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






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






3. 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.






4. Earned premium is $ paid for coverage to date. Unearned premium is $ paid & returnable due to coverage not provided.






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






6. Two death benefit options - Option A: death benefit ONLY; Option B: death benefit + cash value; death benefit NOT guaranteed.






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






8. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.






9. 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.






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






11. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).






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






13. 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.






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






15. Intentional deception; grounds for rescission.






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






17. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.






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






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






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






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






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






23. 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.






24. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.






25. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.






26. Insurance purchased by other Insurer(s) to spread or diversify risk; promotes industry stability.






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






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






29. 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.






30. Death benefit is NOT taxable. Cash value grows tax-deferred but cost basis (base premium) is not taxable - only interest is.






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. Provides disability income during surgery recovery from life-threatening condition (& sometimes cosmetic surgery).






33. 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






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






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






36. Info already known; Info that should have been known; Waived info; Irrelevant info.






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






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






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






40. 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).






41. Identical to Incontestable Clause in Life policy.






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






43. Federal law which prohibits companies w/ 15+ employees from decreasing coverage benefits for women affected by pregnancy or childbirth.






44. Process which prevents claim denial as a result of false statement or promise (made by Insurer) - which was relied upon by Insured.






45. Same as WL but w/ adjustable death benefit (& corresponding premium) & over-fund option but w/ annually renewable term (ART).






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






47. Privately-provided or Medicare-provided (if no private carrier) prescription drug plans for qualified individuals but w/ premium - deductible & co-pay.






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






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






50. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.