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. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.






2. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).






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






4. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.






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






6. Part A - Inpatient hospital deductibles vary on # of days; limited reserve days; finite benefit; 1st 3 pints blood; Part B - 20% co-payment.






7. Same as WL but premium low for 1st 5 yrs. - THEN has annual premium increases for set # yrs. - THEN level premium.






8. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.






9. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.






10. No deductible coverage for: daily room/board; ancillary costs; surgeon &/or physician expense (for added premium).






11. Group plan initially self-funded by employer (like SIR); after which - group plan Insurer covers (up to policy limit); requires TPA.






12. Policy owner must notify Insurer of loss either in writing - in person or by phone w/in 20 days.






13. An unintentional mistake committed by an insurance representative; may be covered by E&O insurance.






14. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)






15. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.






16. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.






17. 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.






18. 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.






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






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






21. Receipt whereby coverage incepts immediately upon submission of full consideration - unless declined & premium refunded.






22. 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.






23. Prepaid med. benefits for "subscribers" @ approved facilities; many non-profit; Blue Cross - Hospital stays; Blue Shield - M.D. costs.






24. 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.






25. Covers entire family w/ WL for breadwinner & (convertible) Level Term for spouse & children (until certain age).






26. Reappearance of disability w/in 6 mth. period after "recovery" from same disability is considered recurrence - not new disability.






27. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.






28. Mortality is the statistical possibility of death @ each age. Morbidity is the statistical possibility & extent of disability @ each age.






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






30. Life license + NASD (FINRA) Series 6 or 7.






31. 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.






32. 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.






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






34. Written policy terms supersede oral statements made prior to policy issue.






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






36. 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.






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






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






39. Covers disabilities occurring ONLY "off" job; benefits do not overlap work. comp. (i.e. Group plan).






40. Provides 24 hr. health coverage both "on" & "off" job - but may cause coverage duplication & coordination challenges.






41. Available for any reason up to full cash value @ fixed (max 8%) OR variable interest rate; loan $ + interest deducted from benefit @ death.






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






43. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.






44. 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.






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






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






47. Provides benefit during Social Security "black-out" period - up to 1 yr.






48. Dependent children are covered until 19 or 23 (full-time student only) or until self-sufficient (if handicapped).






49. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.






50. Same as WL but cash value increases @ current interest rates (not set); premium can start low or high & may change.