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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. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Insurable interest
Insurance contract characteristics (1 of 2)
Total disability (as commonly defined)
2. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).
Blue Cross/Blue Shield
Types of Term Life policies
Loss exposure
Loss of Earnings Test
3. Process whereby a reinsurer reinsures w/ another reinsurer.
Misstatement of Age/Sex provision
Retrocession
Departments of an Insurer
Adjustable Whole Life policy
4. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.
Impairment (Exclusion) rider
Tax implications of Death Benefit & Cash Value
Palliative vs. Curative care
Relation of Earnings to Insurance provision
5. Federal law to protect Federal employees' (& their beneficiaries') pension - group insurance - & welfare benefits.
Employee Retirement Income Security Act (ERISA)
Dividend options
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Free Look provision
6. Part A - Inpatient hospital deductibles vary on # of days; limited reserve days; finite benefit; 1st 3 pints blood; Part B - 20% co-payment.
Employer Liability
Civil Rights/Pregnancy Discrimination Act
Types of reinsurance
Medicare Part A & B "Gaps"
7. Same as WL but premium low for 1st 5 yrs. - THEN has annual premium increases for set # yrs. - THEN level premium.
Graded Premium Whole Life policy
Incontestability clause/provision
Trial Application (aka Request for Offer)
Suicide clause/provision
8. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.
Annuity
Basic Medical plan
Departments of an Insurer
Joint Life (aka "First to die") policy
9. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.
Insurer (as defined by CIC)
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Insurance contract characteristics (1 of 2)
Dividend options
10. No deductible coverage for: daily room/board; ancillary costs; surgeon &/or physician expense (for added premium).
Time Limit on Certain Defenses provision
Market Value Adjusted (aka Modified Guaranteed) annuity
Palliative vs. Curative care
Basic Medical plan
11. Group plan initially self-funded by employer (like SIR); after which - group plan Insurer covers (up to policy limit); requires TPA.
Applicant Representations vs. Warranties
Palliative vs. Curative care
Employer-Administered plan
Term Life policy
12. Policy owner must notify Insurer of loss either in writing - in person or by phone w/in 20 days.
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Juvenile Life (aka Jumping Juvenile) policy
Notice of Claim provision
Survivorship (aka "Last to die") policy
13. An unintentional mistake committed by an insurance representative; may be covered by E&O insurance.
Risk management
Automatic Premium Loan (APL) provision
Errors & Omissions (E&O)
Types of Insurers (by sector)
14. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)
Plans A-L of Medical Supplement or Medigap
Blue Cross/Blue Shield
Annuity Classifications (1 of 5): How premium is paid
Total disability (more restrictive definition)
15. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.
Types of Insurers (by authorization)
Reinstatement provision
Free Look provision
Equity Index Whole Life policy
16. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.
Major Medical plan
Types of Agency Authority
Point of Service plan
Departments of an Insurer
17. 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.
Mortality vs. Morbidity tables
Revocable vs. Irrevocable beneficiary
Tax implications of an Estate
Employer-Administered plan
18. 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.
Binding receipt (aka Temporary Insurance Agreement)
Return of Premium rider
Elements to contract
Equity Indexed annuity
19. The state in which the contract is accepted or delivered is the state that possesses regulatory jurisdiction over Group plan.
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Insuring clause/provision (aka Insuring Agreement)
Doctrine of Comity
Tax implications of medical plans
20. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.
Business Continuation (aka Buy-Sell) Disability policy
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Current Assumption (aka Interest-Sensitive) Whole Life policy
Medi-Cal Share Cost plan
21. Receipt whereby coverage incepts immediately upon submission of full consideration - unless declined & premium refunded.
Binding receipt (aka Temporary Insurance Agreement)
Dividend options
Payor (aka Waiver of Payor's Premium) rider
Small Employer Medical Expense plan
22. 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.
Premium modes
Market Value Adjusted (aka Modified Guaranteed) annuity
Dental Plan
Business Overhead Expense (BOE) Disability policy
23. Prepaid med. benefits for "subscribers" @ approved facilities; many non-profit; Blue Cross - Hospital stays; Blue Shield - M.D. costs.
Employee Retirement Income Security Act (ERISA)
Blue Cross/Blue Shield
Rate (as defined by CIC)
Spendthrift provision
24. 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.
Point of Service plan
Plans A-L of Medical Supplement or Medigap
Types of Term Life policies
Elimination (aka Waiting) period
25. Covers entire family w/ WL for breadwinner & (convertible) Level Term for spouse & children (until certain age).
Family policy
Elimination (aka Waiting) period
Return of Premium rider
Common Life Exclusions
26. Reappearance of disability w/in 6 mth. period after "recovery" from same disability is considered recurrence - not new disability.
Medicare Part A (aka Hospital Insurance or HI)
Recurrent disability clause/provision
Convertibility provision
Beneficiary provisions
27. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.
Underwriting risk categories
Annuity surrender charges
Annuity Classifications (1 of 5): How premium is paid
Types of Insurers (by sector)
28. Mortality is the statistical possibility of death @ each age. Morbidity is the statistical possibility & extent of disability @ each age.
Employer Liability
Mortality vs. Morbidity tables
Variable Life policy (1 of 2)
Misstatement of Age/Sex provision
29. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.
Phases of an annuity
Peril vs. Hazard
Modified Endowment Contract (MEC)
AIDS/HIV discrimination
30. Life license + NASD (FINRA) Series 6 or 7.
Accidental Death & Dismemberment (AD&D) Life policy
Requirements to sell variable life products
Dependent coverage
Peril vs. Hazard
31. 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.
Claim Form (aka Proof of Loss Form) provision
Common Disability Exclusions
Impairment (Exclusion) rider
Tax implications of Disability policy
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.
Trusts
Rescission
Preferred Provider Organization (PPO)
Partial disability rider
33. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.
Occupational Disability policy
Employer Liability
Single Pay Whole Life policy
Automatic Premium Loan (APL) provision
34. Written policy terms supersede oral statements made prior to policy issue.
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Rate (as defined by CIC)
Parole Pardon Rule
Insurance contract characteristics (2 of 2)
35. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.
Life insurance policy
Valid life insurance contracts must identify...
Family or Dependents rider
Palliative vs. Curative care
36. 1: Cash (tax-free); 2: Apply to future premiums; 3: Retained by Insurer @ interest; 4: Buy Paid-up WL policy add-ons; 5: Pay-up existing policy; 6: Buy 1-yr. Term policy.
Types of Medical Plans
Dividend options
COBRA Time Limitations
Medicare
37. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.
Cash value
Types of Insurers (by authorization)
Types of Agency Authority
Types of Term Life policies
38. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).
Accidental Death & Dismemberment (AD&D) Life policy
Payment of Premium provision
1035 Exchange
Accidental Death & Dismemberment (AD&D) Disability rider
39. Covers disabilities occurring ONLY "off" job; benefits do not overlap work. comp. (i.e. Group plan).
Payor (aka Waiver of Payor's Premium) rider
Non-Occupational Disability policy
Waiver of Premium provision
Penalties for violating AIDS/HIV privacy laws
40. Provides 24 hr. health coverage both "on" & "off" job - but may cause coverage duplication & coordination challenges.
Common Disaster (Simultaneous Death Act) clause/provision
Accidental Death & Dismemberment (AD&D) Disability rider
24 Hour Coverage (CA)
Grace Period provision
41. Available for any reason up to full cash value @ fixed (max 8%) OR variable interest rate; loan $ + interest deducted from benefit @ death.
Indemnify
Policy loans
Annuity Classifications (1 of 5): How premium is paid
Major Medical plan
42. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Common Disability Exclusions
CA Work. Comp. Statutes
Loss of Earnings Test
43. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.
Disability Income policy
Non-forfeiture options for WL policy
Annuity Classifications (3 of 5): Source of income
Primary Insurance Amount (PIA)
44. 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.
Business Continuation (aka Buy-Sell) policy
Needs approach (most common)
Common Life Exclusions
Health Insurance Portability and Accountability Act (HIPAA)
45. PURELY employer-funded account to reimburse employees for qualified medical expenses not covered by group health plan.
Considerations in replacing Health insurance
Health Reimbursement Account (HRA)
Whole (aka Permanent or Straight) Life policy
Variable Life policy (2 of 2)
46. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.
Common Accident provision
Whole (aka Permanent or Straight) Life policy
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Types of Medical Plans
47. Provides benefit during Social Security "black-out" period - up to 1 yr.
Guaranteed Insurability Life rider
Social Security Benefit (Supplement) rider
Doctrine of Comity
Trusts
48. Dependent children are covered until 19 or 23 (full-time student only) or until self-sufficient (if handicapped).
Proof of Loss provision
Business Continuation (aka Buy-Sell) Disability policy
Medicare Part D
Dependent coverage
49. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.
Types of Renewability provisions
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Major Medical plan
Business Overhead Expense (BOE) Disability policy
50. Same as WL but cash value increases @ current interest rates (not set); premium can start low or high & may change.
Requirements to sell variable life products
Social Security Benefit (Supplement) rider
Current Assumption (aka Interest-Sensitive) Whole Life policy
IRS Penalties for Annuities