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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. Grows @ fixed min. interest rate but w/ possible higher rate tied to equity index (i.e S&P Equity Index) appreciation; gains shared w/ Insurer.
Types of Term Life policies
Equity Indexed annuity
Civil Rights/Pregnancy Discrimination Act
Tax implications of Disability policy
2. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.
Needs approach (most common)
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Transplant/Cosmetic Surgery rider
Experience vs. Community rating in Group Health plan
3. Federal law to protect Federal employees' (& their beneficiaries') pension - group insurance - & welfare benefits.
Civil Rights/Pregnancy Discrimination Act
Plans A-L of Medical Supplement or Medigap
Common Accident provision
Employee Retirement Income Security Act (ERISA)
4. 'The inability to perform ANY reasonable occupation based on education - training or experience'.
Total disability (more restrictive definition)
Waiver of Premium (Waiver of Cost of Insurance) rider
Medi-Cal Share Cost plan
Point of Service plan
5. Although death benefit is tax-free - it is included in gross estate value so federal &/or state taxes may apply to a portion in excess of fixed federal limit.
Rate (as defined by CIC)
Tax implications of an Estate
Types of Accident & Health (A&H) providers
Tax implications of Death Benefit & Cash Value
6. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.
Credit Life policy
Tax implications of an Estate
Business Continuation (aka Buy-Sell) policy
Adverse selection
7. 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.
Health Maintenance Organization (HMO)
Mortality vs. Morbidity tables
CA Work. Comp. Statutes
Family or Dependents rider
8. Expands individual WL policy to include Term Life for dependents (spouse - children - etc.).
Medical Savings Account (MSA) & Health Savings Account (HSA)
Business Continuation (aka Buy-Sell) Disability policy
Health Maintenance Organization (HMO)
Family or Dependents rider
9. Policy provisions must conform to state regulations where policy is sold.
Conformity with State Statute provision
Total disability (any-occupational definition)
Residual disability rider
Limited Pay Whole Life policy
10. Provides for continued operation of business if partner dies - by allowing surviving partner(s) to buy deceased partner's interest in business.
Blue Cross/Blue Shield
Palliative vs. Curative care
Dental Plan
Business Continuation (aka Buy-Sell) policy
11. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.
Cross Purchase Plan
Types of hazards
Workers' Compensation insurance
Residual disability rider
12. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Medicare Supplement or Medigap policy
Group Disability plan
Rate (as defined by CIC)
13. 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
Current Assumption (aka Interest-Sensitive) Whole Life policy
Grace Period provision
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Departments of an Insurer
14. Identical to Incontestable Clause in Life policy.
Fraud
Time Limit on Certain Defenses provision
Dividend options
Tax implications of an Annuity (1 of 2)
15. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.
Medicare Part C (aka Medicare Advantage)
Current Assumption (aka Interest-Sensitive) Whole Life policy
Medi-Cal Share Cost plan
Types of Medical Plans
16. Covers entire family w/ WL for breadwinner & (convertible) Level Term for spouse & children (until certain age).
Key Employee policy
Family policy
Health Insurance Portability and Accountability Act (HIPAA)
Notice of Claim provision
17. 1: Tax-free lump sum; 2: Monthly pay-outs for fixed time; 3: Fixed monthly payments until depleted.
Settlement options for Life policy (1 of 2)
Major Medical plan
Needs approach (most common)
Exclusions for Major Medical plan
18. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.
Medicare Supplement or Medigap policy
Entire Contract provision
Comprehensive Major Medical plan
Types of reinsurance
19. 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
Dental Plan
Annuity
Medical cost containment (aka Managed care)
20. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.
Risk management
Common Accident provision
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Modified Premium Whole Life policy
21. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.
Permanent vs. Temporary disability
Renewability provision
Annuity Classifications (2 of 5): When benefits begin
Factors that determine premium
22. War - 2 types; Suicide (1st 2 yrs.); Aviation (non-commercial); Hazardous hobbies; Criminal acts; Alcohol/Drug influenced.
Indemnify
AIDS/HIV discrimination
Common Life Exclusions
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
23. Provides benefit during Social Security "black-out" period - up to 1 yr.
Annuity Classifications (1 of 5): How premium is paid
Occupational Disability policy
Business Continuation (aka Buy-Sell) policy
Social Security Benefit (Supplement) rider
24. Coverage for catastrophic loss w/ high limits - front end deductible; co-insurance (80/20%); blanket coverage; stop loss max.
Insurance contract characteristics (1 of 2)
Return of Premium rider
Major Medical plan
Exclusions for Major Medical plan
25. Prepaid med. benefits for members w/ approved primary care M.D. (independent); low co-pay; non-PPO M.D. can be used at higher cost.
