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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 WL but can be "paid-up" early by paying larger premium for shorter payment period (i.e. 10 Pay Life - 20 Pay Life).
AIDS/HIV discrimination
Doctrine of Comity
Annuity Classifications (1 of 5): How premium is paid
Limited Pay Whole Life policy
2. Savings account for medical expenses; Tax-deductible contributions; tax-deferred growth; tax-free for qualified use; taxable for non-qualified use.
Medical Savings Account (MSA) & Health Savings Account (HSA)
Occupational Disability policy
Policy delivery
Family Maintenance policy
3. 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
Earned vs. Unearned premium
Non-forfeiture options for WL policy
Medicare Supplement or Medigap policy
Exclusions to Work. Comp.
4. 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.
7 Pay Test
Settlement options for Life policy (1 of 2)
COBRA Time Limitations
Dividend options
5. Must be delivered in person or by certified - registered or 1st-class mail w/ signature - unless waived by Insurance Commissioner.
Mortality vs. Morbidity tables
Pure risk vs. Speculative risk
Policy delivery
Free Look provision
6. If Insured changes to: more hazardous job - benefits reduced; less hazardous job - premiums reduce.
Premium modes
Recurrent disability clause/provision
Long Term Care (LTC) policy
Change of Occupation provision
7. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.
Annuity Classifications (3 of 5): Source of income
Palliative vs. Curative care
Variable Universal Life policy
Permanent vs. Temporary disability
8. 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.
Common Accident provision
Tax implications of an Annuity (1 of 2)
Requirements to sell variable life products
Partial disability rider
9. Permanent - not recoverable (spinal cord injury); Temporary - recoverable (temp. illness/injury - broken limb).
Exclusions for Major Medical plan
Medicare
Tax implications of Dividends - Loans & Interest
Permanent vs. Temporary disability
10. Receipt whereby coverage incepts ONLY after underwriting approval.
Equity Index Whole Life policy
Trusts
Approval Type Conditional receipt
Waiver of Premium provision
11. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.
Exclusions to Work. Comp.
Medicaid/Medi-Cal
Graded Premium Whole Life policy
Cash value
12. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.
Health Maintenance Organization (HMO)
Claim Form (aka Proof of Loss Form) provision
Joint Life (aka "First to die") policy
Misstatement of Age/Sex provision
13. Waives premium upon disability of Insured until return to work; disability must persist for 6 mths. or longer. Cash value & dividends not affected.
Primary Insurance Amount (PIA)
Incontestability clause/provision
Waiver of Premium (Waiver of Cost of Insurance) rider
Fraud
14. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.
Loss of Earnings Test
Health Reimbursement Account (HRA)
Family or Dependents rider
Misstatement of Age/Sex provision
15. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.
Business Overhead Expense (BOE) Disability policy
Common Disaster (Simultaneous Death Act) clause/provision
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Annuity Classifications (2 of 5): When benefits begin
16. Provides disability income during surgery recovery from life-threatening condition (& sometimes cosmetic surgery).
Reinstatement provision
Transplant/Cosmetic Surgery rider
Presumptive disability
Tax implications of Disability policy
17. Federal law to protect Federal employees' (& their beneficiaries') pension - group insurance - & welfare benefits.
Employee Retirement Income Security Act (ERISA)
Exclusions for Major Medical plan
Palliative vs. Curative care
Non-forfeiture options for WL policy
18. Identical to Incontestable Clause in Life policy.
Estoppel
Time Limit on Certain Defenses provision
Plans A-L of Medical Supplement or Medigap
Medical Savings Account (MSA) & Health Savings Account (HSA)
19. 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
Non-Occupational Disability policy
Types of Insurers (by ownership)
Pure risk vs. Speculative risk
20. Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling - stock investment).
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Fraud
Viatical Settlement Provider (VSP)
Pure risk vs. Speculative risk
21. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)
Types of Agency Authority
Annuity Classifications (1 of 5): How premium is paid
Medi-Cal Share Cost plan
Change of Occupation provision
22. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.
Misstatement of Age/Sex provision
IRS Penalties for Annuities
Total disability (as commonly defined)
Types of Insurers (by authorization)
23. 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;
Levels of Long Term Care provided
Tax implications of an Annuity (1 of 2)
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Claim Form (aka Proof of Loss Form) provision
24. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).
Suicide clause/provision
Loss of Earnings Test
Tax implications of medical plans
Factors that determine premium
25. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.
