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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. If Insured changes to: more hazardous job - benefits reduced; less hazardous job - premiums reduce.
Long Term Care (LTC) policy
Insuring clause/provision (aka Insuring Agreement)
Group Disability plan
Change of Occupation provision
2. 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 surrender charges
Dread Disease policy
Annuity Classifications (5 of 5): # of lives
Medicare Part A & B "Gaps"
3. Provides % of monthly income benefit if Insured becomes disabled due to illness or accident.
Disability Income policy
Insurer (as defined by CIC)
Proof of Loss provision
Pure risk vs. Speculative risk
4. Unintentional - up to $1 -000 + legal $; Intentional - $1 -000-5 -000 + legal $; If harmful - misdemeanor + up to 1 yr. prison + up to $10 -000.
Penalties for violating AIDS/HIV privacy laws
Health Maintenance Organization (HMO)
Key Employee Disability policy
Medicare Part A & B "Gaps"
5. Plan A is the CORE benefit & is least expensive; All other plans include Plan A + additional benefits. Plans F & J are high deductible. K & L are both deductible & co-pay plans.
Business Continuation (aka Buy-Sell) Disability policy
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Plans A-L of Medical Supplement or Medigap
Loss of Earnings Test
6. Life license + NASD (FINRA) Series 6 or 7.
Employer Liability
Types of Renewability provisions
Cost of Living Adjustment (COLA) Disability rider
Requirements to sell variable life products
7. Compensates business for loss due to disability of key employee; premiums not deductible but benefits tax-free.
Annuity Classifications (5 of 5): # of lives
Impairment (Exclusion) rider
Key Employee Disability policy
Exclusions to Work. Comp.
8. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).
Cash value
IRS Penalties for Annuities
Types of Insurers (by authorization)
Business Continuation (aka Buy-Sell) policy
9. Grows @ fixed interest rate for set term but cash value may adjust to prevailing rate (+ or -) if fully surrendered before term ends; % w/drawal ok.
Phases of an annuity
Key Employee Disability policy
Market Value Adjusted (aka Modified Guaranteed) annuity
Occupational Disability policy
10. Insurance purchased by other Insurer(s) to spread or diversify risk; promotes industry stability.
Reinsurance
Peril vs. Hazard
Convertibility provision
Conformity with State Statute provision
11. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.
Medicare Supplement or Medigap policy
Considerations in replacing Health insurance
Pure risk vs. Speculative risk
Rescission
12. 4: Funds retained by Insurer until w/drawn - interest ONLY paid monthly (taxable); 5: Paid-up immediate annuity.
Tax implications of Dividends - Loans & Interest
Employee Retirement Income Security Act (ERISA)
Proof of Loss provision
Settlement options for Life policy (2 of 2)
13. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Common Disability Exclusions
Valid life insurance contracts must identify...
Concealment
Key Employee policy
14. Refund of 50-80% of premium (minus claims paid) every 5-10 yrs. OR age 65; expensive!
Medical cost containment (aka Managed care)
Return of Premium rider
Graded Premium Whole Life policy
Small Employer Medical Expense plan
15. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.
Annuity
Dividends
Types of Insurers (by ownership)
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
16. 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.
Medicare
Peril vs. Hazard
Types of Insurers (by authorization)
Insuring clause/provision (aka Insuring Agreement)
17. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.
Partial disability rider
Claim Form (aka Proof of Loss Form) provision
Non-forfeiture options for WL policy
Transplant/Cosmetic Surgery rider
18. 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.
Cross Purchase Plan
Return of Cash Value rider
Credit Life policy
Partial disability rider
19. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.
Rescission
IRS Penalties for Annuities
Types of Term Life policies
Rate (as defined by CIC)
20. War - 2 types; Suicide (1st 2 yrs.); Aviation (non-commercial); Hazardous hobbies; Criminal acts; Alcohol/Drug influenced.
Return of Premium rider
Policy loans
Common Life Exclusions
Modified Premium Whole Life policy
21. Type of partial disability rider - which pays fluctuating % of lost income w/out time limit.
Free Look provision
Guaranteed Insurability Life rider
Residual disability rider
Types of Agency Authority
22. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.
Elements to contract
Types of Accident & Health (A&H) providers
Business Overhead Expense (BOE) Disability policy
Binding receipt (aka Temporary Insurance Agreement)
23. Same as WL but w/ Decreasing Term rider; upon death - pays monthly income for REMAINING term AFTER which pays full death benefit.
Family Income policy
Guaranteed Insurability Life rider
Exclusions for Major Medical plan
Health Maintenance Organization (HMO)
24. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.
