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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. Receipt whereby coverage incepts ONLY after underwriting approval.
Comprehensive Major Medical plan
Approval Type Conditional receipt
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Split Dollar Plan
2. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.
Entire Contract provision
IRS Penalties for Annuities
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Whole (aka Permanent or Straight) Life policy
3. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.
Types of Insurers (by ownership)
Social Security Benefit (Supplement) rider
Permanent vs. Temporary disability
Single Pay Whole Life policy
4. Representation - oral or written statement made to best of knowledge or belief; Warranty - statement guaranteed/presumed/understood to be true.
Applicant Representations vs. Warranties
Insuring clause/provision (aka Insuring Agreement)
Graded Premium Whole Life policy
Common Life Exclusions
5. The state in which the contract is accepted or delivered is the state that possesses regulatory jurisdiction over Group plan.
Key Employee Disability policy
Workers' Compensation insurance
Doctrine of Comity
Concealment
6. Type of partial disability rider - which pays fluctuating % of lost income w/out time limit.
Residual disability rider
Parole Pardon Rule
Payment of Premium provision
Convertibility provision
7. 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
Free Look provision
Blue Cross/Blue Shield
8. 4: Funds retained by Insurer until w/drawn - interest ONLY paid monthly (taxable); 5: Paid-up immediate annuity.
Settlement options for Life policy (2 of 2)
IRS Penalties for Annuities
Peril vs. Hazard
Pure risk vs. Speculative risk
9. Earned premium is $ paid for coverage to date. Unearned premium is $ paid & returnable due to coverage not provided.
Peril vs. Hazard
Plans A-L of Medical Supplement or Medigap
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Earned vs. Unearned premium
10. Price of insurance per exposure unit.
Rate (as defined by CIC)
Joint Life (aka "First to die") policy
Cash value
Spendthrift provision
11. 'The inability to perform ANY gainful occupation'.
Insurable interest
Annuity Classifications (1 of 5): How premium is paid
Life insurance policy
Total disability (any-occupational definition)
12. 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.
Equity Indexed annuity
Family or Dependents rider
Joint Life (aka "First to die") policy
Valid life insurance contracts must identify...
13. 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
Non-Occupational Disability policy
Exclusions to Work. Comp.
1035 Exchange
14. Premiums determined by target cash values or death benefit; partial cash value w/drawals allowed; transparent policy w/ unbundled premium.
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Modified Premium Whole Life policy
Waiver of Premium provision
CHAMPUS (aka TriCare)
15. Coverage remains in effect for 31 days past premium due date; benefits paid during grace period would be deducted from sum.
Concealment
Grace Period provision
Types of Insurers (by domicile)
Business Overhead Expense (BOE) Disability policy
16. Fraternal - non-profit - members only; Reciprocal - unincorp'd org. - members insure each other; Lloyd's Assoc. - groups sharing risks; Surplus lines - special market risks.
Pure risk vs. Speculative risk
Rate (as defined by CIC)
Types of Insurers (miscellaneous)
Beneficiary provisions
17. No deductible coverage for: daily room/board; ancillary costs; surgeon &/or physician expense (for added premium).
Insurance contract characteristics (2 of 2)
Relation of Earnings to Insurance provision
Basic Medical plan
Survivorship (aka "Last to die") policy
18. 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
Binding receipt (aka Temporary Insurance Agreement)
Insurance contract characteristics (2 of 2)
Total disability (as commonly defined)
19. Same as WL but w/ adjustable death benefit (& corresponding premium) & over-fund option but w/ annually renewable term (ART).
Preferred Provider Organization (PPO)
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Return of Cash Value rider
Reinsurance
20. 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.
Cash value
Medical Savings Account (MSA) & Health Savings Account (HSA)
Health Insurance Portability and Accountability Act (HIPAA)
Enhanced Ordinary (aka Extraordinary) Whole Life policy
21. Guaranteed min. interest rate on cash value buildup but possible higher rate if short-term investment returns higher than expected.
Indemnify
Workers' Compensation insurance
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Non-Occupational Disability policy
22. Prohibited w/ regard to testing for people of same class; test results must remain confidential; coverage may be declined (once discovered).
AIDS/HIV discrimination
Loss exposure
Equity Indexed annuity
Types of Licensed Producers
23. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.
Accidental Death (aka Multiple Indemnity) rider
Misstatement of Age/Sex provision
Basic Medical plan
Insurance contract characteristics (1 of 2)
24. Federally-funded but state-run program for truly indigent individuals & families providing medical care at Federal clinic.
