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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. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.
Common Disability Exclusions
Endowment Life policy
Types of Accident & Health (A&H) providers
Cash value
2. Waives premium upon disability of Insured until return to work; disability must persist for 6 mths. or longer. Cash value & dividends not affected.
Primary Insurance Amount (PIA)
Waiver of Premium (Waiver of Cost of Insurance) rider
Civil Rights/Pregnancy Discrimination Act
Adverse selection
3. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.
1035 Exchange
Disability Income policy
Key Employee policy
Point of Service plan
4. 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.
Beneficiary provisions
Long Term Care (LTC) policy
Considerations in replacing Health insurance
Permanent vs. Temporary disability
5. Refund of 50-80% of premium (minus claims paid) every 5-10 yrs. OR age 65; expensive!
Modified Endowment Contract (MEC)
Return of Premium rider
Fraud
Peril vs. Hazard
6. Policy must be delivered w/ original (or copy of same) application attached.
Types of Insurers (by authorization)
Entire Contract provision
Dread Disease policy
Levels of Long Term Care provided
7. Conditional - coverage is conditional; Personal - parties are people; Good faith - honesty/integrity; Fiduciary - req's financial trust.
Common Disaster (Simultaneous Death Act) clause/provision
Payor (aka Waiver of Payor's Premium) rider
Insurable interest
Insurance contract characteristics (2 of 2)
8. Mathematical law stating the larger # of occurrences - the more predictable the losses; used to calculate premiums.
Legal Action provision
Tax implications of Dividends - Loans & Interest
Law of Large Numbers
Waiver of Premium provision
9. Compensates business for loss due to disability of key employee; premiums not deductible but benefits tax-free.
Types of hazards
Return of Premium rider
Elements to contract
Key Employee Disability policy
10. 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.
Legal Action provision
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Settlement options for Life policy (1 of 2)
Blackout Period
11. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.
Time Limit on Certain Defenses provision
Equity Index Whole Life policy
Rehabilitation rider
Earned vs. Unearned premium
12. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.
Key Employee Disability policy
Claim Form (aka Proof of Loss Form) provision
Joint Life (aka "First to die") policy
Dividends
13. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.
Types of Insurers (by domicile)
Dependent coverage
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Non-forfeiture options for WL policy
14. Info already known; Info that should have been known; Waived info; Irrelevant info.
Experience vs. Community rating in Group Health plan
Concealment exceptions
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Modified Endowment Contract (MEC)
15. 'The inability to perform ANY reasonable occupation based on education - training or experience'.
Tax implications of an Annuity (1 of 2)
Risk management
Total disability (more restrictive definition)
Considerations in replacing Health insurance
16. 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.
Types of Term Life policies
Long Term Care (LTC) policy
Adverse selection
Non-Occupational Disability policy
17. 'The inability to perform your OWN normal occupation or daily duties'.
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Total disability (as commonly defined)
Variable Life policy (2 of 2)
Errors & Omissions (E&O)
18. Govt. organization providing health care benefits for dependents of military personnel.
Suicide clause/provision
Reinsurance
Single Pay Whole Life policy
CHAMPUS (aka TriCare)
19. 'The inability to perform ANY gainful occupation'.
Flexible Spending Account (FSA)
Types of Licensed Producers
Total disability (any-occupational definition)
Adverse selection
20. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.
7 Pay Test
Medi-Cal Share Cost plan
Medical Savings Account (MSA) & Health Savings Account (HSA)
CA Work. Comp. Statutes
21. Federal law to protect Federal employees' (& their beneficiaries') pension - group insurance - & welfare benefits.
Insurance contract characteristics (2 of 2)
Employee Retirement Income Security Act (ERISA)
Transplant/Cosmetic Surgery rider
Types of Term Life policies
22. Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling - stock investment).
Transplant/Cosmetic Surgery rider
Rehabilitation rider
Spendthrift provision
Pure risk vs. Speculative risk
23. Allows for use of HMO/PPO or other private carrier to provide expanded benefits @ additional premium & if enrolled in BOTH Parts A & B.
Types of Accident & Health (A&H) providers
Policy loans
Medicare Part C (aka Medicare Advantage)
Medicare Part B (aka Supplemental Medical Insurance or SMI)
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.
Partial disability rider
Family Maintenance policy
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Accidental Death & Dismemberment (AD&D) Disability rider
25. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.
Business Overhead Expense (BOE) Disability policy
Annuity Classifications (5 of 5): # of lives
Waiver of Premium provision
Convertibility provision
26. Premiums determined by target cash values or death benefit; partial cash value w/drawals allowed; transparent policy w/ unbundled premium.
