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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. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.
Adjustable Whole Life policy
Pure risk vs. Speculative risk
Accidental Death & Dismemberment (AD&D) Disability rider
Medi-Cal Share Cost plan
2. Reappearance of disability w/in 6 mth. period after "recovery" from same disability is considered recurrence - not new disability.
Time Limit on Certain Defenses provision
Policy delivery
Recurrent disability clause/provision
Annuity Classifications (2 of 5): When benefits begin
3. Domestic - within home state; Foreign - outside home state; Alien - outside home country.
Types of Term Life policies
Types of Insurers (by domicile)
Dread Disease policy
Dividend options
4. 1: Straight aka Pure Life - lifetime income but no survivorship refund; 2: Life w/ Period Certain - lifetime income w/ death benefit of monthly annuity for remaining predetermined term. 3: Annuity Certain - monthly income paid for predetermined term
Insurability Type Conditional receipt
Indemnify
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Current Assumption (aka Interest-Sensitive) Whole Life policy
5. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Trial Application (aka Request for Offer)
Employer Liability
Incontestability clause/provision
6. 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.
Guaranteed Insurability Life rider
Medicare
Medicare Part C (aka Medicare Advantage)
Total disability (more restrictive definition)
7. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.
Basic Medical plan
Tax implications of Dividends - Loans & Interest
Waiver of Premium (Waiver of Cost of Insurance) rider
Annuity
8. Primary - if 2 or more - equally shared; Contingent (Secondary) - only if primary dead; Tertiary - only if both primary & secondary dead. If none listed - goes to estate.
Term Life policy
Beneficiary provisions
Types of hazards
Survivorship (aka "Last to die") policy
9. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.
Experience vs. Community rating in Group Health plan
Peril vs. Hazard
Equity Index Whole Life policy
Employer Liability
10. War; elective cosmetic surgery; routine dental; work. comp.-covered claims; self-inflicted (intentional); gov't. facility treatment; LTC; private nursing.
Exclusions for Major Medical plan
Annuity Classifications (5 of 5): # of lives
Long Term Care (LTC) policy
Insurable interest
11. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.
Modified Endowment Contract (MEC)
Variable Universal Life policy
Concealment
Risk management
12. Dividends are NOT taxable but interest is. Loan interest is NOT tax-deductible. Interest paid by Insurer on retained funds is taxable.
Joint Life (aka "First to die") policy
Key Employee Disability policy
Concealment exceptions
Tax implications of Dividends - Loans & Interest
13. Provides % of monthly income benefit if Insured becomes disabled due to illness or accident.
Disability Income policy
Workers' Compensation insurance
Joint Life (aka "First to die") policy
Tax implications of Dividends - Loans & Interest
14. Agreement - Offer & acceptance; Consideration - application + premium; Legal capacity - licensed &/or competent; Legal purpose - public good.
Annuity Classifications (5 of 5): # of lives
Elimination (aka Waiting) period
Approval Type Conditional receipt
Elements to contract
15. Excludes coverage for suicide during 1st 2 yrs. ONLY but - if it does - all premiums must be returned to beneficiary.
Factors that determine premium
Adjustable Whole Life policy
Cost of Living Adjustment (COLA) Life rider
Suicide clause/provision
16. Written policy terms supersede oral statements made prior to policy issue.
Family Income policy
Annuity
Life insurance policy
Parole Pardon Rule
17. Grows @ fixed interest rate for set term but cash value may adjust to prevailing rate (+ or -) if fully surrendered before term ends; % w/drawal ok.
Change of Occupation provision
Dividend options
AIDS/HIV discrimination
Market Value Adjusted (aka Modified Guaranteed) annuity
18. Provides coverage for specific disease(s) - such as cancer or leukemia.
Dread Disease policy
Viatical Settlement Provider (VSP)
Concealment
Medical Savings Account (MSA) & Health Savings Account (HSA)
19. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.
Disability Income policy
Indemnify
Market Value Adjusted (aka Modified Guaranteed) annuity
Basic Medical plan
20. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.
Split Dollar Plan
Transplant/Cosmetic Surgery rider
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Long Term Care (LTC) policy
21. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).
Health Insurance Portability and Accountability Act (HIPAA)
Medicare Part B (aka Supplemental Medical Insurance or SMI)
CHAMPUS (aka TriCare)
Types of Insurers (by authorization)
22. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.
Types of Renewability provisions
Notice of Claim provision
Elimination (aka Waiting) period
Medical cost containment (aka Managed care)
23. Two death benefit options - Option A: death benefit ONLY; Option B: death benefit + cash value; death benefit NOT guaranteed.
Preferred Provider Organization (PPO)
Blackout Period
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Insurer (as defined by CIC)
24. Time extension of benefits based on "qualifying" event. 18 mth. extension if laid off or fired; 36 mth. extension if death - divorce or child leaves home.
