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. 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.






2. Provides professional services - rehabilitation - training/re-training & related costs to assist Insured in returning to work.






3. 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.






4. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.






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






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






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






8. Same as WL but w/ adjustable death benefit (& corresponding premium) & over-fund option but w/ annually renewable term (ART).






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






10. 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.






11. Peril is the CAUSE of loss. Hazard is a condition that increases LIKELIHOOD of loss.






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






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






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






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






16. Intentional deception; grounds for rescission.






17. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.






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






19. Upon death - death benefit is paid + the aggregate of cash value accumulated to date; add-on to WL policy ONLY.






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






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






22. 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.






23. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.






24. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.






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






26. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.






27. Mathematical law stating the larger # of occurrences - the more predictable the losses; used to calculate premiums.






28. 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.






29. Policy provisions must conform to state regulations where policy is sold.






30. No deductible coverage for: daily room/board; ancillary costs; surgeon &/or physician expense (for added premium).






31. Monthly; Quarterly; Semi-annually; Annually (cheapest due to less admin cost).






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






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






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






35. Savings account for medical expenses; Tax-deductible contributions; tax-deferred growth; tax-free for qualified use; taxable for non-qualified use.






36. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.






37. Upon death - death benefit is paid + the aggregate of premiums paid to date; add-on to Term policy ONLY.






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






39. Govt. organization providing health care benefits for dependents of military personnel.






40. Same as Universal Life but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.






41. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.






42. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.






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






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






45. Federal law which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.






46. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.






47. Funding mechanism whereby employer & employee share cost of premium. Upon death - benefit is shared between employer & beneficiary.






48. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.






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






50. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.