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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. Savings account for medical expenses; Tax-deductible contributions; tax-deferred growth; tax-free for qualified use; taxable for non-qualified use.
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Policy loans
Phases of an annuity
Medical Savings Account (MSA) & Health Savings Account (HSA)
2. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.
Relation of Earnings to Insurance provision
Elements to contract
Approval Type Conditional receipt
Reinsurance
3. 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.
Common Disaster (Simultaneous Death Act) clause/provision
Entire Contract provision
Term Life policy
Preferred Provider Organization (PPO)
4. Potential circumstance that could cause a loss; measured in dollars.
Loss exposure
Blue Cross/Blue Shield
Family Maintenance policy
Key Employee Disability policy
5. Receipt whereby coverage incepts ONLY after underwriting approval.
Key Employee policy
Small Employer Medical Expense plan
Approval Type Conditional receipt
Family Income policy
6. Disability policy rider covering "the inability to perform some - but not all of your duties"; pays max. 50% of disability benefit for up to 6 mths.
Partial disability rider
Needs approach (most common)
Business Overhead Expense (BOE) Disability policy
Applicant Representations vs. Warranties
7. 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.
Dividends
Exclusions for Major Medical plan
Equity Indexed annuity
Human Life Value approach
8. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.
Proof of Loss provision
Point of Service plan
Underwriting risk categories
Annuity Classifications (5 of 5): # of lives
9. 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.
COBRA Time Limitations
Workers' Compensation insurance
Retrocession
Waiver of Premium provision
10. Earned premium is $ paid for coverage to date. Unearned premium is $ paid & returnable due to coverage not provided.
Earned vs. Unearned premium
Types of Insurers (miscellaneous)
Key Employee Disability policy
Insurable interest
11. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Loss of Earnings Test
Permanent vs. Temporary disability
Current Assumption (aka Interest-Sensitive) Whole Life policy
Key Employee policy
12. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.
Mortality vs. Morbidity tables
Grace Period provision
Medicare Supplement or Medigap policy
Dread Disease policy
13. Conditional - coverage is conditional; Personal - parties are people; Good faith - honesty/integrity; Fiduciary - req's financial trust.
Return of Premium rider
Insurance contract characteristics (2 of 2)
Types of hazards
Health Insurance Portability and Accountability Act (HIPAA)
14. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.
Family policy
Incontestability clause/provision
Factors that determine premium
Accidental Death & Dismemberment (AD&D) Life policy
15. Provides coverage for specific disease(s) - such as cancer or leukemia.
Dread Disease policy
Blue Cross/Blue Shield
Loss of Earnings Test
Exclusions to Work. Comp.
16. Federally-funded but state-run program for truly indigent individuals & families providing medical care at Federal clinic.
Medicaid/Medi-Cal
Experience vs. Community rating in Group Health plan
Return of Cash Value rider
Social Security Benefit (Supplement) rider
17. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.
Graded Premium Whole Life policy
Policy delivery
Elimination (aka Waiting) period
Key Employee policy
18. Covers disabilities occurring ONLY "off" job; benefits do not overlap work. comp. (i.e. Group plan).
Employee Retirement Income Security Act (ERISA)
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Proof of Loss provision
Non-Occupational Disability policy
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.
Family policy
CA Work. Comp. Statutes
Rate (as defined by CIC)
COBRA Time Limitations
20. Fraternal - non-profit - members only; Reciprocal - unincorp'd org. - members insure each other; Lloyd's Assoc. - groups sharing risks; Surplus lines - special market risks.
Types of Insurers (miscellaneous)
Levels of Long Term Care provided
Types of Insurers (by ownership)
Residual disability rider
21. Benefits automatically increase annually based on inflationary index (i.e. Consumer Price Index) OR flat rate (5% max.).
Dividends
Cost of Living Adjustment (COLA) Disability rider
AIDS/HIV discrimination
IRS Penalties for Annuities
22. No-charge annuity w/drawals allowed up to 10% of total - THEN penalized on sliding scale based on # policy yrs.; conditionally waived.
Medicare Part A & B "Gaps"
Reinstatement provision
Trusts
Annuity surrender charges
23. Insurance purchased by other Insurer(s) to spread or diversify risk; promotes industry stability.
Relation of Earnings to Insurance provision
Types of Insurers (by domicile)
Reinsurance
Notice of Claim provision
24. Prepaid med. benefits for members ONLY w/ approved primary care M.D. (HMO employee); focus on preventative care; low co-pay.
Revocable vs. Irrevocable beneficiary
Waiver of Premium provision
Approval Type Conditional receipt
Health Maintenance Organization (HMO)
25. Agreement - Offer & acceptance; Consideration - application + premium; Legal capacity - licensed &/or competent; Legal purpose - public good.
