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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. Life license + NASD (FINRA) Series 6 or 7.






2. Tendency of poorer risks to seek insurance.






3. Provides hospital insurance automatically @ age 65 (if FICA qualified) @ no fee but may have deductible & co-pay.






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






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






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






7. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.






8. Same as WL but w/ Decreasing Term rider; upon death - pays monthly income for REMAINING term AFTER which pays full death benefit.






9. Domestic - within home state; Foreign - outside home state; Alien - outside home country.






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






11. Covers entire family w/ WL for breadwinner & (convertible) Level Term for spouse & children (until certain age).






12. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.






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






14. Potential circumstance that could cause a loss; measured in dollars.






15. Receipt whereby coverage incepts immediately upon submission of full consideration - unless declined & premium refunded.






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






17. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)






18. 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.






19. Representation - oral or written statement made to best of knowledge or belief; Warranty - statement guaranteed/presumed/understood to be true.






20. If Insured changes to: more hazardous job - benefits reduced; less hazardous job - premiums reduce.






21. Waives premium on Life policy for minor child until age 21 in event premium payor dies or becomes disabled.

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






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






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






25. Provides coverage for specific disease(s) - such as cancer or leukemia.






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






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






28. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.






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






30. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.






31. 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.






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






33. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.






34. Waives premium upon disability of Insured until return to work; disability must persist for 90 days or longer; 1st 90 day premiums refunded after 90 days.






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






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.






37. Price of insurance per exposure unit.






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






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






40. Monthly; Quarterly; Semi-annually; Annually (cheapest due to less admin cost).






41. Same as Term Life but provides living benefit (endowment) to policy owner if Insured survives entire term.






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






43. Written policy terms supersede oral statements made prior to policy issue.






44. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.






45. Same as WL but w/ Level Term rider; upon death - pays monthly income for FULL term AFTER which pays full death benefit.






46. Level - fixed death benefit - premium fixed until renewal; Decreasing - death benefit decreases over term - premium fixed until renewal; Increasing - death benefit increases over term - premium fixed until renewal.






47. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.






48. Refund of 50-80% of premium (minus claims paid) every 5-10 yrs. OR age 65; expensive!






49. Federal law allows employees/their dependents to continue group benefits w/in 60 days after termination (if employer has 20+ employees); Insured pays premium @ 102% of group cost.






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







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