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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. 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.
Adverse selection
Applicant Representations vs. Warranties
COBRA Time Limitations
Health Maintenance Organization (HMO)
2. 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.
Grace Period provision
Tax implications of an Estate
Recurrent disability clause/provision
Tax implications of Disability policy
3. Provides % of monthly income benefit if Insured becomes disabled due to illness or accident.
Levels of Long Term Care provided
Plans A-L of Medical Supplement or Medigap
Disability Income policy
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
4. Life license + NASD (FINRA) Series 6 or 7.
Settlement options for Life policy (2 of 2)
Blackout Period
Waiver of Premium provision
Requirements to sell variable life products
5. If Insured & primary beneficiary die due to same act (w/in 14 days) - primary assumed 1st to die & contingent beneficiary paid death benefit.
Doctrine of Comity
Common Disaster (Simultaneous Death Act) clause/provision
Types of Insurers (by authorization)
Annuity Classifications (1 of 5): How premium is paid
6. A company providing lump sum buyout (50-90% of total) of Life policy; becomes owner & beneficiary & assumes premium payments; usually terminally ill viator.
Exclusions to Work. Comp.
Viatical Settlement Provider (VSP)
1035 Exchange
Civil Rights/Pregnancy Discrimination Act
7. Receipt whereby coverage incepts ONLY after underwriting approval.
Approval Type Conditional receipt
Retrocession
Annuity
Term Life policy
8. 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.
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Types of Term Life policies
Annuity Classifications (2 of 5): When benefits begin
Blackout Period
9. Type of partial disability rider - which pays fluctuating % of lost income w/out time limit.
Preferred Provider Organization (PPO)
Residual disability rider
Insuring clause/provision (aka Insuring Agreement)
Dividend options
10. 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)
Adjustable Whole Life policy
Time Limit on Certain Defenses provision
Notice of Claim provision
11. Funding mechanism whereby employer & employee share cost of premium. Upon death - benefit is shared between employer & beneficiary.
Split Dollar Plan
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Types of reinsurance
Reinstatement provision
12. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.
Relation of Earnings to Insurance provision
Tax implications of an Annuity (1 of 2)
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Experience vs. Community rating in Group Health plan
13. 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.
Disability Income policy
Supplemental Major Medical plan
Dividend options
Annuity Classifications (5 of 5): # of lives
14. 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
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Indemnify
Reinstatement provision
1035 Exchange
15. Federally-funded but state-run program for truly indigent individuals & families providing medical care at Federal clinic.
Misstatement of Age/Sex provision
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Small Employer Medical Expense plan
Medicaid/Medi-Cal
16. Death benefit determined by Insured's financial goals & needs (minus assets).
Revocable vs. Irrevocable beneficiary
Tax implications of an Annuity (1 of 2)
Term Life policy
Needs approach (most common)
17. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).
Requirements to sell variable life products
Doctrine of Comity
COBRA Time Limitations
Loss of Earnings Test
18. Coverage remains in effect for 31 days past premium due date; benefits paid during grace period would be deducted from sum.
Plans A-L of Medical Supplement or Medigap
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Equity Indexed annuity
Grace Period provision
19. A lapsed policy may be reinstated if not longer than 3-5 yrs. - & proof of insurability re-established - & back premiums + interest paid.
Types of Insurers (by sector)
Comprehensive Major Medical plan
Reinstatement provision
Relation of Earnings to Insurance provision
20. Earned premium is $ paid for coverage to date. Unearned premium is $ paid & returnable due to coverage not provided.
Payment of Premium provision
Partial disability rider
Earned vs. Unearned premium
Accidental Death (aka Multiple Indemnity) rider
21. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.
AIDS/HIV discrimination
IRS Penalties for Annuities
Types of Renewability provisions
Peril vs. Hazard
22. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.
Cross Purchase Plan
Approval Type Conditional receipt
Modified Premium Whole Life policy
Disability Income policy
23. Allows for use of HMO/PPO or other private carrier to provide expanded benefits @ additional premium & if enrolled in BOTH Parts A & B.
Medicare Part C (aka Medicare Advantage)
Non-Occupational Disability policy
Occupational Disability policy
Juvenile Life (aka Jumping Juvenile) policy
24. Covers entire family w/ WL for breadwinner & (convertible) Level Term for spouse & children (until certain age).
Rehabilitation rider
Adverse selection
Family policy
Variable Life policy (1 of 2)
25. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.
Doctrine of Comity
Cash value
Modified Endowment Contract (MEC)
Tax implications of an Estate
26. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.
