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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. 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.
Trial Application (aka Request for Offer)
Settlement options for Life policy (1 of 2)
Insurable interest
COBRA Time Limitations
2. Req. by CA statute & may provide workers coverage for action-over claims.
Small Employer Medical Expense plan
Blue Cross/Blue Shield
Employer Liability
Trial Application (aka Request for Offer)
3. Provides % of monthly income benefit if Insured becomes disabled due to illness or accident.
Disability Income policy
Entire Contract provision
Relation of Earnings to Insurance provision
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
4. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.
Types of Accident & Health (A&H) providers
Types of Accident & Health insurance
Insurer (as defined by CIC)
Change of Occupation provision
5. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.
Trial Application (aka Request for Offer)
Automatic Premium Loan (APL) provision
Cost of Living Adjustment (COLA) Disability rider
Payor (aka Waiver of Payor's Premium) rider
6. 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.
Small Employer Medical Expense plan
Renewability provision
Loss of Earnings Test
Concealment
7. Same as WL but cash value increases @ current interest rates (not set); premium can start low or high & may change.
Disability Income policy
Medi-Cal Share Cost plan
Tax implications of medical plans
Current Assumption (aka Interest-Sensitive) Whole Life policy
8. Beneficiary has right to leave death benefits / Insurer to protect $ from creditors; interest (taxable) paid on retained funds.
Insurer (as defined by CIC)
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Spendthrift provision
Revocable vs. Irrevocable beneficiary
9. Prepaid med. benefits for "subscribers" @ approved facilities; many non-profit; Blue Cross - Hospital stays; Blue Shield - M.D. costs.
Point of Service plan
Blue Cross/Blue Shield
Types of Accident & Health insurance
Business Overhead Expense (BOE) Disability policy
10. 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
Tax implications of an Annuity (1 of 2)
Endowment Life policy
Modified Endowment Contract (MEC)
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
11. Type of partial disability rider - which pays fluctuating % of lost income w/out time limit.
Payment of Premium provision
Medicare Part A (aka Hospital Insurance or HI)
Residual disability rider
Tax implications of Disability policy
12. The state in which the contract is accepted or delivered is the state that possesses regulatory jurisdiction over Group plan.
Key Employee Disability policy
Common Disability Exclusions
Doctrine of Comity
Occupational Disability policy
13. War; elective cosmetic surgery; routine dental; work. comp.-covered claims; self-inflicted (intentional); gov't. facility treatment; LTC; private nursing.
Waiver of Premium (Waiver of Cost of Insurance) rider
Survivorship (aka "Last to die") policy
Exclusions for Major Medical plan
Modified Premium Whole Life policy
14. 'The inability to perform ANY gainful occupation'.
Business Continuation (aka Buy-Sell) policy
7 Pay Test
Total disability (any-occupational definition)
Types of Insurers (by ownership)
15. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).
Common Accident provision
Dependent coverage
Loss of Earnings Test
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
16. Available for any reason up to full cash value @ fixed (max 8%) OR variable interest rate; loan $ + interest deducted from benefit @ death.
Policy loans
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Exclusions for Major Medical plan
Single Pay Whole Life policy
17. A lapsed policy may be reinstated if not longer than 3-5 yrs. - & proof of insurability re-established - & back premiums + interest paid.
Adjustable Whole Life policy
Key Employee Disability policy
Small Employer Medical Expense plan
Reinstatement provision
18. Policy provisions must conform to state regulations where policy is sold.
Rate (as defined by CIC)
Phases of an annuity
Insurability Type Conditional receipt
Conformity with State Statute provision
19. Covers disabilities occurring both "on" AND "off" job; "on" job benefits paid in addition to work. comp. - if applicable (i.e. individual plan).
Cost of Living Adjustment (COLA) Life rider
Occupational Disability policy
Joint Life (aka "First to die") policy
Business Continuation (aka Buy-Sell) Disability policy
20. Premiums determined by target cash values or death benefit; partial cash value w/drawals allowed; transparent policy w/ unbundled premium.
Blue Cross/Blue Shield
Plans A-L of Medical Supplement or Medigap
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Occupational Disability policy
21. Basic Medical; Major Medical; Comprehensive Major Medical
Claim Form (aka Proof of Loss Form) provision
Types of Medical Plans
Payor (aka Waiver of Payor's Premium) rider
Joint Life (aka "First to die") policy
22. Prepaid med. benefits for members ONLY w/ approved primary care M.D. (HMO employee); focus on preventative care; low co-pay.
Peril vs. Hazard
Medicare Part C (aka Medicare Advantage)
Health Maintenance Organization (HMO)
Family Income policy
23. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.
Underwriting risk categories
Guaranteed Insurability Life rider
Common Accident provision
Risk management
24. Qualified Annuity - Tax-deductible contributions & tax-deferred growth but fully taxable w/drawals.
Types of Insurers (by sector)
Insurance contract characteristics (1 of 2)
Tax implications of an Annuity (1 of 2)
Law of Large Numbers
25. Death benefit determined by Insured's financial goals & needs (minus assets).
Key Employee policy
Needs approach (most common)
Non-Occupational Disability policy
Automatic Premium Loan (APL) provision
26. Life license + NASD (FINRA) Series 6 or 7.
Common Life Exclusions
Requirements to sell variable life products
Types of Accident & Health (A&H) providers
Workers' Compensation insurance
27. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.
