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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. Provides coverage for specific disease(s) - such as cancer or leukemia.
Dread Disease policy
Group Disability plan
Automatic Premium Loan (APL) provision
Long Term Care (LTC) policy
2. Physical - slippery floor; Moral - dishonest acts; Morale - carelessness or recklessness.
Change of Occupation provision
Types of hazards
Business Continuation (aka Buy-Sell) policy
Blackout Period
3. Agents - represent Insurer; Brokers - represent themselves & Insured; Solicitors - represent one agent to solicit leads.
Joint Life (aka "First to die") policy
Tax implications of an Annuity (1 of 2)
Types of Licensed Producers
Medicare Part A (aka Hospital Insurance or HI)
4. Same as WL but w/ adjustable death benefit (& corresponding premium) & over-fund option but w/ annually renewable term (ART).
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Types of Renewability provisions
Pure risk vs. Speculative risk
Valid life insurance contracts must identify...
5. Policy must be delivered w/ original (or copy of same) application attached.
Key Employee policy
Tax implications of Dividends - Loans & Interest
Entire Contract provision
Residual disability rider
6. Provides benefit during Social Security "black-out" period - up to 1 yr.
Errors & Omissions (E&O)
Social Security Benefit (Supplement) rider
Primary Insurance Amount (PIA)
AIDS/HIV discrimination
7. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.
Time Limit on Certain Defenses provision
Insuring clause/provision (aka Insuring Agreement)
Free Look provision
Modified Premium Whole Life policy
8. 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
Cost of Living Adjustment (COLA) Disability rider
Misstatement of Age/Sex provision
Single Pay Whole Life policy
9. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Group Disability plan
Considerations in replacing Health insurance
Policy loans
10. Part A - Inpatient hospital deductibles vary on # of days; limited reserve days; finite benefit; 1st 3 pints blood; Part B - 20% co-payment.
Medicare Part A & B "Gaps"
Medi-Cal Share Cost plan
Accidental Death & Dismemberment (AD&D) Life policy
Legal Action provision
11. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.
Beneficiary provisions
1035 Exchange
Transplant/Cosmetic Surgery rider
Equity Index Whole Life policy
12. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.
Adjustable Whole Life policy
Tax implications of Disability policy
Common Accident provision
Conformity with State Statute provision
13. Excludes coverage for specific injury/illness either temporarily or permanently in order to eliminate pre-existing condition.
Impairment (Exclusion) rider
Mortality vs. Morbidity tables
Dependent coverage
Tax implications of Disability policy
14. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.
Requirements to sell variable life products
Dental Plan
Factors that determine premium
Trial Application (aka Request for Offer)
15. Allows for use of HMO/PPO or other private carrier to provide expanded benefits @ additional premium & if enrolled in BOTH Parts A & B.
Medi-Cal Share Cost plan
Medicare Part C (aka Medicare Advantage)
Employee Retirement Income Security Act (ERISA)
Accidental Death & Dismemberment (AD&D) Disability rider
16. Death benefit determined by Insured's financial goals & needs (minus assets).
Types of Agency Authority
Premium modes
Needs approach (most common)
Employee Retirement Income Security Act (ERISA)
17. Provides % of monthly income benefit if Insured becomes disabled due to illness or accident.
Automatic Premium Loan (APL) provision
24 Hour Coverage (CA)
Disability Income policy
7 Pay Test
18. Provides hospital insurance automatically @ age 65 (if FICA qualified) @ no fee but may have deductible & co-pay.
Tax implications of an Annuity (1 of 2)
Medicare Part A (aka Hospital Insurance or HI)
Credit Life policy
Cost of Living Adjustment (COLA) Life rider
19. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.
Medi-Cal Share Cost plan
Doctrine of Comity
Proof of Loss provision
Limited Pay Whole Life policy
20. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.
Tax implications of medical plans
Types of reinsurance
Policy delivery
Joint Life (aka "First to die") policy
21. Earned premium is $ paid for coverage to date. Unearned premium is $ paid & returnable due to coverage not provided.
Total disability (more restrictive definition)
Pure risk vs. Speculative risk
Earned vs. Unearned premium
Consolidated Omnibus Budget Reconciliation Act (COBRA)
22. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).
1035 Exchange
Annuity Classifications (2 of 5): When benefits begin
Tax implications of medical plans
Types of Accident & Health (A&H) providers
23. 4: Funds retained by Insurer until w/drawn - interest ONLY paid monthly (taxable); 5: Paid-up immediate annuity.
Disability Income policy
Dependent coverage
Settlement options for Life policy (2 of 2)
Policy loans
24. Policy provisions must conform to state regulations where policy is sold.
Health Reimbursement Account (HRA)
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Conformity with State Statute provision
Occupational Disability policy
25. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.