Types of Term Life policies
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Tax implications of an Annuity (1 of 2)
Elements to contract
26. Unintentional - up to $1 -000 + legal $; Intentional - $1 -000-5 -000 + legal $; If harmful - misdemeanor + up to 1 yr. prison + up to $10 -000.
Types of hazards
Split Dollar Plan
Penalties for violating AIDS/HIV privacy laws
Types of reinsurance
27. Private sector (Commercial) - provides LA&H - P&C - & LTC; Public sector (Gov't) - provides flood - work. comp. - Medicare/Medicaid - Group Life (SGLI/FEGLI).
Types of Insurers (by sector)
Medicare Part D
Cross Purchase Plan
Family Income policy
28. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.
Juvenile Life (aka Jumping Juvenile) policy
Insurance contract characteristics (1 of 2)
Non-Occupational Disability policy
Medicare Part C (aka Medicare Advantage)
29. The state in which the contract is accepted or delivered is the state that possesses regulatory jurisdiction over Group plan.
Legal Action provision
Binding receipt (aka Temporary Insurance Agreement)
Doctrine of Comity
Annuity Classifications (1 of 5): How premium is paid
30. Intentional OR unintentional failure to disclose material underwriting facts that should have been disclosed; grounds for policy rescission.
AIDS/HIV discrimination
Earned vs. Unearned premium
Concealment
Return of Premium rider
31. Agents - represent Insurer; Brokers - represent themselves & Insured; Solicitors - represent one agent to solicit leads.
Fraud
Dread Disease policy
Types of Licensed Producers
Transplant/Cosmetic Surgery rider
32. Temp. coverage for set duration w/ death benefit ONLY (no cash value) - offers largest $ for lowest premium; renewable; convertible.
Cash value
Dental Plan
Levels of Long Term Care provided
Term Life policy
33. Policy provisions must conform to state regulations where policy is sold.
Tax implications of an Estate
Types of Term Life policies
Conformity with State Statute provision
Notice of Claim provision
34. A&H - A&S - Sickness only; Medical; Disability; Accident only; Travel accident; LTC; Medicare supplement; AD&D; Dental/Vision/Prescription; Limited.
Return of Premium rider
Types of Accident & Health insurance
Dividends
Policy loans
35. PURELY employer-funded account to reimburse employees for qualified medical expenses not covered by group health plan.
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Adjustable Whole Life policy
Health Reimbursement Account (HRA)
Phases of an annuity
36. Premiums determined by target cash values or death benefit; partial cash value w/drawals allowed; transparent policy w/ unbundled premium.
Types of Insurers (by sector)
Flexible Spending Account (FSA)
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Impairment (Exclusion) rider
37. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)
Whole (aka Permanent or Straight) Life policy
Annuity Classifications (1 of 5): How premium is paid
Medicare Part A & B "Gaps"
Types of Accident & Health insurance
38. Process whereby a reinsurer reinsures w/ another reinsurer.
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Retrocession
Small Employer Medical Expense plan
Return of Premium rider
39. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).
Annuity Classifications (1 of 5): How premium is paid
Common Disability Exclusions
Graded Premium Whole Life policy
Credit Life policy
40. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.
Revocable vs. Irrevocable beneficiary
Accidental Death & Dismemberment (AD&D) Disability rider
Employee Retirement Income Security Act (ERISA)
Insurable interest
41. 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...
Loss exposure
Phases of an annuity
24 Hour Coverage (CA)
42. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.
Applicant Representations vs. Warranties
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Credit Life policy
Indemnify
43. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.
Impairment (Exclusion) rider
Whole (aka Permanent or Straight) Life policy
Revocable vs. Irrevocable beneficiary
Earned vs. Unearned premium
44. Identical to Incontestable Clause in Life policy.
Variable Life policy (1 of 2)
Time Limit on Certain Defenses provision
Relation of Earnings to Insurance provision
Cash value
45. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.
Family policy
Concealment
Total disability (as commonly defined)
Palliative vs. Curative care
46. Guaranteed min. interest rate on cash value buildup but possible higher rate if short-term investment returns higher than expected.
Key Employee Disability policy
Tax implications of an Annuity (1 of 2)
Cash value
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
47. Same as Term Life but provides living benefit (endowment) to policy owner if Insured survives entire term.
Elimination (aka Waiting) period
Change of Occupation provision
Endowment Life policy
Experience vs. Community rating in Group Health plan
48. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.
Valid life insurance contracts must identify...
Change of Occupation provision
Types of Agency Authority
Risk management
49. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.
Annuity Classifications (2 of 5): When benefits begin
Market Value Adjusted (aka Modified Guaranteed) annuity
Free Look provision
Beneficiary provisions
50. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.
Approval Type Conditional receipt
Tax implications of Death Benefit & Cash Value
Types of Medical Plans
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider