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Test your basic knowledge |
CA Life Agent Exam
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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. Allows Term policy conversion to Permanent policy w/out medical exam; must be identical or lower death benefit; based on either attained OR original age.
Convertibility provision
Family Maintenance policy
Types of Renewability provisions
Experience vs. Community rating in Group Health plan
2. Provides 24 hr. health coverage both "on" & "off" job - but may cause coverage duplication & coordination challenges.
Concealment exceptions
Family Income policy
24 Hour Coverage (CA)
1035 Exchange
3. 1: parties to contract; 2: insured party or life; 3: insurable interest - if 3rd party; 4: risks insured against; 5: policy period (term); 6: premium & mode.
Supplemental Major Medical plan
Valid life insurance contracts must identify...
Transplant/Cosmetic Surgery rider
Change of Occupation provision
4. A lapsed policy may be reinstated if not longer than 3-5 yrs. - & proof of insurability re-established - & back premiums + interest paid.
Endowment Life policy
Reinstatement provision
Insuring clause/provision (aka Insuring Agreement)
Valid life insurance contracts must identify...
5. 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;
Underwriting risk categories
Family Income policy
Equity Indexed annuity
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
6. No deductible coverage for: daily room/board; ancillary costs; surgeon &/or physician expense (for added premium).
Total disability (more restrictive definition)
Law of Large Numbers
Basic Medical plan
Tax implications of an Estate
7. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.
Dividends
Palliative vs. Curative care
Health Reimbursement Account (HRA)
Policy delivery
8. 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.
Long Term Care (LTC) policy
Common Disability Exclusions
Non-Occupational Disability policy
Endowment Life policy
9. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).
Legal Action provision
Life insurance policy
Types of Insurers (by authorization)
Common Disability Exclusions
10. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.
Point of Service plan
Family Maintenance policy
Major Medical plan
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
11. Provides coverage for specific disease(s) - such as cancer or leukemia.
Dread Disease policy
Free Look provision
Business Continuation (aka Buy-Sell) Disability policy
Types of Insurers (by sector)
12. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.
Free Look provision
Parole Pardon Rule
Small Employer Medical Expense plan
Return of Premium rider
13. Prohibited w/ regard to testing for people of same class; test results must remain confidential; coverage may be declined (once discovered).
Social Security Benefit (Supplement) rider
Adverse selection
AIDS/HIV discrimination
Dread Disease policy
14. Privately-provided or Medicare-provided (if no private carrier) prescription drug plans for qualified individuals but w/ premium - deductible & co-pay.
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Medicare Part D
Types of Insurers (miscellaneous)
Beneficiary provisions
15. Permanent disability due to total loss of sight - hearing - speech or use of 2 + limbs; benefits paid even while continuing to work.
Dependent coverage
Types of Accident & Health insurance
Business Continuation (aka Buy-Sell) Disability policy
Presumptive disability
16. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.
Parole Pardon Rule
Types of Insurers (by ownership)
Departments of an Insurer
Medicaid/Medi-Cal
17. Waives premium upon disability of Insured until return to work; disability must persist for 6 mths. or longer. Cash value & dividends not affected.
Concealment
Types of Renewability provisions
Waiver of Premium (Waiver of Cost of Insurance) rider
Single Pay Whole Life policy
18. Prepaid med. benefits for members ONLY w/ approved primary care M.D. (HMO employee); focus on preventative care; low co-pay.
Health Maintenance Organization (HMO)
Single Pay Whole Life policy
Applicant Representations vs. Warranties
Dental Plan
19. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Business Continuation (aka Buy-Sell) policy
Juvenile Life (aka Jumping Juvenile) policy
Parole Pardon Rule
20. Provides disability income during surgery recovery from life-threatening condition (& sometimes cosmetic surgery).
Medicare Part A (aka Hospital Insurance or HI)
Exclusions for Major Medical plan
Transplant/Cosmetic Surgery rider
1035 Exchange
21. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.
Claim Form (aka Proof of Loss Form) provision
Legal Action provision
Key Employee Disability policy
Proof of Loss provision
22. Death benefit determined by Insured's financial goals & needs (minus assets).
Needs approach (most common)
Flexible Spending Account (FSA)
Comprehensive Major Medical plan
Claim Form (aka Proof of Loss Form) provision
23. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Primary Insurance Amount (PIA)
Health Maintenance Organization (HMO)
Accidental Death & Dismemberment (AD&D) Life policy
Reinsurance
24. Agents - represent Insurer; Brokers - represent themselves & Insured; Solicitors - represent one agent to solicit leads.
COBRA Time Limitations
Accidental Death & Dismemberment (AD&D) Disability rider
Types of Licensed Producers
Business Overhead Expense (BOE) Disability policy
25. Same as WL but premium low for set # yrs. - THEN premiums vary (+ or -) based on Insurer's investment returns - w/ Gmax.
Indeterminate Premium Whole Life policy
Supplemental Major Medical plan
Concealment exceptions
Policy loans
26. Mortality is the statistical possibility of death @ each age. Morbidity is the statistical possibility & extent of disability @ each age.
Guaranteed Insurability Life rider
Total disability (any-occupational definition)
Mortality vs. Morbidity tables
Approval Type Conditional receipt
27. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.
Departments of an Insurer
Elimination (aka Waiting) period
Dental Plan
Pure risk vs. Speculative risk
28. Mathematical law stating the larger # of occurrences - the more predictable the losses; used to calculate premiums.
Equity Index Whole Life policy
Permanent vs. Temporary disability
Law of Large Numbers
Elements to contract
29. Must be delivered in person or by certified - registered or 1st-class mail w/ signature - unless waived by Insurance Commissioner.
Policy delivery
Medicare
Major Medical plan
Flexible Spending Account (FSA)
30. Intentional deception; grounds for rescission.
Payor (aka Waiver of Payor's Premium) rider
Fraud
Non-forfeiture options for WL policy
Employer Liability
31. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.
Dividends
Policy delivery
Parole Pardon Rule
Phases of an annuity
32. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.
Insurance contract characteristics (2 of 2)
Types of Licensed Producers
Tax implications of an Annuity (1 of 2)
Payment of Premium provision
33. Benefits automatically increase annually based on inflationary index (i.e. Consumer Price Index) OR flat rate (5% max.).
Law of Large Numbers
Departments of an Insurer
Medicare Supplement or Medigap policy
Cost of Living Adjustment (COLA) Disability rider
34. 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).
Point of Service plan
Risk management
Non-Occupational Disability policy
Limited Pay Whole Life policy
35. Prepaid med. benefits for "subscribers" @ approved facilities; many non-profit; Blue Cross - Hospital stays; Blue Shield - M.D. costs.
Renewability provision
Blue Cross/Blue Shield
Dividend options
Business Continuation (aka Buy-Sell) Disability policy
36. A company providing lump sum buyout (50-90% of total) of Life policy; becomes owner & beneficiary & assumes premium payments; usually terminally ill viator.
Annuity surrender charges
Viatical Settlement Provider (VSP)
Types of Medical Plans
Occupational Disability policy
37. 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.
Tax implications of an Estate
Medicaid/Medi-Cal
Peril vs. Hazard
24 Hour Coverage (CA)
38. Identical to Incontestable Clause in Life policy.
Types of Insurers (by domicile)
Time Limit on Certain Defenses provision
Settlement options for Life policy (2 of 2)
Common Disability Exclusions
39. If Insured & primary beneficiary die due to same act (w/in 14 days) - primary assumed 1st to die & contingent beneficiary paid death benefit.
Annuity Classifications (3 of 5): Source of income
Common Disaster (Simultaneous Death Act) clause/provision
Term Life policy
Health Maintenance Organization (HMO)
40. The state in which the contract is accepted or delivered is the state that possesses regulatory jurisdiction over Group plan.
Notice of Claim provision
Valid life insurance contracts must identify...
Doctrine of Comity
Incontestability clause/provision
41. Private sector (Commercial) - provides LA&H - P&C - & LTC; Public sector (Gov't) - provides flood - work. comp. - Medicare/Medicaid - Group Life (SGLI/FEGLI).
Dependent coverage
Key Employee Disability policy
Types of Insurers (by sector)
Types of Insurers (by domicile)
42. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.
Tax implications of an Annuity (1 of 2)
Medical cost containment (aka Managed care)
Insuring clause/provision (aka Insuring Agreement)
Survivorship (aka "Last to die") policy
43. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.
Types of hazards
Annuity surrender charges
Whole (aka Permanent or Straight) Life policy
Viatical Settlement Provider (VSP)
44. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.
Payor (aka Waiver of Payor's Premium) rider
Total disability (any-occupational definition)
Annuity surrender charges
Life insurance policy
45. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Key Employee policy
Policy loans
Requirements to sell variable life products
Health Insurance Portability and Accountability Act (HIPAA)
46. Funding mechanism whereby employer & employee share cost of premium. Upon death - benefit is shared between employer & beneficiary.
Types of reinsurance
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Palliative vs. Curative care
Split Dollar Plan
47. Provides supplemental coverage for physician/surgeon fees if enrolled (during enrollment period ONLY) & pay monthly premium w/ deductible and co-insurance.
Medical cost containment (aka Managed care)
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Tax implications of Disability policy
7 Pay Test
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.
Common Disability Exclusions
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Types of Renewability provisions
Partial disability rider
49. Written policy terms supersede oral statements made prior to policy issue.
Renewability provision
Parole Pardon Rule
Single Pay Whole Life policy
Beneficiary provisions
50. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.
Dental Plan
Key Employee policy
Split Dollar Plan
IRS Penalties for Annuities
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