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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. Same as Comprehensive Major Medical but w/ integrated deductible; much more expensive.
Supplemental Major Medical plan
Variable Life policy (2 of 2)
Claim Form (aka Proof of Loss Form) provision
Loss exposure
2. Same as WL but premium low for 1st 5 yrs. - THEN has annual premium increases for set # yrs. - THEN level premium.
Graded Premium Whole Life policy
Medicaid/Medi-Cal
Phases of an annuity
Types of Term Life policies
3. Policy owner must notify Insurer of loss either in writing - in person or by phone w/in 20 days.
Claim Form (aka Proof of Loss Form) provision
Variable Life policy (2 of 2)
Notice of Claim provision
Parole Pardon Rule
4. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.
Total disability (more restrictive definition)
Recurrent disability clause/provision
Doctrine of Comity
Types of Insurers (by ownership)
5. 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.
Retrocession
Total disability (any-occupational definition)
Types of Term Life policies
Indemnify
6. Federal law allows employees/their dependents to continue group benefits w/in 60 days after termination (if employer has 20+ employees); Insured pays premium @ 102% of group cost.
Small Employer Medical Expense plan
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Point of Service plan
Types of reinsurance
7. Waives premium upon disability of Insured until return to work; disability must persist for 90 days or longer; 1st 90 day premiums refunded after 90 days.
Waiver of Premium provision
Common Disability Exclusions
Workers' Compensation insurance
Insuring clause/provision (aka Insuring Agreement)
8. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.
Trial Application (aka Request for Offer)
Accidental Death & Dismemberment (AD&D) Disability rider
Cost of Living Adjustment (COLA) Disability rider
Types of Renewability provisions
9. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.
Dread Disease policy
Payor (aka Waiver of Payor's Premium) rider
Experience vs. Community rating in Group Health plan
Impairment (Exclusion) rider
10. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.
Proof of Loss provision
Errors & Omissions (E&O)
Renewability provision
Medicare Part D
11. Same as WL but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Penalties for violating AIDS/HIV privacy laws
Partial disability rider
Variable Life policy (1 of 2)
Modified Premium Whole Life policy
12. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.
Cost of Living Adjustment (COLA) Life rider
Annuity surrender charges
Insuring clause/provision (aka Insuring Agreement)
Types of Licensed Producers
13. Premiums determined by target cash values or death benefit; partial cash value w/drawals allowed; transparent policy w/ unbundled premium.
Non-Occupational Disability policy
Market Value Adjusted (aka Modified Guaranteed) annuity
Return of Premium rider
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
14. Earned premium is $ paid for coverage to date. Unearned premium is $ paid & returnable due to coverage not provided.
Earned vs. Unearned premium
Insurer (as defined by CIC)
Occupational Disability policy
Basic Medical plan
15. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.
Beneficiary provisions
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Payment of Premium provision
Whole (aka Permanent or Straight) Life policy
16. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.
Annuity Classifications (5 of 5): # of lives
Preferred Provider Organization (PPO)
Non-forfeiture options for WL policy
24 Hour Coverage (CA)
17. Mathematical law stating the larger # of occurrences - the more predictable the losses; used to calculate premiums.
Elements to contract
Law of Large Numbers
Types of reinsurance
Common Disaster (Simultaneous Death Act) clause/provision
18. Provides professional services - rehabilitation - training/re-training & related costs to assist Insured in returning to work.
Life insurance policy
Insurable interest
Rehabilitation rider
Doctrine of Comity
19. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.
Types of Renewability provisions
1035 Exchange
Conformity with State Statute provision
Relation of Earnings to Insurance provision
20. Same as Term Life but provides living benefit (endowment) to policy owner if Insured survives entire term.
Blue Cross/Blue Shield
Types of hazards
Annuity surrender charges
Endowment Life policy
21. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Common Accident provision
Proof of Loss provision
Accidental Death & Dismemberment (AD&D) Disability rider
Claim Form (aka Proof of Loss Form) provision
22. 'The inability to perform ANY reasonable occupation based on education - training or experience'.
Supplemental Major Medical plan
Non-forfeiture options for WL policy
Total disability (more restrictive definition)
Accidental Death (aka Multiple Indemnity) rider
23. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.
Beneficiary provisions
Palliative vs. Curative care
Human Life Value approach
Policy loans
24. 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.
Applicant Representations vs. Warranties
Medicare
Errors & Omissions (E&O)
Medi-Cal Share Cost plan
25. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.
Family policy
Small Employer Medical Expense plan
IRS Penalties for Annuities
Common Accident provision
26. Group plan initially self-funded by employer (like SIR); after which - group plan Insurer covers (up to policy limit); requires TPA.
Employer-Administered plan
Accidental Death (aka Multiple Indemnity) rider
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Indemnify
27. 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.