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Point of Service plan
Reinsurance
27. Provides disability income during surgery recovery from life-threatening condition (& sometimes cosmetic surgery).
Medicare Part A & B "Gaps"
Return of Premium rider
Transplant/Cosmetic Surgery rider
Trial Application (aka Request for Offer)
28. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).
Indeterminate Premium Whole Life policy
Guaranteed Insurability Life rider
Loss of Earnings Test
Levels of Long Term Care provided
29. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.
Levels of Long Term Care provided
Spendthrift provision
Retrocession
Insurability Type Conditional receipt
30. WL policy covering 2 or more Insureds but ONLY payable upon death of LAST Insured - generally low premium but high death benefit.
Law of Large Numbers
Flexible Spending Account (FSA)
Survivorship (aka "Last to die") policy
Key Employee Disability policy
31. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Health Reimbursement Account (HRA)
Group Disability plan
Primary Insurance Amount (PIA)
Single Pay Whole Life policy
32. Upon death - death benefit is paid + the aggregate of premiums paid to date; add-on to Term policy ONLY.
Return of Premium rider
Adverse selection
Occupational Disability policy
Adjustable Whole Life policy
33. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Cost of Living Adjustment (COLA) Disability rider
Departments of an Insurer
Accidental Death (aka Multiple Indemnity) rider
34. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.
Waiver of Premium (Waiver of Cost of Insurance) rider
Adjustable Whole Life policy
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
35. Prepaid med. benefits for "subscribers" @ approved facilities; many non-profit; Blue Cross - Hospital stays; Blue Shield - M.D. costs.
Policy delivery
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Valid life insurance contracts must identify...
Blue Cross/Blue Shield
36. 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.
Blackout Period
Guaranteed Insurability Life rider
Tax implications of an Estate
Non-Occupational Disability policy
37. Period of time following any children's survivor benefit & before benefits are provided to employee's widow/widower.
Single Pay Whole Life policy
Blackout Period
Major Medical plan
Claim Form (aka Proof of Loss Form) provision
38. Receipt whereby coverage incepts conditionally upon submission of full consideration and that all underwriting reqs. are met.
Long Term Care (LTC) policy
Insurable interest
IRS Penalties for Annuities
Insurability Type Conditional receipt
39. Physical - slippery floor; Moral - dishonest acts; Morale - carelessness or recklessness.
Types of hazards
CHAMPUS (aka TriCare)
Penalties for violating AIDS/HIV privacy laws
Joint Life (aka "First to die") policy
40. Dependent children are covered until 19 or 23 (full-time student only) or until self-sufficient (if handicapped).
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Dependent coverage
Health Insurance Portability and Accountability Act (HIPAA)
Automatic Premium Loan (APL) provision
41. 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
Grace Period provision
Flexible Spending Account (FSA)
Notice of Claim provision
42. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.
Convertibility provision
Guaranteed Insurability Life rider
Presumptive disability
Medi-Cal Share Cost plan
43. Same as WL but w/ Level Term rider; upon death - pays monthly income for FULL term AFTER which pays full death benefit.
Family Maintenance policy
Exclusions for Major Medical plan
Permanent vs. Temporary disability
Types of Insurers (by sector)
44. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.
Annuity surrender charges
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Incontestability clause/provision
Legal Action provision
45. Provides benefit during Social Security "black-out" period - up to 1 yr.
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Social Security Benefit (Supplement) rider
AIDS/HIV discrimination
Types of Medical Plans
46. Written policy terms supersede oral statements made prior to policy issue.
Types of Renewability provisions
Exclusions for Major Medical plan
Key Employee Disability policy
Parole Pardon Rule
47. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.
Non-forfeiture options for WL policy
Cost of Living Adjustment (COLA) Life rider
CHAMPUS (aka TriCare)
Revocable vs. Irrevocable beneficiary
48. 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.
COBRA Time Limitations
Tax implications of an Annuity (1 of 2)
Preferred Provider Organization (PPO)
Loss exposure
49. 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).
Survivorship (aka "Last to die") policy
Age Discrimination in Employment Act (ADEA)
Major Medical plan
Limited Pay Whole Life policy
50. War; elective cosmetic surgery; routine dental; work. comp.-covered claims; self-inflicted (intentional); gov't. facility treatment; LTC; private nursing.
Civil Rights/Pregnancy Discrimination Act
Family or Dependents rider
Limited Pay Whole Life policy
Exclusions for Major Medical plan