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Test your basic knowledge |
CA Life Agent Exam
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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. 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.
Equity Indexed annuity
Types of Insurers (by sector)
Exclusions to Work. Comp.
Common Life Exclusions
2. An unintentional mistake committed by an insurance representative; may be covered by E&O insurance.
Approval Type Conditional receipt
Tax implications of an Estate
Medi-Cal Share Cost plan
Errors & Omissions (E&O)
3. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Group Disability plan
Social Security Benefit (Supplement) rider
Primary Insurance Amount (PIA)
Insurer (as defined by CIC)
4. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.
Blue Cross/Blue Shield
Whole (aka Permanent or Straight) Life policy
Tax implications of medical plans
Basic Medical plan
5. Allows Insured to increase death benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age.
Guaranteed Insurability Life rider
Medicare Part D
Graded Premium Whole Life policy
Return of Premium rider
6. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.
Types of Insurers (miscellaneous)
Trial Application (aka Request for Offer)
Trusts
Modified Premium Whole Life policy
7. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.
Dependent coverage
Small Employer Medical Expense plan
Annuity
Joint Life (aka "First to die") policy
8. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.
Policy delivery
Relation of Earnings to Insurance provision
Term Life policy
Suicide clause/provision
9. Tendency of poorer risks to seek insurance.
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Adverse selection
Doctrine of Comity
Limited Pay Whole Life policy
10. Group plan initially self-funded by employer (like SIR); after which - group plan Insurer covers (up to policy limit); requires TPA.
Whole (aka Permanent or Straight) Life policy
Dividends
Employer-Administered plan
Single Pay Whole Life policy
11. Insurance purchased by other Insurer(s) to spread or diversify risk; promotes industry stability.
Medicare Part C (aka Medicare Advantage)
Settlement options for Life policy (1 of 2)
Reinsurance
Proof of Loss provision
12. 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.
Accidental Death (aka Multiple Indemnity) rider
CA Work. Comp. Statutes
Partial disability rider
COBRA Time Limitations
13. Type of partial disability rider - which pays fluctuating % of lost income w/out time limit.
Annuity Classifications (2 of 5): When benefits begin
Residual disability rider
Dread Disease policy
Impairment (Exclusion) rider
14. 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.
Business Continuation (aka Buy-Sell) policy
Medi-Cal Share Cost plan
Plans A-L of Medical Supplement or Medigap
Types of Accident & Health insurance
15. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.
Equity Index Whole Life policy
Dread Disease policy
Non-forfeiture options for WL policy
Payor (aka Waiver of Payor's Premium) rider
16. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)
Applicant Representations vs. Warranties
Annuity Classifications (1 of 5): How premium is paid
Policy loans
Beneficiary provisions
17. Part A - Inpatient hospital deductibles vary on # of days; limited reserve days; finite benefit; 1st 3 pints blood; Part B - 20% co-payment.
Types of Licensed Producers
Family Income policy
Medicare Part A & B "Gaps"
Family or Dependents rider
18. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.
Tax implications of Dividends - Loans & Interest
Types of Renewability provisions
Common Disability Exclusions
Current Assumption (aka Interest-Sensitive) Whole Life policy
19. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.
Levels of Long Term Care provided
Tax implications of an Estate
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Family or Dependents rider
20. PURELY employer-funded account to reimburse employees for qualified medical expenses not covered by group health plan.
Medicare
Workers' Compensation insurance
Health Reimbursement Account (HRA)
Legal Action provision
21. Both Contributory & Non-contributory Group policies are deductible to employer (not employee) but benefits are taxable. Individual policy premium is NOT deductible but benefit is received tax-free.
Comprehensive Major Medical plan
Settlement options for Life policy (2 of 2)
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Tax implications of Disability policy
22. Potential circumstance that could cause a loss; measured in dollars.
Loss exposure
Supplemental Major Medical plan
Types of Medical Plans
Business Continuation (aka Buy-Sell) Disability policy
23. Same as Term Life but provides living benefit (endowment) to policy owner if Insured survives entire term.
Medicare Part A & B "Gaps"
Total disability (more restrictive definition)
Variable Life policy (1 of 2)
Endowment Life policy
24. 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.
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Beneficiary provisions
Family policy
Requirements to sell variable life products
25. Unilateral - Insurer provides contract; Adhesion - parties must adhere to terms; Aleatory - benefits may not inure equally.
Insurance contract characteristics (1 of 2)
Trial Application (aka Request for Offer)
Health Reimbursement Account (HRA)
Business Continuation (aka Buy-Sell) Disability policy
26. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.
Retrocession
Settlement options for Life policy (1 of 2)
Proof of Loss provision
Suicide clause/provision
27. Monthly; Quarterly; Semi-annually; Annually (cheapest due to less admin cost).
Types of Insurers (by authorization)
Adjustable Whole Life policy
Age Discrimination in Employment Act (ADEA)
Premium modes
28. 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.
