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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. Basic Medical; Major Medical; Comprehensive Major Medical
Health Insurance Portability and Accountability Act (HIPAA)
Types of Medical Plans
Business Continuation (aka Buy-Sell) Disability policy
Annuity
2. Policy must be delivered w/ original (or copy of same) application attached.
Entire Contract provision
Convertibility provision
Types of Renewability provisions
Enhanced Ordinary (aka Extraordinary) Whole Life policy
3. A&H - A&S - Sickness only; Medical; Disability; Accident only; Travel accident; LTC; Medicare supplement; AD&D; Dental/Vision/Prescription; Limited.
Applicant Representations vs. Warranties
Types of Accident & Health insurance
Palliative vs. Curative care
Types of reinsurance
4. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.
Risk management
Non-forfeiture options for WL policy
Renewability provision
Common Disaster (Simultaneous Death Act) clause/provision
5. Provides professional services - rehabilitation - training/re-training & related costs to assist Insured in returning to work.
Rehabilitation rider
Health Insurance Portability and Accountability Act (HIPAA)
Incontestability clause/provision
Types of Insurers (miscellaneous)
6. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.
Health Insurance Portability and Accountability Act (HIPAA)
Cash value
Social Security Benefit (Supplement) rider
Impairment (Exclusion) rider
7. Dividends are NOT taxable but interest is. Loan interest is NOT tax-deductible. Interest paid by Insurer on retained funds is taxable.
Types of Medical Plans
Factors that determine premium
Tax implications of Dividends - Loans & Interest
Underwriting risk categories
8. Prohibited w/ regard to testing for people of same class; test results must remain confidential; coverage may be declined (once discovered).
Types of Medical Plans
Types of reinsurance
AIDS/HIV discrimination
Waiver of Premium provision
9. Same as Universal Life but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Small Employer Medical Expense plan
Exclusions for Major Medical plan
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Variable Universal Life policy
10. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.
Dividends
Term Life policy
Revocable vs. Irrevocable beneficiary
Modified Premium Whole Life policy
11. 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.
Entire Contract provision
Endowment Life policy
Annuity Classifications (1 of 5): How premium is paid
Waiver of Premium provision
12. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Applicant Representations vs. Warranties
Spendthrift provision
Group Disability plan
Elements to contract
13. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.
IRS Penalties for Annuities
Types of reinsurance
Limited Pay Whole Life policy
Earned vs. Unearned premium
14. Unintentional - up to $1 -000 + legal $; Intentional - $1 -000-5 -000 + legal $; If harmful - misdemeanor + up to 1 yr. prison + up to $10 -000.
Penalties for violating AIDS/HIV privacy laws
Business Continuation (aka Buy-Sell) Disability policy
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Comprehensive Major Medical plan
15. Covers disabilities occurring both "on" AND "off" job; "on" job benefits paid in addition to work. comp. - if applicable (i.e. individual plan).
Accidental Death & Dismemberment (AD&D) Life policy
Variable Universal Life policy
Waiver of Premium provision
Occupational Disability policy
16. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.
Types of Accident & Health (A&H) providers
Return of Premium rider
Permanent vs. Temporary disability
Dental Plan
17. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.
Variable Universal Life policy
Doctrine of Comity
Types of Licensed Producers
Annuity Classifications (3 of 5): Source of income
18. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.
Recurrent disability clause/provision
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Requirements to sell variable life products
Experience vs. Community rating in Group Health plan
19. 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
Health Insurance Portability and Accountability Act (HIPAA)
Convertibility provision
Tax implications of an Estate
20. A lapsed policy may be reinstated if not longer than 3-5 yrs. - & proof of insurability re-established - & back premiums + interest paid.
Modified Endowment Contract (MEC)
Reinstatement provision
Dividends
Waiver of Premium provision
21. Provides % of monthly income benefit if Insured becomes disabled due to illness or accident.
Disability Income policy
Variable Life policy (2 of 2)
Proof of Loss provision
Settlement options for Life policy (2 of 2)
22. PURELY employer-funded account to reimburse employees for qualified medical expenses not covered by group health plan.
Residual disability rider
Variable Life policy (1 of 2)
Medicaid/Medi-Cal
Health Reimbursement Account (HRA)
23. 'The inability to perform ANY reasonable occupation based on education - training or experience'.
Payment of Premium provision
Proof of Loss provision
Total disability (more restrictive definition)
Medi-Cal Share Cost plan
24. Same as WL but w/ Level Term rider; upon death - pays monthly income for FULL term AFTER which pays full death benefit.
Family Maintenance policy
Variable Life policy (2 of 2)
Medicare Part D
Disability Income policy
25. A company providing lump sum buyout (50-90% of total) of Life policy; becomes owner & beneficiary & assumes premium payments; usually terminally ill viator.
