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. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.






2. 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.






3. Earned premium is $ paid for coverage to date. Unearned premium is $ paid & returnable due to coverage not provided.






4. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.






5. Coverage remains in effect for 31 days past premium due date; benefits paid during grace period would be deducted from sum.






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






7. Agents - represent Insurer; Brokers - represent themselves & Insured; Solicitors - represent one agent to solicit leads.






8. Identical to Incontestable Clause in Life policy.






9. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.






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






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






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






13. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.






14. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).






15. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").






16. Prepaid med. benefits for members ONLY w/ approved primary care M.D. (HMO employee); focus on preventative care; low co-pay.






17. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.






18. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.






19. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.






20. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.






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






22. Basic Medical; Major Medical; Comprehensive Major Medical






23. Same as Term Life but provides living benefit (endowment) to policy owner if Insured survives entire term.






24. Same as WL but premium low for set # yrs. - THEN premiums vary (+ or -) based on Insurer's investment returns - w/ Gmax.






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






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






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






28. 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






29. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.






30. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.






31. 'The inability to perform ANY gainful occupation'.






32. Death benefit determined by Insured's projected lost earnings potential.






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






34. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.






35. Insurance purchased by other Insurer(s) to spread or diversify risk; promotes industry stability.






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






37. Beneficiary has right to leave death benefits / Insurer to protect $ from creditors; interest (taxable) paid on retained funds.






38. Info already known; Info that should have been known; Waived info; Irrelevant info.






39. Group plan initially self-funded by employer (like SIR); after which - group plan Insurer covers (up to policy limit); requires TPA.






40. Prepaid med. benefits for members w/ approved primary care M.D. (independent); low co-pay; non-PPO M.D. can be used at higher cost.






41. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.






42. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.






43. 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.






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






45. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.






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






47. Fraternal - non-profit - members only; Reciprocal - unincorp'd org. - members insure each other; Lloyd's Assoc. - groups sharing risks; Surplus lines - special market risks.






48. 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).






49. 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.






50. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)