Test your basic knowledge |

CA Life Agent Exam

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. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).






2. Dividends are NOT taxable but interest is. Loan interest is NOT tax-deductible. Interest paid by Insurer on retained funds is taxable.






3. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).






4. Dependent children are covered until 19 or 23 (full-time student only) or until self-sufficient (if handicapped).






5. Provides supplemental coverage for physician/surgeon fees if enrolled (during enrollment period ONLY) & pay monthly premium w/ deductible and co-insurance.






6. Tendency of poorer risks to seek insurance.






7. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.






8. Mortality is the statistical possibility of death @ each age. Morbidity is the statistical possibility & extent of disability @ each age.






9. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).






10. Basic Medical; Major Medical; Comprehensive Major Medical






11. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.






12. An attempt to contain costs by employing various strategies - including wellness programs - preventative testing - outpatient & alternative procedures.






13. Allows for use of HMO/PPO or other private carrier to provide expanded benefits @ additional premium & if enrolled in BOTH Parts A & B.






14. Combination of Basic Medical & Major Medical in one policy; Basic pays 1st - then Major Medical w/ corridor deductible.






15. 'The inability to perform your OWN normal occupation or daily duties'.






16. Federal law which prohibits companies w/ 15+ employees from decreasing coverage benefits for women affected by pregnancy or childbirth.






17. 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.






18. Process whereby a reinsurer reinsures w/ another reinsurer.






19. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.






20. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.






21. 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.






22. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.






23. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.






24. Permanent - not recoverable (spinal cord injury); Temporary - recoverable (temp. illness/injury - broken limb).






25. War - 2 types; Suicide (1st 2 yrs.); Aviation (non-commercial); Hazardous hobbies; Criminal acts; Alcohol/Drug influenced.






26. 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;






27. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.






28. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.






29. Treating or mitigating loss exposures through 1: avoidance; 2: retention (deductibles); 3: sharing; 4: reduction; or 5: transfer.






30. Peril is the CAUSE of loss. Hazard is a condition that increases LIKELIHOOD of loss.






31. Policy owner must notify Insurer of loss either in writing - in person or by phone w/in 20 days.






32. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.






33. Non-qualified Annuity - Non-deductible contributions & tax-deferred growth. At pay-out - tax-free principal but taxable growth.






34. Same as WL but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.






35. Representation - oral or written statement made to best of knowledge or belief; Warranty - statement guaranteed/presumed/understood to be true.






36. If Insured changes to: more hazardous job - benefits reduced; less hazardous job - premiums reduce.






37. Provides coverage for specific disease(s) - such as cancer or leukemia.






38. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.






39. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).






40. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.






41. Unilateral - Insurer provides contract; Adhesion - parties must adhere to terms; Aleatory - benefits may not inure equally.






42. Coverage remains in effect for 31 days past premium due date; benefits paid during grace period would be deducted from sum.






43. Excludes coverage for suicide during 1st 2 yrs. ONLY but - if it does - all premiums must be returned to beneficiary.






44. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.






45. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.






46. Mandatory 100% employer-funded coverage for injuries/illnesses occurring "on" job; full-time employees only; exclusive remedy. Provides: 1: unlimited medical benefit; 2: survivor income replacement & funeral ($5 -000 max.); 3: disability benefit @ 66

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47. 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).






48. 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.






49. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.






50. Same as WL but premium low for set # yrs. - THEN premiums vary (+ or -) based on Insurer's investment returns - w/ Gmax.