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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. Excludes coverage for specific injury/illness either temporarily or permanently in order to eliminate pre-existing condition.






2. Potential circumstance that could cause a loss; measured in dollars.






3. 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.






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






5. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.






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






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






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






9. Domestic - within home state; Foreign - outside home state; Alien - outside home country.






10. 'The inability to perform ANY reasonable occupation based on education - training or experience'.






11. 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.






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






13. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.






14. 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.






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






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






17. Receipt whereby coverage incepts ONLY after underwriting approval.






18. Savings account for medical expenses; Tax-deductible contributions; tax-deferred growth; tax-free for qualified use; taxable for non-qualified use.






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






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






21. 4: Funds retained by Insurer until w/drawn - interest ONLY paid monthly (taxable); 5: Paid-up immediate annuity.






22. Fraternal - non-profit - members only; Reciprocal - unincorp'd org. - members insure each other; Lloyd's Assoc. - groups sharing risks; Surplus lines - special market risks.






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






24. Coverage for catastrophic loss w/ high limits - front end deductible; co-insurance (80/20%); blanket coverage; stop loss max.






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






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






27. Agents - represent Insurer; Brokers - represent themselves & Insured; Solicitors - represent one agent to solicit leads.






28. Conditional - coverage is conditional; Personal - parties are people; Good faith - honesty/integrity; Fiduciary - req's financial trust.






29. Prepaid med. benefits for members ONLY w/ approved primary care M.D. (HMO employee); focus on preventative care; low co-pay.






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






31. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.






32. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.






33. Identical to Incontestable Clause in Life policy.






34. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").






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






36. Price of insurance per exposure unit.






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






38. 'The inability to perform your OWN normal occupation or daily duties'.






39. 1: Tax-free lump sum; 2: Monthly pay-outs for fixed time; 3: Fixed monthly payments until depleted.






40. Combination of Basic Medical & Major Medical in one policy; Basic pays 1st - then Major Medical w/ corridor deductible.






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






42. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.






43. Federal law allows employees/their dependents to continue group benefits w/in 60 days after termination (if employer has 20+ employees); Insured pays premium @ 102% of group cost.






44. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.






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






46. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).






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






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






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






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







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