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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. 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
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Risk management
Needs approach (most common)
2. Representation - oral or written statement made to best of knowledge or belief; Warranty - statement guaranteed/presumed/understood to be true.
Applicant Representations vs. Warranties
Adverse selection
Variable Universal Life policy
Common Life Exclusions
3. Intentional OR unintentional failure to disclose material underwriting facts that should have been disclosed; grounds for policy rescission.
Major Medical plan
Concealment
Modified Premium Whole Life policy
Renewability provision
4. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Limited Pay Whole Life policy
Loss exposure
Endowment Life policy
5. Waives premium on Life policy for minor child until age 21 in event premium payor dies or becomes disabled.
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6. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.
Binding receipt (aka Temporary Insurance Agreement)
Dental Plan
Premium modes
Indemnify
7. 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.
Types of Renewability provisions
Grace Period provision
Reinstatement provision
Tax implications of an Estate
8. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.
Incontestability clause/provision
Single Pay Whole Life policy
Waiver of Premium (Waiver of Cost of Insurance) rider
Civil Rights/Pregnancy Discrimination Act
9. Available for any reason up to full cash value @ fixed (max 8%) OR variable interest rate; loan $ + interest deducted from benefit @ death.
Parole Pardon Rule
Requirements to sell variable life products
Policy loans
Family Income policy
10. Process which prevents claim denial as a result of false statement or promise (made by Insurer) - which was relied upon by Insured.
Market Value Adjusted (aka Modified Guaranteed) annuity
Types of Term Life policies
Policy delivery
Estoppel
11. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).
Term Life policy
IRS Penalties for Annuities
Types of Insurers (by authorization)
Types of Licensed Producers
12. A lapsed policy may be reinstated if not longer than 3-5 yrs. - & proof of insurability re-established - & back premiums + interest paid.
Valid life insurance contracts must identify...
Earned vs. Unearned premium
Cross Purchase Plan
Reinstatement provision
13. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).
Convertibility provision
1035 Exchange
Social Security Benefit (Supplement) rider
Payment of Premium provision
14. Info already known; Info that should have been known; Waived info; Irrelevant info.
Limited Pay Whole Life policy
Concealment exceptions
Preferred Provider Organization (PPO)
Common Disaster (Simultaneous Death Act) clause/provision
15. 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.
Valid life insurance contracts must identify...
Current Assumption (aka Interest-Sensitive) Whole Life policy
Insurable interest
Workers' Compensation insurance
16. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).
Elimination (aka Waiting) period
Adjustable Whole Life policy
Variable Universal Life policy
Cost of Living Adjustment (COLA) Life rider
17. 'The inability to perform ANY gainful occupation'.
Comprehensive Major Medical plan
Medical cost containment (aka Managed care)
Total disability (any-occupational definition)
Modified Endowment Contract (MEC)
18. 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.
Cash value
Settlement options for Life policy (2 of 2)
Health Insurance Portability and Accountability Act (HIPAA)
Types of Term Life policies
19. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.
Elements to contract
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Insuring clause/provision (aka Insuring Agreement)
Family Maintenance policy
20. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.
Non-Occupational Disability policy
Insurer (as defined by CIC)
Cost of Living Adjustment (COLA) Disability rider
Indemnify
21. Same as WL but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Beneficiary provisions
Notice of Claim provision
Variable Life policy (1 of 2)
Misstatement of Age/Sex provision
22. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Cost of Living Adjustment (COLA) Life rider
Key Employee policy
Flexible Spending Account (FSA)
23. Same as WL but can be "paid-up" early by paying larger premium for shorter payment period (i.e. 10 Pay Life - 20 Pay Life).
Limited Pay Whole Life policy
Key Employee policy
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Mortality vs. Morbidity tables
24. 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.
Types of Licensed Producers
Dependent coverage
Renewability provision
Small Employer Medical Expense plan
25. Provides hospital insurance automatically @ age 65 (if FICA qualified) @ no fee but may have deductible & co-pay.
Key Employee Disability policy
Preferred Provider Organization (PPO)
Total disability (any-occupational definition)
Medicare Part A (aka Hospital Insurance or HI)
26. 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 Renewability provisions
Disability Income policy
Types of Licensed Producers
Business Continuation (aka Buy-Sell) Disability policy
27. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.
Return of Premium rider
Levels of Long Term Care provided
Annuity Classifications (2 of 5): When benefits begin
Convertibility provision
28. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.