Primary Insurance Amount (PIA)
Medicaid/Medi-Cal
Workers' Compensation insurance
Premium modes
25. Dependent children are covered until 19 or 23 (full-time student only) or until self-sufficient (if handicapped).
Doctrine of Comity
Return of Premium rider
Dependent coverage
Enhanced Ordinary (aka Extraordinary) Whole Life policy
26. 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.
Dividend options
Common Disaster (Simultaneous Death Act) clause/provision
Survivorship (aka "Last to die") policy
Tax implications of an Estate
27. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.
Common Life Exclusions
Blackout Period
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Cross Purchase Plan
28. Provides for continued operation of business if partner dies - by allowing surviving partner(s) to buy deceased partner's interest in business.
Trial Application (aka Request for Offer)
Business Continuation (aka Buy-Sell) policy
Parole Pardon Rule
Rehabilitation rider
29. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.
Long Term Care (LTC) policy
Settlement options for Life policy (1 of 2)
Medi-Cal Share Cost plan
Types of Insurers (miscellaneous)
30. 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
Single Pay Whole Life policy
Social Security Benefit (Supplement) rider
Tax implications of Disability policy
31. Funding mechanism whereby employer & employee share cost of premium. Upon death - benefit is shared between employer & beneficiary.
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Family or Dependents rider
Split Dollar Plan
Return of Premium rider
32. Allows for Term policy renewal @ higher premium w/out medical exam; guarantees insurability; based on actual/attained age.
Renewability provision
Time Limit on Certain Defenses provision
7 Pay Test
Blackout Period
33. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.
Adjustable Whole Life policy
Relation of Earnings to Insurance provision
Return of Cash Value rider
Joint Life (aka "First to die") policy
34. 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
Business Continuation (aka Buy-Sell) policy
Medicaid/Medi-Cal
Types of Medical Plans
Exclusions to Work. Comp.
35. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Key Employee policy
Common Disaster (Simultaneous Death Act) clause/provision
AIDS/HIV discrimination
Suicide clause/provision
36. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.
7 Pay Test
Family policy
Joint Life (aka "First to die") policy
Key Employee policy
37. Potential circumstance that could cause a loss; measured in dollars.
Family Income policy
Types of Accident & Health insurance
Insurance contract characteristics (1 of 2)
Loss exposure
38. 1: Req. - unless self-employed; 2: 7-day wait for disability benefits; 3: Premium based on ex-mod; 4: Rates approved by CDI; 5: to sell - must satisfy education reqs.
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Group Disability plan
Experience vs. Community rating in Group Health plan
CA Work. Comp. Statutes
39. Fixed premium w/ guaranteed min. death benefit that may increase due to higher than expected investment returns.
Point of Service plan
Variable Life policy (2 of 2)
Dread Disease policy
Health Maintenance Organization (HMO)
40. 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.
Occupational Disability policy
Law of Large Numbers
Payment of Premium provision
Plans A-L of Medical Supplement or Medigap
41. Permanent disability due to total loss of sight - hearing - speech or use of 2 + limbs; benefits paid even while continuing to work.
Loss exposure
Legal Action provision
Trial Application (aka Request for Offer)
Presumptive disability
42. An attempt to contain costs by employing various strategies - including wellness programs - preventative testing - outpatient & alternative procedures.
Risk management
Social Security Benefit (Supplement) rider
Medical cost containment (aka Managed care)
Accidental Death (aka Multiple Indemnity) rider
43. 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.
Basic Medical plan
Transplant/Cosmetic Surgery rider
Types of Accident & Health (A&H) providers
Dividend options
44. Mortality is the statistical possibility of death @ each age. Morbidity is the statistical possibility & extent of disability @ each age.
CA Work. Comp. Statutes
Trial Application (aka Request for Offer)
Mortality vs. Morbidity tables
Medicare Supplement or Medigap policy
45. 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).
Phases of an annuity
Medicare Part A & B "Gaps"
Limited Pay Whole Life policy
Dependent coverage
46. Provides hospital insurance automatically @ age 65 (if FICA qualified) @ no fee but may have deductible & co-pay.
Medicare Part A (aka Hospital Insurance or HI)
Tax implications of medical plans
Annuity Classifications (1 of 5): How premium is paid
Parole Pardon Rule
47. Written policy terms supersede oral statements made prior to policy issue.
Parole Pardon Rule
Concealment
Types of Insurers (miscellaneous)
Major Medical plan
48. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.
Common Disability Exclusions
Credit Life policy
Common Accident provision
Elimination (aka Waiting) period
49. Peril is the CAUSE of loss. Hazard is a condition that increases LIKELIHOOD of loss.
Civil Rights/Pregnancy Discrimination Act
Needs approach (most common)
Total disability (as commonly defined)
Peril vs. Hazard
50. 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)
Employee Retirement Income Security Act (ERISA)
Key Employee policy
Equity Index Whole Life policy