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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. Permanent - not recoverable (spinal cord injury); Temporary - recoverable (temp. illness/injury - broken limb).
Revocable vs. Irrevocable beneficiary
Permanent vs. Temporary disability
Medicare Part D
Peril vs. Hazard
2. 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.
Tax implications of Disability policy
Non-forfeiture options for WL policy
Dread Disease policy
Current Assumption (aka Interest-Sensitive) Whole Life policy
3. Expands individual WL policy to include Term Life for dependents (spouse - children - etc.).
Tax implications of Death Benefit & Cash Value
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Family or Dependents rider
Grace Period provision
4. 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.
COBRA Time Limitations
Cost of Living Adjustment (COLA) Disability rider
Workers' Compensation insurance
Common Accident provision
5. Same as Universal Life but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Types of Medical Plans
Variable Universal Life policy
Dividends
Age Discrimination in Employment Act (ADEA)
6. Info already known; Info that should have been known; Waived info; Irrelevant info.
Partial disability rider
1035 Exchange
Concealment exceptions
Types of Insurers (miscellaneous)
7. 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.
Annuity Classifications (3 of 5): Source of income
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Dividends
Waiver of Premium provision
8. Federally-sponsored health care for individuals 65+ &/or w/ certain disabilities; may run concurrent w/ group plan but group plan would act primary - THEN Medicare.
Endowment Life policy
Renewability provision
Entire Contract provision
Medicare
9. Provides professional services - rehabilitation - training/re-training & related costs to assist Insured in returning to work.
Cost of Living Adjustment (COLA) Disability rider
Insurable interest
Rehabilitation rider
Insurance contract characteristics (2 of 2)
10. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.
Notice of Claim provision
Incontestability clause/provision
24 Hour Coverage (CA)
CA Work. Comp. Statutes
11. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.
Workers' Compensation insurance
Medicare Part D
Approval Type Conditional receipt
Business Continuation (aka Buy-Sell) Disability policy
12. Agents - represent Insurer; Brokers - represent themselves & Insured; Solicitors - represent one agent to solicit leads.
Blackout Period
Types of Licensed Producers
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Total disability (as commonly defined)
13. 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.
Beneficiary provisions
Blue Cross/Blue Shield
Departments of an Insurer
Viatical Settlement Provider (VSP)
14. Provides disability income during surgery recovery from life-threatening condition (& sometimes cosmetic surgery).
Civil Rights/Pregnancy Discrimination Act
Grace Period provision
Transplant/Cosmetic Surgery rider
Residual disability rider
15. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.
Health Maintenance Organization (HMO)
Entire Contract provision
Rescission
Transplant/Cosmetic Surgery rider
16. Dependent children are covered until 19 or 23 (full-time student only) or until self-sufficient (if handicapped).
Health Insurance Portability and Accountability Act (HIPAA)
Types of Insurers (by sector)
Types of Agency Authority
Dependent coverage
17. Insurance purchased by other Insurer(s) to spread or diversify risk; promotes industry stability.
Reinsurance
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
CA Work. Comp. Statutes
Tax implications of an Estate
18. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.
Adjustable Whole Life policy
Point of Service plan
Juvenile Life (aka Jumping Juvenile) policy
Types of Licensed Producers
19. Same as WL but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Variable Life policy (1 of 2)
Juvenile Life (aka Jumping Juvenile) policy
Business Continuation (aka Buy-Sell) Disability policy
Underwriting risk categories
20. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.
Family Income policy
IRS Penalties for Annuities
Automatic Premium Loan (APL) provision
Health Insurance Portability and Accountability Act (HIPAA)
21. Earned premium is $ paid for coverage to date. Unearned premium is $ paid & returnable due to coverage not provided.
Types of Insurers (by ownership)
Earned vs. Unearned premium
Beneficiary provisions
Partial disability rider
22. Same as WL but w/ Level Term rider; upon death - pays monthly income for FULL term AFTER which pays full death benefit.
Family Maintenance policy
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
1035 Exchange
Common Life Exclusions
23. Type of partial disability rider - which pays fluctuating % of lost income w/out time limit.
Time Limit on Certain Defenses provision
Residual disability rider
1035 Exchange
Key Employee policy
24. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.
Annuity Classifications (2 of 5): When benefits begin
Medi-Cal Share Cost plan
Cross Purchase Plan
Parole Pardon Rule
25. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.
Penalties for violating AIDS/HIV privacy laws
Medicare Supplement or Medigap policy
Group Disability plan
Employer Liability
26. Receipt whereby coverage incepts ONLY after underwriting approval.
Family policy
Medicare Part C (aka Medicare Advantage)
Term Life policy
Approval Type Conditional receipt
27. Covers disabilities occurring ONLY "off" job; benefits do not overlap work. comp. (i.e. Group plan).
Human Life Value approach
Retrocession
Non-Occupational Disability policy
Annuity surrender charges
28. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.
