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






2. 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.






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






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






5. Provides for continued operation of business if partner dies - by allowing surviving partner(s) to buy deceased partner's interest in business.






6. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").






7. Death benefit determined by Insured's projected lost earnings potential.






8. Policy provisions must conform to state regulations where policy is sold.






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






10. Prepaid med. benefits for "subscribers" @ approved facilities; many non-profit; Blue Cross - Hospital stays; Blue Shield - M.D. costs.






11. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.






12. Provides 24 hr. health coverage both "on" & "off" job - but may cause coverage duplication & coordination challenges.






13. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.






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






15. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).






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






17. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.






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






19. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.






20. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).






21. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.






22. Mathematical law stating the larger # of occurrences - the more predictable the losses; used to calculate premiums.






23. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.






24. Waives premium upon disability of Insured until return to work; disability must persist for 6 mths. or longer. Cash value & dividends not affected.






25. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.






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






27. Receipt whereby coverage incepts ONLY after underwriting approval.






28. Available for any reason up to full cash value @ fixed (max 8%) OR variable interest rate; loan $ + interest deducted from benefit @ death.






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






30. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.






31. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.






32. 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.






33. Intentional deception; grounds for rescission.






34. Covers entire family w/ WL for breadwinner & (convertible) Level Term for spouse & children (until certain age).






35. Identical to Incontestable Clause in Life policy.






36. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.






37. Federal law to protect Federal employees' (& their beneficiaries') pension - group insurance - & welfare benefits.






38. A&H - A&S - Sickness only; Medical; Disability; Accident only; Travel accident; LTC; Medicare supplement; AD&D; Dental/Vision/Prescription; Limited.






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






40. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.






41. Benefits NOT taxable; employer-paid premiums deductible to employer; individual plans not deductible unless over 7 1/2% of adjusted gross income - then excess deductible.






42. Same as WL but premium low for 1st 5 yrs. - THEN has annual premium increases for set # yrs. - THEN level premium.






43. Same as Comprehensive Major Medical but w/ integrated deductible; much more expensive.






44. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.






45. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.






46. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.






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






48. Responsible adult trustee designated to manage death benefits for minor child beneficiary until adulthood.






49. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.






50. Info already known; Info that should have been known; Waived info; Irrelevant info.