for up to 6 mths.
Blackout Period
Survivorship (aka "Last to die") policy
Partial disability rider
Loss exposure
39. The state in which the contract is accepted or delivered is the state that possesses regulatory jurisdiction over Group plan.
Doctrine of Comity
7 Pay Test
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Variable Life policy (1 of 2)
40. Same as WL but w/ Level Term rider; upon death - pays monthly income for FULL term AFTER which pays full death benefit.
Family Maintenance policy
Key Employee Disability policy
Palliative vs. Curative care
Types of reinsurance
41. Written policy terms supersede oral statements made prior to policy issue.
Equity Index Whole Life policy
Parole Pardon Rule
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Non-forfeiture options for WL policy
42. A&H - A&S - Sickness only; Medical; Disability; Accident only; Travel accident; LTC; Medicare supplement; AD&D; Dental/Vision/Prescription; Limited.
Permanent vs. Temporary disability
Types of Accident & Health insurance
Viatical Settlement Provider (VSP)
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
43. An attempt to contain costs by employing various strategies - including wellness programs - preventative testing - outpatient & alternative procedures.
CHAMPUS (aka TriCare)
Departments of an Insurer
Payor (aka Waiver of Payor's Premium) rider
Medical cost containment (aka Managed care)
44. 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.
Long Term Care (LTC) policy
Adverse selection
Policy loans
Payor (aka Waiver of Payor's Premium) rider
45. Provides 24 hr. health coverage both "on" & "off" job - but may cause coverage duplication & coordination challenges.
Enhanced Ordinary (aka Extraordinary) Whole Life policy
24 Hour Coverage (CA)
Small Employer Medical Expense plan
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
46. Same as WL but w/ Decreasing Term rider; upon death - pays monthly income for REMAINING term AFTER which pays full death benefit.
Family Income policy
Doctrine of Comity
Family policy
Business Continuation (aka Buy-Sell) policy
47. Physical - slippery floor; Moral - dishonest acts; Morale - carelessness or recklessness.
Types of Accident & Health (A&H) providers
Social Security Benefit (Supplement) rider
Types of hazards
Disability Income policy
48. Federal program financed by payroll taxes provided equally by both employer & employee OR entirely by individual (if self-employed). Provides benefits for: Medicare @ age 65+; retirement; $255 lump sum death benefit; (limited) disability; survivors;
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Renewability provision
Peril vs. Hazard
AIDS/HIV discrimination
49. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Indeterminate Premium Whole Life policy
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Payment of Premium provision
50. Provides professional services - rehabilitation - training/re-training & related costs to assist Insured in returning to work.
Common Life Exclusions
Rehabilitation rider
Levels of Long Term Care provided
Exclusions for Major Medical plan