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. Death benefit determined by Insured's financial goals & needs (minus assets).






2. Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling - stock investment).






3. 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.






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






5. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.






6. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.






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






8. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.






9. The state in which the contract is accepted or delivered is the state that possesses regulatory jurisdiction over Group plan.






10. Qualified Annuity - Tax-deductible contributions & tax-deferred growth but fully taxable w/drawals.






11. Identical to Incontestable Clause in Life policy.






12. 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.






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






14. Federal law to protect Federal employees' (& their beneficiaries') pension - group insurance - & welfare benefits.






15. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.






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






17. Fraternal - non-profit - members only; Reciprocal - unincorp'd org. - members insure each other; Lloyd's Assoc. - groups sharing risks; Surplus lines - special market risks.






18. Allows for use of HMO/PPO or other private carrier to provide expanded benefits @ additional premium & if enrolled in BOTH Parts A & B.






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






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






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






22. Death benefit determined by Insured's projected lost earnings potential.






23. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.






24. Price of insurance per exposure unit.






25. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.






26. 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.






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






28. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.






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






30. Non-qualified Annuity - Non-deductible contributions & tax-deferred growth. At pay-out - tax-free principal but taxable growth.






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






32. Coverage remains in effect for 31 days past premium due date; benefits paid during grace period would be deducted from sum.






33. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.






34. Facultative - case by case agreements; Automatic/Treaty - automatic acceptance of risk percentage per previous agreement.






35. 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.






36. Compensates business for loss due to disability of key employee; premiums not deductible but benefits tax-free.






37. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.






38. 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.






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






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






43. Process whereby a reinsurer reinsures w/ another reinsurer.






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






45. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).






46. Excludes coverage for specific injury/illness either temporarily or permanently in order to eliminate pre-existing condition.






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






48. Mandatory 100% employer-funded coverage for injuries/illnesses occurring "on" job; full-time employees only; exclusive remedy. Provides: 1: unlimited medical benefit; 2: survivor income replacement & funeral ($5 -000 max.); 3: disability benefit @ 66






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






50. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.