Cost of Living Adjustment (COLA) Life rider
Single Pay Whole Life policy
CHAMPUS (aka TriCare)
Small Employer Medical Expense plan
26. Federally-funded but state-run program for truly indigent individuals & families providing medical care at Federal clinic.
Dental Plan
Medicaid/Medi-Cal
Annuity
Incontestability clause/provision
27. Federal law which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.
COBRA Time Limitations
Occupational Disability policy
Age Discrimination in Employment Act (ADEA)
Notice of Claim provision
28. Pre-existing illness/injury; Waiting period; Elimination period; Probationary period; Benefits - Exclusions - Limitations; Underwriting reqs.
Adverse selection
Types of Term Life policies
Considerations in replacing Health insurance
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
29. Basic Medical; Major Medical; Comprehensive Major Medical
Adverse selection
Legal Action provision
Long Term Care (LTC) policy
Types of Medical Plans
30. 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.
Occupational Disability policy
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Loss of Earnings Test
Types of Agency Authority
31. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.
Policy delivery
Types of Renewability provisions
Endowment Life policy
Blackout Period
32. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.
Employer-Administered plan
Concealment
Annuity Classifications (3 of 5): Source of income
Juvenile Life (aka Jumping Juvenile) policy
33. Temp. coverage for set duration w/ death benefit ONLY (no cash value) - offers largest $ for lowest premium; renewable; convertible.
Term Life policy
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Incontestability clause/provision
Human Life Value approach
34. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.
Credit Life policy
Phases of an annuity
Trial Application (aka Request for Offer)
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
35. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.
Revocable vs. Irrevocable beneficiary
Notice of Claim provision
Business Continuation (aka Buy-Sell) Disability policy
Variable Universal Life policy
36. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.
Beneficiary provisions
Business Overhead Expense (BOE) Disability policy
Cash value
Adjustable Whole Life policy
37. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.
Adjustable Whole Life policy
Family Income policy
Joint Life (aka "First to die") policy
Social Security Benefit (Supplement) rider
38. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.
Small Employer Medical Expense plan
Medicare Part C (aka Medicare Advantage)
Civil Rights/Pregnancy Discrimination Act
Departments of an Insurer
39. Two death benefit options - Option A: death benefit ONLY; Option B: death benefit + cash value; death benefit NOT guaranteed.
Earned vs. Unearned premium
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Preferred Provider Organization (PPO)
Return of Premium rider
40. 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.
Tax implications of medical plans
Types of Medical Plans
Types of Insurers (by ownership)
Waiver of Premium provision
41. 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.
Medical Savings Account (MSA) & Health Savings Account (HSA)
Policy delivery
Types of Term Life policies
1035 Exchange
42. Privately-provided or Medicare-provided (if no private carrier) prescription drug plans for qualified individuals but w/ premium - deductible & co-pay.
Cross Purchase Plan
Medicare Part D
Occupational Disability policy
Juvenile Life (aka Jumping Juvenile) policy
43. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.
Small Employer Medical Expense plan
Joint Life (aka "First to die") policy
Insurable interest
Social Security Benefit (Supplement) rider
44. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Misstatement of Age/Sex provision
Types of Insurers (by authorization)
Key Employee policy
Experience vs. Community rating in Group Health plan
45. Intentional deception; grounds for rescission.
Elimination (aka Waiting) period
Juvenile Life (aka Jumping Juvenile) policy
Medicare Part A (aka Hospital Insurance or HI)
Fraud
46. Benefits automatically increase annually based on inflationary index (i.e. Consumer Price Index) OR flat rate (5% max.).
Reinstatement provision
Cost of Living Adjustment (COLA) Disability rider
Medical Savings Account (MSA) & Health Savings Account (HSA)
Entire Contract provision
47. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.
Guaranteed Insurability Life rider
Settlement options for Life policy (2 of 2)
Equity Indexed annuity
Payment of Premium provision
48. Private sector (Commercial) - provides LA&H - P&C - & LTC; Public sector (Gov't) - provides flood - work. comp. - Medicare/Medicaid - Group Life (SGLI/FEGLI).
Human Life Value approach
Residual disability rider
Types of Agency Authority
Types of Insurers (by sector)
49. Provides benefit during Social Security "black-out" period - up to 1 yr.
Applicant Representations vs. Warranties
Total disability (any-occupational definition)
Social Security Benefit (Supplement) rider
Palliative vs. Curative care
50. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.
Annuity Classifications (1 of 5): How premium is paid
Concealment
Dividends
Dread Disease policy