Payment of Premium provision
COBRA Time Limitations
Incontestability clause/provision
Joint Life (aka "First to die") policy
27. Savings account for medical expenses; Tax-deductible contributions; tax-deferred growth; tax-free for qualified use; taxable for non-qualified use.
Health Maintenance Organization (HMO)
Medical Savings Account (MSA) & Health Savings Account (HSA)
Retrocession
Primary Insurance Amount (PIA)
28. Allows Insured to increase death benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age.
Employer Liability
Dividend options
Guaranteed Insurability Life rider
Waiver of Premium provision
29. Reappearance of disability w/in 6 mth. period after "recovery" from same disability is considered recurrence - not new disability.
Recurrent disability clause/provision
Rescission
Loss exposure
Variable Universal Life policy
30. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.
Annuity
Indeterminate Premium Whole Life policy
Human Life Value approach
Waiver of Premium (Waiver of Cost of Insurance) rider
31. Period of time following any children's survivor benefit & before benefits are provided to employee's widow/widower.
Blackout Period
Tax implications of an Annuity (1 of 2)
Employee Retirement Income Security Act (ERISA)
Types of Accident & Health (A&H) providers
32. An attempt to contain costs by employing various strategies - including wellness programs - preventative testing - outpatient & alternative procedures.
Medical cost containment (aka Managed care)
Point of Service plan
Tax implications of an Annuity (1 of 2)
Basic Medical plan
33. Beneficiary has right to leave death benefits / Insurer to protect $ from creditors; interest (taxable) paid on retained funds.
Cross Purchase Plan
Types of Insurers (by domicile)
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Spendthrift provision
34. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.
Long Term Care (LTC) policy
Annuity surrender charges
Valid life insurance contracts must identify...
Types of Agency Authority
35. Facultative - case by case agreements; Automatic/Treaty - automatic acceptance of risk percentage per previous agreement.
Entire Contract provision
Types of reinsurance
Indeterminate Premium Whole Life policy
Civil Rights/Pregnancy Discrimination Act
36. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.
Convertibility provision
Whole (aka Permanent or Straight) Life policy
Blackout Period
Non-forfeiture options for WL policy
37. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.
Concealment
Annuity Classifications (5 of 5): # of lives
Settlement options for Life policy (1 of 2)
Peril vs. Hazard
38. Grows @ fixed min. interest rate but w/ possible higher rate tied to equity index (i.e S&P Equity Index) appreciation; gains shared w/ Insurer.
Plans A-L of Medical Supplement or Medigap
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Medical Savings Account (MSA) & Health Savings Account (HSA)
Equity Indexed annuity
39. Same as WL but w/ Decreasing Term rider; upon death - pays monthly income for REMAINING term AFTER which pays full death benefit.
Departments of an Insurer
Family Income policy
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
COBRA Time Limitations
40. Mathematical law stating the larger # of occurrences - the more predictable the losses; used to calculate premiums.
Law of Large Numbers
Elimination (aka Waiting) period
Current Assumption (aka Interest-Sensitive) Whole Life policy
Peril vs. Hazard
41. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.
Single Pay Whole Life policy
Major Medical plan
Adverse selection
Flexible Spending Account (FSA)
42. Available for any reason up to full cash value @ fixed (max 8%) OR variable interest rate; loan $ + interest deducted from benefit @ death.
Waiver of Premium (Waiver of Cost of Insurance) rider
Policy loans
Elimination (aka Waiting) period
Departments of an Insurer
43. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.
Rescission
Equity Index Whole Life policy
Credit Life policy
Annuity surrender charges
44. 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.
Experience vs. Community rating in Group Health plan
Juvenile Life (aka Jumping Juvenile) policy
Market Value Adjusted (aka Modified Guaranteed) annuity
Payment of Premium provision
45. Receipt whereby coverage incepts conditionally upon submission of full consideration and that all underwriting reqs. are met.
Insurability Type Conditional receipt
Employer Liability
Employee Retirement Income Security Act (ERISA)
Occupational Disability policy
46. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.
Policy delivery
Misstatement of Age/Sex provision
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Parole Pardon Rule
47. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.
Family or Dependents rider
Accidental Death & Dismemberment (AD&D) Life policy
Beneficiary provisions
Rescission
48. 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.
Partial disability rider
Health Reimbursement Account (HRA)
Return of Cash Value rider
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
49. Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling - stock investment).
Pure risk vs. Speculative risk
Rehabilitation rider
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Cost of Living Adjustment (COLA) Life rider
50. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.
IRS Penalties for Annuities
Survivorship (aka "Last to die") policy
7 Pay Test
Proof of Loss provision