Law of Large Numbers
Preferred Provider Organization (PPO)
Automatic Premium Loan (APL) provision
Partial disability rider
29. 4: Funds retained by Insurer until w/drawn - interest ONLY paid monthly (taxable); 5: Paid-up immediate annuity.
Legal Action provision
Settlement options for Life policy (2 of 2)
Insurance contract characteristics (2 of 2)
Guaranteed Insurability Life rider
30. Provides hospital insurance automatically @ age 65 (if FICA qualified) @ no fee but may have deductible & co-pay.
Family policy
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Medicare Part A (aka Hospital Insurance or HI)
Long Term Care (LTC) policy
31. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.
Types of Agency Authority
Guaranteed Insurability Life rider
Departments of an Insurer
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
32. Provides benefit during Social Security "black-out" period - up to 1 yr.
Impairment (Exclusion) rider
Insurance contract characteristics (1 of 2)
Annuity Classifications (2 of 5): When benefits begin
Social Security Benefit (Supplement) rider
33. Same as WL but premium low for 1st 5 yrs. - THEN has annual premium increases for set # yrs. - THEN level premium.
Common Life Exclusions
Return of Premium rider
Types of Insurers (by sector)
Graded Premium Whole Life policy
34. Peril is the CAUSE of loss. Hazard is a condition that increases LIKELIHOOD of loss.
Modified Endowment Contract (MEC)
Peril vs. Hazard
Non-forfeiture options for WL policy
Trial Application (aka Request for Offer)
35. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.
Business Continuation (aka Buy-Sell) policy
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Annuity Classifications (3 of 5): Source of income
Graded Premium Whole Life policy
36. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.
Trusts
Binding receipt (aka Temporary Insurance Agreement)
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Age Discrimination in Employment Act (ADEA)
37. A lapsed policy may be reinstated if not longer than 3-5 yrs. - & proof of insurability re-established - & back premiums + interest paid.
Annuity Classifications (3 of 5): Source of income
Payment of Premium provision
Reinstatement provision
24 Hour Coverage (CA)
38. Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling - stock investment).
Pure risk vs. Speculative risk
Legal Action provision
Variable Universal Life policy
Relation of Earnings to Insurance provision
39. 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.
Flexible Spending Account (FSA)
Legal Action provision
Preferred Provider Organization (PPO)
Types of Term Life policies
40. Coverage for catastrophic loss w/ high limits - front end deductible; co-insurance (80/20%); blanket coverage; stop loss max.
Major Medical plan
Impairment (Exclusion) rider
Insurable interest
Incontestability clause/provision
41. Upon death - death benefit is paid + the aggregate of cash value accumulated to date; add-on to WL policy ONLY.
Return of Cash Value rider
Tax implications of Dividends - Loans & Interest
Point of Service plan
Human Life Value approach
42. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.
Payment of Premium provision
Single Pay Whole Life policy
Guaranteed Insurability Life rider
Modified Endowment Contract (MEC)
43. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.
Relation of Earnings to Insurance provision
Survivorship (aka "Last to die") policy
Viatical Settlement Provider (VSP)
Limited Pay Whole Life policy
44. Covers disabilities occurring both "on" AND "off" job; "on" job benefits paid in addition to work. comp. - if applicable (i.e. individual plan).
Occupational Disability policy
Medicare Part A & B "Gaps"
Partial disability rider
Family or Dependents rider
45. Provides 24 hr. health coverage both "on" & "off" job - but may cause coverage duplication & coordination challenges.
Types of reinsurance
24 Hour Coverage (CA)
Time Limit on Certain Defenses provision
Family policy
46. Tendency of poorer risks to seek insurance.
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Policy loans
Adverse selection
Rescission
47. Physical - slippery floor; Moral - dishonest acts; Morale - carelessness or recklessness.
Types of hazards
Return of Premium rider
Adverse selection
Presumptive disability
48. Savings account for medical expenses; Tax-deductible contributions; tax-deferred growth; tax-free for qualified use; taxable for non-qualified use.
Medical Savings Account (MSA) & Health Savings Account (HSA)
Suicide clause/provision
Key Employee Disability policy
Reinsurance
49. Fixed premium w/ guaranteed min. death benefit that may increase due to higher than expected investment returns.
Trusts
Variable Life policy (2 of 2)
Errors & Omissions (E&O)
Current Assumption (aka Interest-Sensitive) Whole Life policy
50. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.
Claim Form (aka Proof of Loss Form) provision
Dependent coverage
Payment of Premium provision
Flexible Spending Account (FSA)