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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. 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.
Underwriting risk categories
Cross Purchase Plan
Grace Period provision
Medicare
2. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Elimination (aka Waiting) period
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Accidental Death & Dismemberment (AD&D) Disability rider
Dividends
3. Written policy terms supersede oral statements made prior to policy issue.
Parole Pardon Rule
Automatic Premium Loan (APL) provision
Modified Premium Whole Life policy
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
4. Policy provisions must conform to state regulations where policy is sold.
Conformity with State Statute provision
Medicare Part C (aka Medicare Advantage)
Partial disability rider
Return of Premium rider
5. 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
Small Employer Medical Expense plan
Payor (aka Waiver of Payor's Premium) rider
Reinsurance
6. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.
Guaranteed Insurability Life rider
24 Hour Coverage (CA)
Blue Cross/Blue Shield
Flexible Spending Account (FSA)
7. Allows for use of HMO/PPO or other private carrier to provide expanded benefits @ additional premium & if enrolled in BOTH Parts A & B.
Insurance contract characteristics (2 of 2)
Common Disaster (Simultaneous Death Act) clause/provision
Age Discrimination in Employment Act (ADEA)
Medicare Part C (aka Medicare Advantage)
8. Responsible adult trustee designated to manage death benefits for minor child beneficiary until adulthood.
Trusts
Medicare Part A & B "Gaps"
Needs approach (most common)
Return of Cash Value rider
9. Waives premium upon disability of Insured until return to work; disability must persist for 6 mths. or longer. Cash value & dividends not affected.
Types of Medical Plans
Waiver of Premium (Waiver of Cost of Insurance) rider
Supplemental Major Medical plan
Medicare Part D
10. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.
Age Discrimination in Employment Act (ADEA)
Tax implications of an Annuity (1 of 2)
Medicare Supplement or Medigap policy
Enhanced Ordinary (aka Extraordinary) Whole Life policy
11. Provides professional services - rehabilitation - training/re-training & related costs to assist Insured in returning to work.
Modified Premium Whole Life policy
Rehabilitation rider
Types of Renewability provisions
Annuity surrender charges
12. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.
Types of Accident & Health insurance
Modified Endowment Contract (MEC)
Reinstatement provision
Entire Contract provision
13. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.
Mortality vs. Morbidity tables
Types of Agency Authority
Time Limit on Certain Defenses provision
Insurable interest
14. Insured can seek legal action against Insurer for denial of claim only after 60 days and up to 3 yrs. after providing proof of loss.
Adverse selection
Legal Action provision
Loss of Earnings Test
Health Maintenance Organization (HMO)
15. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.
Long Term Care (LTC) policy
Medicare
Cross Purchase Plan
Employee Retirement Income Security Act (ERISA)
16. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)
Annuity Classifications (1 of 5): How premium is paid
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Tax implications of Disability policy
Renewability provision
17. Covers entire family w/ WL for breadwinner & (convertible) Level Term for spouse & children (until certain age).
Family or Dependents rider
Family policy
Exclusions to Work. Comp.
Accidental Death (aka Multiple Indemnity) rider
18. Period of time following any children's survivor benefit & before benefits are provided to employee's widow/widower.
Exclusions to Work. Comp.
Modified Premium Whole Life policy
Family or Dependents rider
Blackout Period
19. 1: Tax-free lump sum; 2: Monthly pay-outs for fixed time; 3: Fixed monthly payments until depleted.
Cost of Living Adjustment (COLA) Disability rider
Revocable vs. Irrevocable beneficiary
Joint Life (aka "First to die") policy
Settlement options for Life policy (1 of 2)
20. Death benefit determined by Insured's projected lost earnings potential.
Small Employer Medical Expense plan
Renewability provision
Human Life Value approach
Return of Premium rider
21. Fraternal - non-profit - members only; Reciprocal - unincorp'd org. - members insure each other; Lloyd's Assoc. - groups sharing risks; Surplus lines - special market risks.
Types of Insurers (miscellaneous)
Indeterminate Premium Whole Life policy
Medicaid/Medi-Cal
Fraud
22. Upon death - death benefit is paid + the aggregate of premiums paid to date; add-on to Term policy ONLY.
Return of Premium rider
Business Continuation (aka Buy-Sell) Disability policy
Doctrine of Comity
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
23. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.
Proof of Loss provision
Medicaid/Medi-Cal
Peril vs. Hazard
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
24. Must be delivered in person or by certified - registered or 1st-class mail w/ signature - unless waived by Insurance Commissioner.
Legal Action provision
Policy delivery
Long Term Care (LTC) policy
Common Life Exclusions
25. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.