Palliative vs. Curative care
24 Hour Coverage (CA)
Pure risk vs. Speculative risk
Preferred Provider Organization (PPO)
26. Life license + NASD (FINRA) Series 6 or 7.
Dividends
Notice of Claim provision
Requirements to sell variable life products
Health Insurance Portability and Accountability Act (HIPAA)
27. Receipt whereby coverage incepts ONLY after underwriting approval.
Convertibility provision
Elimination (aka Waiting) period
Waiver of Premium provision
Approval Type Conditional receipt
28. 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.
Rehabilitation rider
Tax implications of medical plans
Policy delivery
Common Accident provision
29. Dividends are NOT taxable but interest is. Loan interest is NOT tax-deductible. Interest paid by Insurer on retained funds is taxable.
Common Life Exclusions
Common Disability Exclusions
Tax implications of Dividends - Loans & Interest
Notice of Claim provision
30. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.
Annuity
Estoppel
Types of Insurers (by authorization)
Dividends
31. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)
Rehabilitation rider
Basic Medical plan
Annuity Classifications (1 of 5): How premium is paid
Variable Life policy (2 of 2)
32. Combination of Basic Medical & Major Medical in one policy; Basic pays 1st - then Major Medical w/ corridor deductible.
Accidental Death & Dismemberment (AD&D) Life policy
Comprehensive Major Medical plan
Age Discrimination in Employment Act (ADEA)
Long Term Care (LTC) policy
33. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.
Mortality vs. Morbidity tables
Whole (aka Permanent or Straight) Life policy
Types of reinsurance
Common Disability Exclusions
34. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.
Rescission
Total disability (more restrictive definition)
Annuity Classifications (2 of 5): When benefits begin
Term Life policy
35. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.
Medicare
Proof of Loss provision
Joint Life (aka "First to die") policy
Basic Medical plan
36. Allows Term policy conversion to Permanent policy w/out medical exam; must be identical or lower death benefit; based on either attained OR original age.
Convertibility provision
Loss exposure
Age Discrimination in Employment Act (ADEA)
Viatical Settlement Provider (VSP)
37. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.
Trusts
Dividends
Palliative vs. Curative care
Trial Application (aka Request for Offer)
38. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.
Medicare Part D
Types of Insurers (by sector)
Tax implications of an Annuity (1 of 2)
Dental Plan
39. 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
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40. Peril is the CAUSE of loss. Hazard is a condition that increases LIKELIHOOD of loss.
Peril vs. Hazard
Common Disaster (Simultaneous Death Act) clause/provision
Modified Premium Whole Life policy
Cash value
41. 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.
Approval Type Conditional receipt
Partial disability rider
Health Insurance Portability and Accountability Act (HIPAA)
Medicare Part C (aka Medicare Advantage)
42. 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.
Annuity
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Dividends
Dividend options
43. Prepaid med. benefits for members ONLY w/ approved primary care M.D. (HMO employee); focus on preventative care; low co-pay.
Graded Premium Whole Life policy
Health Maintenance Organization (HMO)
Elements to contract
Cross Purchase Plan
44. Part A - Inpatient hospital deductibles vary on # of days; limited reserve days; finite benefit; 1st 3 pints blood; Part B - 20% co-payment.
Risk management
Medicare Part A & B "Gaps"
Free Look provision
Common Disability Exclusions
45. Same as WL but w/ Level Term rider; upon death - pays monthly income for FULL term AFTER which pays full death benefit.
Survivorship (aka "Last to die") policy
Adjustable Whole Life policy
Family Maintenance policy
Doctrine of Comity
46. PURELY employer-funded account to reimburse employees for qualified medical expenses not covered by group health plan.
Point of Service plan
Health Reimbursement Account (HRA)
Health Maintenance Organization (HMO)
Notice of Claim provision
47. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.
Medicare Part D
Common Accident provision
7 Pay Test
Single Pay Whole Life policy
48. Potential circumstance that could cause a loss; measured in dollars.
Residual disability rider
Loss exposure
Impairment (Exclusion) rider
Factors that determine premium
49. Same as WL but cash value increases @ current interest rates (not set); premium can start low or high & may change.
Types of Renewability provisions
Valid life insurance contracts must identify...
Current Assumption (aka Interest-Sensitive) Whole Life policy
Conformity with State Statute provision
50. If Insured changes to: more hazardous job - benefits reduced; less hazardous job - premiums reduce.
Change of Occupation provision
Flexible Spending Account (FSA)
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Medicaid/Medi-Cal