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. Insurance purchased by other Insurer(s) to spread or diversify risk; promotes industry stability.






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






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






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






5. Req. by CA statute & may provide workers coverage for action-over claims.






6. Prepaid med. benefits for members ONLY w/ approved primary care M.D. (HMO employee); focus on preventative care; low co-pay.






7. 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.






8. 4: Funds retained by Insurer until w/drawn - interest ONLY paid monthly (taxable); 5: Paid-up immediate annuity.






9. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.






10. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.






11. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.






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






13. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.






14. Excludes coverage for specific injury/illness either temporarily or permanently in order to eliminate pre-existing condition.






15. Federal law which allows health coverage portability when changing jobs - so long as previous coverage was in effect 63+ days; allows some tax deductibility for LTC.






16. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.






17. Fraternal - non-profit - members only; Reciprocal - unincorp'd org. - members insure each other; Lloyd's Assoc. - groups sharing risks; Surplus lines - special market risks.






18. Two death benefit options - Option A: death benefit ONLY; Option B: death benefit + cash value; death benefit NOT guaranteed.






19. Intentional deception; grounds for rescission.






20. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.






21. Prohibited w/ regard to testing for people of same class; test results must remain confidential; coverage may be declined (once discovered).






22. 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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23. Receipt whereby coverage incepts ONLY after underwriting approval.






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






25. Price of insurance per exposure unit.






26. Upon death - death benefit is paid + the aggregate of cash value accumulated to date; add-on to WL policy ONLY.






27. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.






28. Death benefit is NOT taxable. Cash value grows tax-deferred but cost basis (base premium) is not taxable - only interest is.






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






30. Group plan initially self-funded by employer (like SIR); after which - group plan Insurer covers (up to policy limit); requires TPA.






31. 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.






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






33. Allows policy owner to w/draw set % of death benefit upon verification of terminal illness w/ expectancy 12-24 mths.; generally tax-free.






34. Same as WL but cash value increases @ current interest rates (not set); premium can start low or high & may change.






35. 'The inability to perform ANY reasonable occupation based on education - training or experience'.






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






37. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.






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






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






40. 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.






41. Tendency of poorer risks to seek insurance.






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






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






44. No deductible coverage for: daily room/board; ancillary costs; surgeon &/or physician expense (for added premium).






45. 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






46. A lapsed policy may be reinstated if not longer than 3-5 yrs. - & proof of insurability re-established - & back premiums + interest paid.






47. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.






48. Beneficiary has right to leave death benefits / Insurer to protect $ from creditors; interest (taxable) paid on retained funds.






49. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.






50. 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;