Indeterminate Premium Whole Life policy
Revocable vs. Irrevocable beneficiary
Term Life policy
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
26. Intentional deception; grounds for rescission.
Fraud
Total disability (any-occupational definition)
CA Work. Comp. Statutes
Health Reimbursement Account (HRA)
27. 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.
Current Assumption (aka Interest-Sensitive) Whole Life policy
Primary Insurance Amount (PIA)
Applicant Representations vs. Warranties
Waiver of Premium provision
28. Same as WL but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Incontestability clause/provision
Annuity Classifications (2 of 5): When benefits begin
Variable Life policy (1 of 2)
Spendthrift provision
29. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.
Free Look provision
Current Assumption (aka Interest-Sensitive) Whole Life policy
Employer-Administered plan
Graded Premium Whole Life policy
30. Available for any reason up to full cash value @ fixed (max 8%) OR variable interest rate; loan $ + interest deducted from benefit @ death.
Settlement options for Life policy (1 of 2)
Payor (aka Waiver of Payor's Premium) rider
Policy loans
Exclusions for Major Medical plan
31. Federal law which prohibits companies w/ 15+ employees from decreasing coverage benefits for women affected by pregnancy or childbirth.
Medicare
Levels of Long Term Care provided
Civil Rights/Pregnancy Discrimination Act
Trial Application (aka Request for Offer)
32. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.
Mortality vs. Morbidity tables
Primary Insurance Amount (PIA)
Adverse selection
Types of Accident & Health (A&H) providers
33. Group plan initially self-funded by employer (like SIR); after which - group plan Insurer covers (up to policy limit); requires TPA.
Tax implications of Disability policy
Types of Agency Authority
Employer-Administered plan
Types of Insurers (by sector)
34. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.
Insurability Type Conditional receipt
Incontestability clause/provision
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Supplemental Major Medical plan
35. 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.
Partial disability rider
Medical cost containment (aka Managed care)
Tax implications of Death Benefit & Cash Value
Levels of Long Term Care provided
36. 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.
Common Life Exclusions
7 Pay Test
Plans A-L of Medical Supplement or Medigap
Types of hazards
37. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Group Disability plan
Types of hazards
Doctrine of Comity
Types of Insurers (by sector)
38. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.
Flexible Spending Account (FSA)
Major Medical plan
Types of Insurers (by ownership)
Adverse selection
39. Process whereby a reinsurer reinsures w/ another reinsurer.
Policy delivery
Retrocession
Types of Insurers (by domicile)
Payment of Premium provision
40. Type of partial disability rider - which pays fluctuating % of lost income w/out time limit.
Parole Pardon Rule
Total disability (any-occupational definition)
Residual disability rider
Underwriting risk categories
41. Federal law which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.
Variable Universal Life policy
Age Discrimination in Employment Act (ADEA)
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Graded Premium Whole Life policy
42. Representation - oral or written statement made to best of knowledge or belief; Warranty - statement guaranteed/presumed/understood to be true.
Preferred Provider Organization (PPO)
Doctrine of Comity
Medical Savings Account (MSA) & Health Savings Account (HSA)
Applicant Representations vs. Warranties
43. 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.
Cash value
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Equity Indexed annuity
Convertibility provision
44. Federal law which allows health coverage portability when changing jobs - so long as previous coverage was in effect 63+ days; allows some tax deductibility for LTC.
Health Insurance Portability and Accountability Act (HIPAA)
Variable Life policy (1 of 2)
Types of hazards
Underwriting risk categories
45. Covers disabilities occurring both "on" AND "off" job; "on" job benefits paid in addition to work. comp. - if applicable (i.e. individual plan).
Occupational Disability policy
Common Disability Exclusions
Payor (aka Waiver of Payor's Premium) rider
Beneficiary provisions
46. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.
Juvenile Life (aka Jumping Juvenile) policy
Non-forfeiture options for WL policy
Notice of Claim provision
Tax implications of Disability policy
47. Earned premium is $ paid for coverage to date. Unearned premium is $ paid & returnable due to coverage not provided.
Exclusions for Major Medical plan
Accidental Death & Dismemberment (AD&D) Disability rider
Earned vs. Unearned premium
Experience vs. Community rating in Group Health plan
48. Permanent disability due to total loss of sight - hearing - speech or use of 2 + limbs; benefits paid even while continuing to work.
Presumptive disability
Elements to contract
Employer Liability
Elimination (aka Waiting) period
49. Excludes coverage for suicide during 1st 2 yrs. ONLY but - if it does - all premiums must be returned to beneficiary.
Suicide clause/provision
Key Employee policy
Experience vs. Community rating in Group Health plan
Annuity Classifications (3 of 5): Source of income
50. Govt. organization providing health care benefits for dependents of military personnel.
Business Overhead Expense (BOE) Disability policy
Employer-Administered plan
CHAMPUS (aka TriCare)
Cross Purchase Plan