Modified Endowment Contract (MEC)
Disability Income policy
Blackout Period
Variable Life policy (1 of 2)
28. Same as WL but w/ Decreasing Term rider; upon death - pays monthly income for REMAINING term AFTER which pays full death benefit.
Family Income policy
Concealment
Medicare Part C (aka Medicare Advantage)
Tax implications of an Estate
29. 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.
Types of Medical Plans
CA Work. Comp. Statutes
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Joint Life (aka "First to die") policy
30. War - 2 types; Suicide (1st 2 yrs.); Aviation (non-commercial); Hazardous hobbies; Criminal acts; Alcohol/Drug influenced.
Common Life Exclusions
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Reinsurance
Annuity surrender charges
31. Same as Term Life but provides living benefit (endowment) to policy owner if Insured survives entire term.
Endowment Life policy
Recurrent disability clause/provision
Joint Life (aka "First to die") policy
24 Hour Coverage (CA)
32. Provides disability income during surgery recovery from life-threatening condition (& sometimes cosmetic surgery).
Business Continuation (aka Buy-Sell) policy
Loss exposure
Total disability (any-occupational definition)
Transplant/Cosmetic Surgery rider
33. Upon death - death benefit is paid + the aggregate of cash value accumulated to date; add-on to WL policy ONLY.
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Law of Large Numbers
Spendthrift provision
Return of Cash Value rider
34. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.
Relation of Earnings to Insurance provision
Risk management
Applicant Representations vs. Warranties
Blackout Period
35. Federal law which prohibits companies w/ 15+ employees from decreasing coverage benefits for women affected by pregnancy or childbirth.
Business Continuation (aka Buy-Sell) policy
Joint Life (aka "First to die") policy
Premium modes
Civil Rights/Pregnancy Discrimination Act
36. Prohibited w/ regard to testing for people of same class; test results must remain confidential; coverage may be declined (once discovered).
AIDS/HIV discrimination
Family Income policy
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Loss exposure
37. 'The inability to perform ANY reasonable occupation based on education - training or experience'.
Dependent coverage
Total disability (more restrictive definition)
Cross Purchase Plan
Long Term Care (LTC) policy
38. 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.
Business Overhead Expense (BOE) Disability policy
Accidental Death & Dismemberment (AD&D) Disability rider
Underwriting risk categories
Equity Indexed annuity
39. Permanent - not recoverable (spinal cord injury); Temporary - recoverable (temp. illness/injury - broken limb).
Change of Occupation provision
Legal Action provision
Doctrine of Comity
Permanent vs. Temporary disability
40. Part A - Inpatient hospital deductibles vary on # of days; limited reserve days; finite benefit; 1st 3 pints blood; Part B - 20% co-payment.
Supplemental Major Medical plan
Medicare Part A & B "Gaps"
Medicare Part A (aka Hospital Insurance or HI)
Key Employee Disability policy
41. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.
Transplant/Cosmetic Surgery rider
Proof of Loss provision
Applicant Representations vs. Warranties
Departments of an Insurer
42. Allows policy owner to w/draw set % of death benefit upon verification of terminal illness w/ expectancy 12-24 mths.; generally tax-free.
Adverse selection
Elements to contract
Modified Endowment Contract (MEC)
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
43. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Non-forfeiture options for WL policy
Joint Life (aka "First to die") policy
Flexible Spending Account (FSA)
44. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.
IRS Penalties for Annuities
Annuity Classifications (5 of 5): # of lives
Annuity
Graded Premium Whole Life policy
45. Provides coverage for specific disease(s) - such as cancer or leukemia.
Basic Medical plan
Family or Dependents rider
Plans A-L of Medical Supplement or Medigap
Dread Disease policy
46. Conditional - coverage is conditional; Personal - parties are people; Good faith - honesty/integrity; Fiduciary - req's financial trust.
Waiver of Premium provision
Insurance contract characteristics (2 of 2)
Limited Pay Whole Life policy
Social Security Benefit (Supplement) rider
47. A company providing lump sum buyout (50-90% of total) of Life policy; becomes owner & beneficiary & assumes premium payments; usually terminally ill viator.
Types of reinsurance
Employee Retirement Income Security Act (ERISA)
Viatical Settlement Provider (VSP)
Types of Term Life policies
48. 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.
Grace Period provision
Waiver of Premium provision
Dread Disease policy
Workers' Compensation insurance
49. Covers entire family w/ WL for breadwinner & (convertible) Level Term for spouse & children (until certain age).
Levels of Long Term Care provided
Palliative vs. Curative care
7 Pay Test
Family policy
50. 4: Funds retained by Insurer until w/drawn - interest ONLY paid monthly (taxable); 5: Paid-up immediate annuity.
Medicare Part A & B "Gaps"
Proof of Loss provision
Spendthrift provision
Settlement options for Life policy (2 of 2)