Market Value Adjusted (aka Modified Guaranteed) annuity
Medicare
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Revocable vs. Irrevocable beneficiary
29. Savings account for medical expenses; Tax-deductible contributions; tax-deferred growth; tax-free for qualified use; taxable for non-qualified use.
Long Term Care (LTC) policy
Tax implications of an Annuity (1 of 2)
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Medical Savings Account (MSA) & Health Savings Account (HSA)
30. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).
Loss of Earnings Test
Flexible Spending Account (FSA)
24 Hour Coverage (CA)
Payor (aka Waiver of Payor's Premium) rider
31. Federal law which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.
Age Discrimination in Employment Act (ADEA)
Proof of Loss provision
Medicare Part A & B "Gaps"
Premium modes
32. Covers disabilities occurring ONLY "off" job; benefits do not overlap work. comp. (i.e. Group plan).
Indeterminate Premium Whole Life policy
Juvenile Life (aka Jumping Juvenile) policy
Non-Occupational Disability policy
Blackout Period
33. Federal law to protect Federal employees' (& their beneficiaries') pension - group insurance - & welfare benefits.
Equity Indexed annuity
Market Value Adjusted (aka Modified Guaranteed) annuity
Employee Retirement Income Security Act (ERISA)
Needs approach (most common)
34. If Insured changes to: more hazardous job - benefits reduced; less hazardous job - premiums reduce.
Health Reimbursement Account (HRA)
Change of Occupation provision
Adverse selection
Key Employee Disability policy
35. Agents - represent Insurer; Brokers - represent themselves & Insured; Solicitors - represent one agent to solicit leads.
Primary Insurance Amount (PIA)
Adverse selection
Penalties for violating AIDS/HIV privacy laws
Types of Licensed Producers
36. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.
Claim Form (aka Proof of Loss Form) provision
Graded Premium Whole Life policy
Business Overhead Expense (BOE) Disability policy
Blackout Period
37. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.
Types of Insurers (by authorization)
Life insurance policy
Non-Occupational Disability policy
COBRA Time Limitations
38. Provides supplemental coverage for physician/surgeon fees if enrolled (during enrollment period ONLY) & pay monthly premium w/ deductible and co-insurance.
Accidental Death (aka Multiple Indemnity) rider
Trusts
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Civil Rights/Pregnancy Discrimination Act
39. Two death benefit options - Option A: death benefit ONLY; Option B: death benefit + cash value; death benefit NOT guaranteed.
Elements to contract
Waiver of Premium provision
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
1035 Exchange
40. Employer w/ 25 or less employees must offer all eligible employees @ least 2 medical plan options where pre-existing conditions can't be excluded more than 1 yr.
Family or Dependents rider
Small Employer Medical Expense plan
Valid life insurance contracts must identify...
Automatic Premium Loan (APL) provision
41. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.
Palliative vs. Curative care
Phases of an annuity
Family or Dependents rider
Residual disability rider
42. 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.
1035 Exchange
Modified Premium Whole Life policy
Claim Form (aka Proof of Loss Form) provision
Legal Action provision
43. Provides coverage for specific disease(s) - such as cancer or leukemia.
Cross Purchase Plan
Dread Disease policy
Departments of an Insurer
Requirements to sell variable life products
44. War - 2 types; Suicide (1st 2 yrs.); Aviation (non-commercial); Hazardous hobbies; Criminal acts; Alcohol/Drug influenced.
Common Life Exclusions
Automatic Premium Loan (APL) provision
Claim Form (aka Proof of Loss Form) provision
Medicare
45. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).
Small Employer Medical Expense plan
Credit Life policy
Types of Insurers (by authorization)
Palliative vs. Curative care
46. Coverage remains in effect for 31 days past premium due date; benefits paid during grace period would be deducted from sum.
Grace Period provision
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
24 Hour Coverage (CA)
Health Insurance Portability and Accountability Act (HIPAA)
47. Prepaid med. benefits for members ONLY w/ approved primary care M.D. (HMO employee); focus on preventative care; low co-pay.
CHAMPUS (aka TriCare)
Settlement options for Life policy (2 of 2)
Health Maintenance Organization (HMO)
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
48. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.
Types of Insurers (miscellaneous)
Business Continuation (aka Buy-Sell) Disability policy
Employer Liability
Equity Indexed annuity
49. Covers disabilities occurring both "on" AND "off" job; "on" job benefits paid in addition to work. comp. - if applicable (i.e. individual plan).
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Occupational Disability policy
Earned vs. Unearned premium
Enhanced Ordinary (aka Extraordinary) Whole Life policy
50. Domestic - within home state; Foreign - outside home state; Alien - outside home country.
Types of Medical Plans
Types of Insurers (by domicile)
Basic Medical plan
Reinstatement provision
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