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






2. No-charge annuity w/drawals allowed up to 10% of total - THEN penalized on sliding scale based on # policy yrs.; conditionally waived.






3. Compensates business for loss due to disability of key employee; premiums not deductible but benefits tax-free.






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






5. Provides 24 hr. health coverage both "on" & "off" job - but may cause coverage duplication & coordination challenges.






6. Federally-funded but state-run program for truly indigent individuals & families providing medical care at Federal clinic.






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






8. An unintentional mistake committed by an insurance representative; may be covered by E&O insurance.






9. Upon death - death benefit is paid + the aggregate of cash value accumulated to date; add-on to WL policy ONLY.






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






11. Monthly; Quarterly; Semi-annually; Annually (cheapest due to less admin cost).






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






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






14. Upon death - death benefit is paid + the aggregate of premiums paid to date; add-on to Term policy ONLY.






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






16. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.






17. 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.






18. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.






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






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






21. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.






22. Federal program financed by payroll taxes provided equally by both employer & employee OR entirely by individual (if self-employed). Provides benefits for: Medicare @ age 65+; retirement; $255 lump sum death benefit; (limited) disability; survivors;






23. Prohibited w/ regard to testing for people of same class; test results must remain confidential; coverage may be declined (once discovered).






24. Same as WL but w/ Decreasing Term rider; upon death - pays monthly income for REMAINING term AFTER which pays full death benefit.






25. 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.






26. Expands individual WL policy to include Term Life for dependents (spouse - children - etc.).






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






28. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.






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






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






31. Receipt whereby coverage incepts ONLY after underwriting approval.






32. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.






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






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






35. 'The inability to perform ANY gainful occupation'.






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






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






38. Covers disabilities occurring ONLY "off" job; benefits do not overlap work. comp. (i.e. Group plan).






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






40. 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.






41. Info already known; Info that should have been known; Waived info; Irrelevant info.






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






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






44. Provides supplemental coverage for physician/surgeon fees if enrolled (during enrollment period ONLY) & pay monthly premium w/ deductible and co-insurance.






45. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.






46. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.






47. Allows policy owner to w/draw set % of death benefit upon verification of terminal illness w/ expectancy 12-24 mths.; generally tax-free.






48. Disability policy rider covering "the inability to perform some - but not all of your duties"; pays max. 50% of disability benefit for up to 6 mths.






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






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