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. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.






2. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.






3. Fixed premium w/ guaranteed min. death benefit that may increase due to higher than expected investment returns.






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






5. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).






6. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.






7. Excludes coverage for suicide during 1st 2 yrs. ONLY but - if it does - all premiums must be returned to beneficiary.






8. Benefits NOT taxable; employer-paid premiums deductible to employer; individual plans not deductible unless over 7 1/2% of adjusted gross income - then excess deductible.






9. Premiums determined by target cash values or death benefit; partial cash value w/drawals allowed; transparent policy w/ unbundled premium.






10. An unintentional mistake committed by an insurance representative; may be covered by E&O insurance.






11. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.






12. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.






13. 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.






14. Responsible adult trustee designated to manage death benefits for minor child beneficiary until adulthood.






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. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.






17. 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.






18. Intentional OR unintentional failure to disclose material underwriting facts that should have been disclosed; grounds for policy rescission.






19. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.






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






21. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.






22. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.






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






24. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.






25. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.






26. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.






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






28. If Insured & primary beneficiary die due to same act (w/in 14 days) - primary assumed 1st to die & contingent beneficiary paid death benefit.






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






30. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).






31. 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;






32. Must be delivered in person or by certified - registered or 1st-class mail w/ signature - unless waived by Insurance Commissioner.






33. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.






34. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.






35. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.






36. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.






37. No-charge annuity w/drawals allowed up to 10% of total - THEN penalized on sliding scale based on # policy yrs.; conditionally waived.






38. 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






39. 'The inability to perform ANY gainful occupation'.






40. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.






41. Expands individual WL policy to include Term Life for dependents (spouse - children - etc.).






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






43. PURELY employer-funded account to reimburse employees for qualified medical expenses not covered by group health plan.






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






45. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.






46. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.






47. Permanent disability due to total loss of sight - hearing - speech or use of 2 + limbs; benefits paid even while continuing to work.






48. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).






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






50. Pre-existing illness/injury; Waiting period; Elimination period; Probationary period; Benefits - Exclusions - Limitations; Underwriting reqs.