COBRA Time Limitations
Cost of Living Adjustment (COLA) Life rider
Endowment Life policy
7 Pay Test
25. Identical to Incontestable Clause in Life policy.
Equity Index Whole Life policy
Peril vs. Hazard
Time Limit on Certain Defenses provision
Concealment
26. 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.
Cross Purchase Plan
Valid life insurance contracts must identify...
Human Life Value approach
Dividends
27. Allows for Term policy renewal @ higher premium w/out medical exam; guarantees insurability; based on actual/attained age.
Palliative vs. Curative care
Renewability provision
24 Hour Coverage (CA)
Policy loans
28. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.
Modified Premium Whole Life policy
Renewability provision
Types of Insurers (by ownership)
Departments of an Insurer
29. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).
Settlement options for Life policy (1 of 2)
1035 Exchange
Health Reimbursement Account (HRA)
Common Disability Exclusions
30. Available for any reason up to full cash value @ fixed (max 8%) OR variable interest rate; loan $ + interest deducted from benefit @ death.
Reinstatement provision
Policy loans
Modified Premium Whole Life policy
Approval Type Conditional receipt
31. Process which prevents claim denial as a result of false statement or promise (made by Insurer) - which was relied upon by Insured.
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Peril vs. Hazard
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Estoppel
32. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.
Common Disability Exclusions
Business Overhead Expense (BOE) Disability policy
Annuity surrender charges
Dread Disease policy
33. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.
Small Employer Medical Expense plan
Business Overhead Expense (BOE) Disability policy
Dividends
Insuring clause/provision (aka Insuring Agreement)
34. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.
Proof of Loss provision
Business Overhead Expense (BOE) Disability policy
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Misstatement of Age/Sex provision
35. A company providing lump sum buyout (50-90% of total) of Life policy; becomes owner & beneficiary & assumes premium payments; usually terminally ill viator.
Joint Life (aka "First to die") policy
Binding receipt (aka Temporary Insurance Agreement)
Settlement options for Life policy (1 of 2)
Viatical Settlement Provider (VSP)
36. Physical - slippery floor; Moral - dishonest acts; Morale - carelessness or recklessness.
Claim Form (aka Proof of Loss Form) provision
Family Maintenance policy
Types of hazards
Medical Savings Account (MSA) & Health Savings Account (HSA)
37. Policy must be delivered w/ original (or copy of same) application attached.
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Exclusions for Major Medical plan
Entire Contract provision
38. War - 2 types; Suicide (1st 2 yrs.); Aviation (non-commercial); Hazardous hobbies; Criminal acts; Alcohol/Drug influenced.
Reinsurance
Transplant/Cosmetic Surgery rider
Common Life Exclusions
Payment of Premium provision
39. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.
Types of Term Life policies
Juvenile Life (aka Jumping Juvenile) policy
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Modified Premium Whole Life policy
40. Same as Term Life but provides living benefit (endowment) to policy owner if Insured survives entire term.
Endowment Life policy
Adjustable Whole Life policy
Palliative vs. Curative care
Types of Agency Authority
41. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.
Premium modes
Insurance contract characteristics (1 of 2)
Payment of Premium provision
Family Maintenance policy
42. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.
Health Maintenance Organization (HMO)
Insurer (as defined by CIC)
Parole Pardon Rule
Concealment
43. Allows Insured to increase death benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age.
Return of Premium rider
Estoppel
Guaranteed Insurability Life rider
Suicide clause/provision
44. Death benefit determined by Insured's financial goals & needs (minus assets).
Key Employee Disability policy
Needs approach (most common)
Plans A-L of Medical Supplement or Medigap
Family or Dependents rider
45. Intentional deception; grounds for rescission.
Rehabilitation rider
Total disability (any-occupational definition)
Estoppel
Fraud
46. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.
Survivorship (aka "Last to die") policy
Notice of Claim provision
Family or Dependents rider
Annuity Classifications (3 of 5): Source of income
47. Allows for use of HMO/PPO or other private carrier to provide expanded benefits @ additional premium & if enrolled in BOTH Parts A & B.
Life insurance policy
Conformity with State Statute provision
Common Accident provision
Medicare Part C (aka Medicare Advantage)
48. 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
Non-forfeiture options for WL policy
Law of Large Numbers
Survivorship (aka "Last to die") policy
49. Coverage for catastrophic loss w/ high limits - front end deductible; co-insurance (80/20%); blanket coverage; stop loss max.
Major Medical plan
Estoppel
Credit Life policy
Key Employee policy
50. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Non-forfeiture options for WL policy
Cost of Living Adjustment (COLA) Life rider
Rescission