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. 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.






2. Provides disability income during surgery recovery from life-threatening condition (& sometimes cosmetic surgery).






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






4. Same as Comprehensive Major Medical but w/ integrated deductible; much more expensive.






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






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






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






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






9. Insurance purchased by other Insurer(s) to spread or diversify risk; promotes industry stability.






10. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.






11. Insured can seek legal action against Insurer for denial of claim only after 60 days and up to 3 yrs. after providing proof of loss.






12. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.






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






14. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.






15. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.






16. Provides coverage for specific disease(s) - such as cancer or leukemia.






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






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






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






20. Death benefit is NOT taxable. Cash value grows tax-deferred but cost basis (base premium) is not taxable - only interest is.






21. Type of partial disability rider - which pays fluctuating % of lost income w/out time limit.






22. Privately-provided or Medicare-provided (if no private carrier) prescription drug plans for qualified individuals but w/ premium - deductible & co-pay.






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






24. Peril is the CAUSE of loss. Hazard is a condition that increases LIKELIHOOD of loss.






25. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.






26. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.






27. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.






28. Provides hospital insurance automatically @ age 65 (if FICA qualified) @ no fee but may have deductible & co-pay.






29. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.






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






31. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.






32. 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.






33. Same as WL but premium low for set # yrs. - THEN premiums vary (+ or -) based on Insurer's investment returns - w/ Gmax.






34. Govt. organization providing health care benefits for dependents of military personnel.






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






36. Same as WL but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.






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






38. Identical to Incontestable Clause in Life policy.






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






40. Coverage remains in effect for 31 days past premium due date; benefits paid during grace period would be deducted from sum.






41. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.






42. Excludes coverage for suicide during 1st 2 yrs. ONLY but - if it does - all premiums must be returned to beneficiary.






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






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






45. Process which prevents claim denial as a result of false statement or promise (made by Insurer) - which was relied upon by Insured.






46. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.






47. Guaranteed min. interest rate on cash value buildup but possible higher rate if short-term investment returns higher than expected.






48. Treating or mitigating loss exposures through 1: avoidance; 2: retention (deductibles); 3: sharing; 4: reduction; or 5: transfer.






49. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.






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