Annuity Classifications (1 of 5): How premium is paid
Employer Liability
Medical cost containment (aka Managed care)
Long Term Care (LTC) policy
28. Intentional OR unintentional failure to disclose material underwriting facts that should have been disclosed; grounds for policy rescission.
Concealment
Rescission
Considerations in replacing Health insurance
Insurability Type Conditional receipt
29. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.
Human Life Value approach
Employer Liability
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Insurer (as defined by CIC)
30. No coverage for injuries while: 1: @ voluntary social event; 2: self-inflicted (intentional); 3: under alcohol/drug influence; 4: committing criminal act; 5: aggressor in workplace fight; 6: participating in athletic event (non-pro. athletes) 7: par
AIDS/HIV discrimination
Small Employer Medical Expense plan
Major Medical plan
Exclusions to Work. Comp.
31. Compensates business for loss due to disability of key employee; premiums not deductible but benefits tax-free.
Key Employee Disability policy
Term Life policy
Human Life Value approach
Rate (as defined by CIC)
32. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Flexible Spending Account (FSA)
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
7 Pay Test
33. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.
Premium modes
Revocable vs. Irrevocable beneficiary
Endowment Life policy
Return of Premium rider
34. Provides 24 hr. health coverage both "on" & "off" job - but may cause coverage duplication & coordination challenges.
Joint Life (aka "First to die") policy
Equity Index Whole Life policy
24 Hour Coverage (CA)
Human Life Value approach
35. Coverage for catastrophic loss w/ high limits - front end deductible; co-insurance (80/20%); blanket coverage; stop loss max.
Business Continuation (aka Buy-Sell) Disability policy
Trusts
Basic Medical plan
Major Medical plan
36. Coverage remains in effect for 31 days past premium due date; benefits paid during grace period would be deducted from sum.
Payment of Premium provision
Grace Period provision
Conformity with State Statute provision
Small Employer Medical Expense plan
37. Benefits automatically increase annually based on inflationary index (i.e. Consumer Price Index) OR flat rate (5% max.).
Key Employee Disability policy
Total disability (as commonly defined)
Waiver of Premium (Waiver of Cost of Insurance) rider
Cost of Living Adjustment (COLA) Disability rider
38. Provides disability income during surgery recovery from life-threatening condition (& sometimes cosmetic surgery).
Transplant/Cosmetic Surgery rider
COBRA Time Limitations
Point of Service plan
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
39. Excludes coverage for specific injury/illness either temporarily or permanently in order to eliminate pre-existing condition.
Impairment (Exclusion) rider
Settlement options for Life policy (2 of 2)
Total disability (as commonly defined)
Types of Renewability provisions
40. An attempt to contain costs by employing various strategies - including wellness programs - preventative testing - outpatient & alternative procedures.
Medical cost containment (aka Managed care)
Valid life insurance contracts must identify...
Graded Premium Whole Life policy
CHAMPUS (aka TriCare)
41. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.
Impairment (Exclusion) rider
Peril vs. Hazard
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Point of Service plan
42. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.
Incontestability clause/provision
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Blackout Period
Tax implications of medical plans
43. Responsible adult trustee designated to manage death benefits for minor child beneficiary until adulthood.
Rate (as defined by CIC)
Trusts
Penalties for violating AIDS/HIV privacy laws
Medicaid/Medi-Cal
44. 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.
Tax implications of medical plans
Phases of an annuity
Types of Agency Authority
Term Life policy
45. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.
Palliative vs. Curative care
Insurer (as defined by CIC)
Juvenile Life (aka Jumping Juvenile) policy
Types of hazards
46. Insurance purchased by other Insurer(s) to spread or diversify risk; promotes industry stability.
Reinsurance
Tax implications of an Annuity (1 of 2)
Fraud
Annuity Classifications (1 of 5): How premium is paid
47. Fixed premium w/ guaranteed min. death benefit that may increase due to higher than expected investment returns.
Variable Life policy (2 of 2)
Annuity Classifications (5 of 5): # of lives
Single Pay Whole Life policy
Dental Plan
48. Agreement - Offer & acceptance; Consideration - application + premium; Legal capacity - licensed &/or competent; Legal purpose - public good.
Total disability (more restrictive definition)
Flexible Spending Account (FSA)
Grace Period provision
Elements to contract
49. Receipt whereby coverage incepts immediately upon submission of full consideration - unless declined & premium refunded.
Policy loans
Single Pay Whole Life policy
Binding receipt (aka Temporary Insurance Agreement)
Common Accident provision
50. Mortality is the statistical possibility of death @ each age. Morbidity is the statistical possibility & extent of disability @ each age.
Mortality vs. Morbidity tables
Permanent vs. Temporary disability
Pure risk vs. Speculative risk
Underwriting risk categories