Relation of Earnings to Insurance provision
Policy delivery
Single Pay Whole Life policy
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
25. Death benefit determined by Insured's financial goals & needs (minus assets).
Plans A-L of Medical Supplement or Medigap
Types of Medical Plans
Needs approach (most common)
Beneficiary provisions
26. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.
Underwriting risk categories
CA Work. Comp. Statutes
Medical cost containment (aka Managed care)
Employee Retirement Income Security Act (ERISA)
27. 'The inability to perform ANY reasonable occupation based on education - training or experience'.
Valid life insurance contracts must identify...
Total disability (more restrictive definition)
Market Value Adjusted (aka Modified Guaranteed) annuity
Return of Cash Value rider
28. Receipt whereby coverage incepts immediately upon submission of full consideration - unless declined & premium refunded.
Loss of Earnings Test
Binding receipt (aka Temporary Insurance Agreement)
Considerations in replacing Health insurance
Types of Licensed Producers
29. 1: Tax-free lump sum; 2: Monthly pay-outs for fixed time; 3: Fixed monthly payments until depleted.
Settlement options for Life policy (1 of 2)
AIDS/HIV discrimination
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Doctrine of Comity
30. Pre-existing illness/injury; Waiting period; Elimination period; Probationary period; Benefits - Exclusions - Limitations; Underwriting reqs.
Whole (aka Permanent or Straight) Life policy
Considerations in replacing Health insurance
Levels of Long Term Care provided
Estoppel
31. Policy provisions must conform to state regulations where policy is sold.
Major Medical plan
Conformity with State Statute provision
Premium modes
Errors & Omissions (E&O)
32. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Insurer (as defined by CIC)
Primary Insurance Amount (PIA)
Cash value
33. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.
Medicare Supplement or Medigap policy
Rehabilitation rider
Errors & Omissions (E&O)
Types of Licensed Producers
34. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.
Business Continuation (aka Buy-Sell) Disability policy
Waiver of Premium provision
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Errors & Omissions (E&O)
35. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.
Non-forfeiture options for WL policy
Family policy
Return of Cash Value rider
Loss of Earnings Test
36. Qualified Annuity - Tax-deductible contributions & tax-deferred growth but fully taxable w/drawals.
Policy loans
Tax implications of an Annuity (1 of 2)
Types of Accident & Health (A&H) providers
Experience vs. Community rating in Group Health plan
37. Provides benefit during Social Security "black-out" period - up to 1 yr.
Requirements to sell variable life products
Dividends
Proof of Loss provision
Social Security Benefit (Supplement) rider
38. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.
Medical Savings Account (MSA) & Health Savings Account (HSA)
Dread Disease policy
Major Medical plan
Dental Plan
39. Monthly; Quarterly; Semi-annually; Annually (cheapest due to less admin cost).
Palliative vs. Curative care
Premium modes
Business Overhead Expense (BOE) Disability policy
Common Life Exclusions
40. War; elective cosmetic surgery; routine dental; work. comp.-covered claims; self-inflicted (intentional); gov't. facility treatment; LTC; private nursing.
Juvenile Life (aka Jumping Juvenile) policy
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Exclusions for Major Medical plan
Tax implications of an Annuity (1 of 2)
41. 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.
Equity Index Whole Life policy
Equity Indexed annuity
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Total disability (more restrictive definition)
42. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.
Key Employee Disability policy
Pure risk vs. Speculative risk
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Enhanced Ordinary (aka Extraordinary) Whole Life policy
43. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).
Family policy
Insurable interest
Automatic Premium Loan (APL) provision
Rehabilitation rider
44. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.
Major Medical plan
Cross Purchase Plan
Annuity Classifications (1 of 5): How premium is paid
Law of Large Numbers
45. WL policy covering 2 or more Insureds but ONLY payable upon death of LAST Insured - generally low premium but high death benefit.
Change of Occupation provision
Accidental Death & Dismemberment (AD&D) Disability rider
Indeterminate Premium Whole Life policy
Survivorship (aka "Last to die") policy
46. Permanent - not recoverable (spinal cord injury); Temporary - recoverable (temp. illness/injury - broken limb).
Guaranteed Insurability Life rider
Permanent vs. Temporary disability
Workers' Compensation insurance
Equity Index Whole Life policy
47. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.
Insuring clause/provision (aka Insuring Agreement)
AIDS/HIV discrimination
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Estoppel
48. Req. by CA statute & may provide workers coverage for action-over claims.
Beneficiary provisions
Employer Liability
Types of Medical Plans
Reinsurance
49. 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
Business Overhead Expense (BOE) Disability policy
Major Medical plan
Split Dollar Plan
50. 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.
Beneficiary provisions
Waiver of Premium provision
Annuity
Rehabilitation rider