Medicare Part C (aka Medicare Advantage)
Viatical Settlement Provider (VSP)
Policy loans
Employer-Administered plan
26. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.
Cost of Living Adjustment (COLA) Disability rider
Joint Life (aka "First to die") policy
Dividends
Dental Plan
27. Responsible adult trustee designated to manage death benefits for minor child beneficiary until adulthood.
Relation of Earnings to Insurance provision
Tax implications of Disability policy
Policy loans
Trusts
28. Funding mechanism whereby employer & employee share cost of premium. Upon death - benefit is shared between employer & beneficiary.
Split Dollar Plan
Needs approach (most common)
Loss exposure
COBRA Time Limitations
29. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.
Modified Endowment Contract (MEC)
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Waiver of Premium (Waiver of Cost of Insurance) rider
Key Employee Disability policy
30. 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.
Requirements to sell variable life products
Return of Cash Value rider
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Family Maintenance policy
31. 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
Types of Insurers (by sector)
Single Pay Whole Life policy
Annuity Classifications (3 of 5): Source of income
32. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.
Automatic Premium Loan (APL) provision
Cost of Living Adjustment (COLA) Life rider
Total disability (more restrictive definition)
Plans A-L of Medical Supplement or Medigap
33. Same as WL but cash value increases @ current interest rates (not set); premium can start low or high & may change.
Whole (aka Permanent or Straight) Life policy
Current Assumption (aka Interest-Sensitive) Whole Life policy
AIDS/HIV discrimination
Business Overhead Expense (BOE) Disability policy
34. Same as Comprehensive Major Medical but w/ integrated deductible; much more expensive.
Supplemental Major Medical plan
Juvenile Life (aka Jumping Juvenile) policy
24 Hour Coverage (CA)
Types of Insurers (by sector)
35. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.
Revocable vs. Irrevocable beneficiary
Types of hazards
Automatic Premium Loan (APL) provision
Premium modes
36. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.
Tax implications of medical plans
Tax implications of an Annuity (1 of 2)
Needs approach (most common)
Rescission
37. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.
Settlement options for Life policy (2 of 2)
Types of Accident & Health insurance
Levels of Long Term Care provided
Employer Liability
38. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.
Exclusions for Major Medical plan
Suicide clause/provision
Incontestability clause/provision
Limited Pay Whole Life policy
39. Federally-funded but state-run program for truly indigent individuals & families providing medical care at Federal clinic.
Medicare Part D
Medicaid/Medi-Cal
1035 Exchange
Workers' Compensation insurance
40. Receipt whereby coverage incepts conditionally upon submission of full consideration and that all underwriting reqs. are met.
Insurance contract characteristics (2 of 2)
Annuity Classifications (1 of 5): How premium is paid
Types of Renewability provisions
Insurability Type Conditional receipt
41. Provides benefit during Social Security "black-out" period - up to 1 yr.
Reinsurance
Trial Application (aka Request for Offer)
Incontestability clause/provision
Social Security Benefit (Supplement) rider
42. 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...
Medicare Supplement or Medigap policy
Levels of Long Term Care provided
Automatic Premium Loan (APL) provision
43. Covers disabilities occurring ONLY "off" job; benefits do not overlap work. comp. (i.e. Group plan).
CHAMPUS (aka TriCare)
Supplemental Major Medical plan
Non-Occupational Disability policy
Family Maintenance policy
44. Provides supplemental coverage for physician/surgeon fees if enrolled (during enrollment period ONLY) & pay monthly premium w/ deductible and co-insurance.
Family Income policy
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Concealment
Types of Accident & Health insurance
45. Allows for Term policy renewal @ higher premium w/out medical exam; guarantees insurability; based on actual/attained age.
Renewability provision
Automatic Premium Loan (APL) provision
Split Dollar Plan
Elements to contract
46. Pre-existing illness/injury; Waiting period; Elimination period; Probationary period; Benefits - Exclusions - Limitations; Underwriting reqs.
Law of Large Numbers
Total disability (any-occupational definition)
Conformity with State Statute provision
Considerations in replacing Health insurance
47. Mortality is the statistical possibility of death @ each age. Morbidity is the statistical possibility & extent of disability @ each age.
Convertibility provision
Mortality vs. Morbidity tables
Annuity Classifications (2 of 5): When benefits begin
Whole (aka Permanent or Straight) Life policy
48. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.
Total disability (any-occupational definition)
Earned vs. Unearned premium
Types of reinsurance
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
49. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.
Underwriting risk categories
1035 Exchange
Notice of Claim provision
Accidental Death & Dismemberment (AD&D) Disability rider
50. Premiums determined by target cash values or death benefit; partial cash value w/drawals allowed; transparent policy w/ unbundled premium.
Age Discrimination in Employment Act (ADEA)
Tax implications of an Estate
Total disability (more restrictive definition)
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)