Employee Retirement Income Security Act (ERISA)
Insuring clause/provision (aka Insuring Agreement)
7 Pay Test
Medi-Cal Share Cost plan
26. Prepaid med. benefits for members ONLY w/ approved primary care M.D. (HMO employee); focus on preventative care; low co-pay.
Health Maintenance Organization (HMO)
Blue Cross/Blue Shield
Reinstatement provision
Business Continuation (aka Buy-Sell) policy
27. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.
Return of Premium rider
Experience vs. Community rating in Group Health plan
Types of Accident & Health insurance
Loss exposure
28. 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
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Entire Contract provision
Automatic Premium Loan (APL) provision
Return of Premium rider
29. Same as WL but w/ Level Term rider; upon death - pays monthly income for FULL term AFTER which pays full death benefit.
Joint Life (aka "First to die") policy
Types of Insurers (by sector)
Settlement options for Life policy (1 of 2)
Family Maintenance policy
30. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).
Cost of Living Adjustment (COLA) Life rider
Conformity with State Statute provision
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Preferred Provider Organization (PPO)
31. 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
Conformity with State Statute provision
Tax implications of an Annuity (1 of 2)
Rehabilitation rider
32. Written policy terms supersede oral statements made prior to policy issue.
Variable Life policy (1 of 2)
Parole Pardon Rule
Elimination (aka Waiting) period
Insurability Type Conditional receipt
33. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.
Business Continuation (aka Buy-Sell) Disability policy
Conformity with State Statute provision
Types of Accident & Health (A&H) providers
Endowment Life policy
34. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.
Applicant Representations vs. Warranties
Types of Insurers (by ownership)
Blackout Period
Types of Insurers (by sector)
35. 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.
Common Disability Exclusions
Mortality vs. Morbidity tables
Preferred Provider Organization (PPO)
Common Accident provision
36. 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.
Plans A-L of Medical Supplement or Medigap
Suicide clause/provision
Medicare Part A (aka Hospital Insurance or HI)
Binding receipt (aka Temporary Insurance Agreement)
37. Compensates business for loss due to disability of key employee; premiums not deductible but benefits tax-free.
Key Employee Disability policy
Point of Service plan
Experience vs. Community rating in Group Health plan
Considerations in replacing Health insurance
38. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.
Relation of Earnings to Insurance provision
Annuity Classifications (1 of 5): How premium is paid
Presumptive disability
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
39. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.
Binding receipt (aka Temporary Insurance Agreement)
Retrocession
Accidental Death (aka Multiple Indemnity) rider
Medicare Part D
40. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).
Annuity surrender charges
Basic Medical plan
Spendthrift provision
Insurable interest
41. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.
7 Pay Test
Tax implications of Dividends - Loans & Interest
Settlement options for Life policy (2 of 2)
Exclusions for Major Medical plan
42. 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)
Payor (aka Waiver of Payor's Premium) rider
Doctrine of Comity
Human Life Value approach
43. Same as WL but premium low for 1st 5 yrs. - THEN has annual premium increases for set # yrs. - THEN level premium.
Spendthrift provision
Graded Premium Whole Life policy
Rehabilitation rider
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
44. Responsible adult trustee designated to manage death benefits for minor child beneficiary until adulthood.
Plans A-L of Medical Supplement or Medigap
Total disability (any-occupational definition)
Non-forfeiture options for WL policy
Trusts
45. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.
Underwriting risk categories
Tax implications of Dividends - Loans & Interest
Cost of Living Adjustment (COLA) Life rider
Cash value
46. Provides for continued operation of business if partner dies - by allowing surviving partner(s) to buy deceased partner's interest in business.
Primary Insurance Amount (PIA)
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Business Continuation (aka Buy-Sell) policy
Waiver of Premium provision
47. Process whereby a reinsurer reinsures w/ another reinsurer.
Total disability (more restrictive definition)
Market Value Adjusted (aka Modified Guaranteed) annuity
Retrocession
Medicare Part C (aka Medicare Advantage)
48. No-charge annuity w/drawals allowed up to 10% of total - THEN penalized on sliding scale based on # policy yrs.; conditionally waived.
Tax implications of medical plans
Underwriting risk categories
Conformity with State Statute provision
Annuity surrender charges
49. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.
Considerations in replacing Health insurance
Rate (as defined by CIC)
Return of Cash Value rider
Payment of Premium provision
50. Dividends are NOT taxable but interest is. Loan interest is NOT tax-deductible. Interest paid by Insurer on retained funds is taxable.
Common Life Exclusions
Group Disability plan
Tax implications of an Estate
Tax implications of Dividends - Loans & Interest