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. Policy must be delivered w/ original (or copy of same) application attached.






2. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.






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






4. Intentional deception; grounds for rescission.






5. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.






6. Identical to Incontestable Clause in Life policy.






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






8. Dividends are NOT taxable but interest is. Loan interest is NOT tax-deductible. Interest paid by Insurer on retained funds is taxable.






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






10. Allows for Term policy renewal @ higher premium w/out medical exam; guarantees insurability; based on actual/attained age.






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






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






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






15. Tendency of poorer risks to seek insurance.






16. Receipt whereby coverage incepts conditionally upon submission of full consideration and that all underwriting reqs. are met.






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






18. Provides professional services - rehabilitation - training/re-training & related costs to assist Insured in returning to work.






19. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.






20. 4: Funds retained by Insurer until w/drawn - interest ONLY paid monthly (taxable); 5: Paid-up immediate annuity.






21. Benefits automatically increase annually based on inflationary index (i.e. Consumer Price Index) OR flat rate (5% max.).






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






23. War - 2 types; Suicide (1st 2 yrs.); Aviation (non-commercial); Hazardous hobbies; Criminal acts; Alcohol/Drug influenced.






24. 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.






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






26. No coverage for injuries while: 1: @ voluntary social event; 2: self-inflicted (intentional); 3: under alcohol/drug influence; 4: committing criminal act; 5: aggressor in workplace fight; 6: participating in athletic event (non-pro. athletes) 7: par






27. Waives premium on Life policy for minor child until age 21 in event premium payor dies or becomes disabled.

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28. Receipt whereby coverage incepts ONLY after underwriting approval.






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






30. Primary - if 2 or more - equally shared; Contingent (Secondary) - only if primary dead; Tertiary - only if both primary & secondary dead. If none listed - goes to estate.






31. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.






32. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.






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






34. Physical - slippery floor; Moral - dishonest acts; Morale - carelessness or recklessness.






35. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.






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






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






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






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






40. Provides medical & personal services for people needing extended assistance w/ Activities of Daily Living (ADL). Other benefits include: assisted living care; respite care; hospice care; adult day care.






41. 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.






42. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).






43. Level - fixed death benefit - premium fixed until renewal; Decreasing - death benefit decreases over term - premium fixed until renewal; Increasing - death benefit increases over term - premium fixed until renewal.






44. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.






45. 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.






46. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.






47. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.






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






49. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.






50. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.







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