Types of reinsurance
Common Disaster (Simultaneous Death Act) clause/provision
Cash value
Revocable vs. Irrevocable beneficiary
29. 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.
Insurability Type Conditional receipt
Non-forfeiture options for WL policy
Market Value Adjusted (aka Modified Guaranteed) annuity
Impairment (Exclusion) rider
30. Dividends are NOT taxable but interest is. Loan interest is NOT tax-deductible. Interest paid by Insurer on retained funds is taxable.
Exclusions for Major Medical plan
Tax implications of Dividends - Loans & Interest
Graded Premium Whole Life policy
Common Life Exclusions
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.
Earned vs. Unearned premium
Employer-Administered plan
Family policy
Tax implications of Disability policy
32. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.
Medicare Supplement or Medigap policy
Dividend options
Suicide clause/provision
Pure risk vs. Speculative risk
33. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.
Experience vs. Community rating in Group Health plan
Types of hazards
Common Disaster (Simultaneous Death Act) clause/provision
Underwriting risk categories
34. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.
Small Employer Medical Expense plan
Types of Renewability provisions
Rate (as defined by CIC)
Valid life insurance contracts must identify...
35. Allows for Term policy renewal @ higher premium w/out medical exam; guarantees insurability; based on actual/attained age.
Split Dollar Plan
CA Work. Comp. Statutes
Renewability provision
Modified Premium Whole Life policy
36. Intentional deception; grounds for rescission.
Medicare
Entire Contract provision
Retrocession
Fraud
37. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Accidental Death & Dismemberment (AD&D) Life policy
Settlement options for Life policy (1 of 2)
COBRA Time Limitations
Proof of Loss provision
38. 1: Req. - unless self-employed; 2: 7-day wait for disability benefits; 3: Premium based on ex-mod; 4: Rates approved by CDI; 5: to sell - must satisfy education reqs.
Types of Insurers (by authorization)
Settlement options for Life policy (1 of 2)
Tax implications of Disability policy
CA Work. Comp. Statutes
39. Provides coverage for specific disease(s) - such as cancer or leukemia.
Dread Disease policy
Human Life Value approach
Parole Pardon Rule
Tax implications of Disability policy
40. Coverage remains in effect for 31 days past premium due date; benefits paid during grace period would be deducted from sum.
Types of Agency Authority
Total disability (as commonly defined)
Estoppel
Grace Period provision
41. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.
Family Income policy
Rescission
Rehabilitation rider
Automatic Premium Loan (APL) provision
42. Prepaid med. benefits for members ONLY w/ approved primary care M.D. (HMO employee); focus on preventative care; low co-pay.
Convertibility provision
Juvenile Life (aka Jumping Juvenile) policy
Law of Large Numbers
Health Maintenance Organization (HMO)
43. Receipt whereby coverage incepts ONLY after underwriting approval.
Approval Type Conditional receipt
Underwriting risk categories
Occupational Disability policy
Revocable vs. Irrevocable beneficiary
44. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.
Variable Life policy (2 of 2)
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Modified Premium Whole Life policy
Tax implications of an Annuity (1 of 2)
45. Group plan initially self-funded by employer (like SIR); after which - group plan Insurer covers (up to policy limit); requires TPA.
Relation of Earnings to Insurance provision
Employer-Administered plan
Loss exposure
Life insurance policy
46. 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.
Dividend options
Accidental Death (aka Multiple Indemnity) rider
Cost of Living Adjustment (COLA) Disability rider
Types of Insurers (by authorization)
47. Unilateral - Insurer provides contract; Adhesion - parties must adhere to terms; Aleatory - benefits may not inure equally.
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Insurance contract characteristics (1 of 2)
Concealment exceptions
Automatic Premium Loan (APL) provision
48. Funding mechanism whereby employer & employee share cost of premium. Upon death - benefit is shared between employer & beneficiary.
Permanent vs. Temporary disability
Experience vs. Community rating in Group Health plan
Concealment
Split Dollar Plan
49. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.
Waiver of Premium provision
Indemnify
Joint Life (aka "First to die") policy
Exclusions to Work. Comp.
50. No deductible coverage for: daily room/board; ancillary costs; surgeon &/or physician expense (for added premium).
Viatical Settlement Provider (VSP)
Annuity Classifications (2 of 5): When benefits begin
Family Maintenance policy
Basic Medical plan