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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. Fraternal - non-profit - members only; Reciprocal - unincorp'd org. - members insure each other; Lloyd's Assoc. - groups sharing risks; Surplus lines - special market risks.
Joint Life (aka "First to die") policy
Types of Insurers (miscellaneous)
Cash value
Grace Period provision
2. Life license + NASD (FINRA) Series 6 or 7.
Requirements to sell variable life products
Point of Service plan
Penalties for violating AIDS/HIV privacy laws
Human Life Value approach
3. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Dependent coverage
Types of Insurers (by ownership)
Types of Accident & Health (A&H) providers
Group Disability plan
4. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.
Palliative vs. Curative care
Payment of Premium provision
Limited Pay Whole Life policy
Change of Occupation provision
5. Process whereby a reinsurer reinsures w/ another reinsurer.
IRS Penalties for Annuities
Retrocession
Adverse selection
Waiver of Premium (Waiver of Cost of Insurance) rider
6. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.
Tax implications of medical plans
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Preferred Provider Organization (PPO)
Loss of Earnings Test
7. Although death benefit is tax-free - it is included in gross estate value so federal &/or state taxes may apply to a portion in excess of fixed federal limit.
Annuity Classifications (5 of 5): # of lives
Tax implications of an Estate
Types of Insurers (by domicile)
Variable Universal Life policy
8. 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.
Equity Indexed annuity
Palliative vs. Curative care
Proof of Loss provision
Limited Pay Whole Life policy
9. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.
Insurer (as defined by CIC)
Levels of Long Term Care provided
Point of Service plan
Free Look provision
10. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Annuity
Tax implications of an Annuity (1 of 2)
Comprehensive Major Medical plan
11. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.
Exclusions to Work. Comp.
Insurer (as defined by CIC)
Modified Premium Whole Life policy
Concealment
12. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)
Dental Plan
Market Value Adjusted (aka Modified Guaranteed) annuity
Annuity Classifications (1 of 5): How premium is paid
Annuity
13. Period of time following any children's survivor benefit & before benefits are provided to employee's widow/widower.
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Types of Agency Authority
Impairment (Exclusion) rider
Blackout Period
14. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.
Types of Insurers (by domicile)
Modified Premium Whole Life policy
Earned vs. Unearned premium
Reinstatement provision
15. 1: Tax-free lump sum; 2: Monthly pay-outs for fixed time; 3: Fixed monthly payments until depleted.
Settlement options for Life policy (1 of 2)
Tax implications of an Annuity (1 of 2)
Insuring clause/provision (aka Insuring Agreement)
Credit Life policy
16. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).
Non-forfeiture options for WL policy
Types of Insurers (by sector)
Indemnify
Insurable interest
17. Price of insurance per exposure unit.
Tax implications of medical plans
Types of Insurers (by domicile)
Rate (as defined by CIC)
Trusts
18. Private sector (Commercial) - provides LA&H - P&C - & LTC; Public sector (Gov't) - provides flood - work. comp. - Medicare/Medicaid - Group Life (SGLI/FEGLI).
Term Life policy
Types of Accident & Health (A&H) providers
Types of Insurers (by sector)
Non-Occupational Disability policy
19. Policy must be delivered w/ original (or copy of same) application attached.
Conformity with State Statute provision
Single Pay Whole Life policy
Entire Contract provision
Accidental Death (aka Multiple Indemnity) rider
20. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.
AIDS/HIV discrimination
Plans A-L of Medical Supplement or Medigap
Claim Form (aka Proof of Loss Form) provision
Accidental Death (aka Multiple Indemnity) rider
21. Upon death - death benefit is paid + the aggregate of cash value accumulated to date; add-on to WL policy ONLY.
Major Medical plan
Types of hazards
Return of Cash Value rider
Peril vs. Hazard
22. Allows Insured to increase death benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age.
Guaranteed Insurability Life rider
Residual disability rider
Errors & Omissions (E&O)
Flexible Spending Account (FSA)
23. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.
Equity Indexed annuity
Types of Renewability provisions
Elimination (aka Waiting) period
Proof of Loss provision
24. Covers entire family w/ WL for breadwinner & (convertible) Level Term for spouse & children (until certain age).
Family or Dependents rider
Dependent coverage
Family policy
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
25. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.
Accidental Death & Dismemberment (AD&D) Disability rider
Employer Liability
Key Employee policy
Departments of an Insurer
26. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.
COBRA Time Limitations
Medicare Supplement or Medigap policy
Change of Occupation provision
Suicide clause/provision
27. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.
Tax implications of an Estate
Modified Endowment Contract (MEC)
Variable Life policy (1 of 2)
Adjustable Whole Life policy
28. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.
Equity Indexed annuity
Flexible Spending Account (FSA)
Renewability provision
Free Look provision
29. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.
Annuity
Revocable vs. Irrevocable beneficiary
Types of Insurers (miscellaneous)
Non-Occupational Disability policy
30. Grows @ fixed interest rate for set term but cash value may adjust to prevailing rate (+ or -) if fully surrendered before term ends; % w/drawal ok.
Comprehensive Major Medical plan
Market Value Adjusted (aka Modified Guaranteed) annuity
Employee Retirement Income Security Act (ERISA)
Claim Form (aka Proof of Loss Form) provision
31. Receipt whereby coverage incepts immediately upon submission of full consideration - unless declined & premium refunded.
Binding receipt (aka Temporary Insurance Agreement)
Dividends
Dependent coverage
Key Employee Disability policy
32. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.
Parole Pardon Rule
Single Pay Whole Life policy
Primary Insurance Amount (PIA)
Indeterminate Premium Whole Life policy
33. 1: Cash (tax-free); 2: Apply to future premiums; 3: Retained by Insurer @ interest; 4: Buy Paid-up WL policy add-ons; 5: Pay-up existing policy; 6: Buy 1-yr. Term policy.
Dividend options
Indeterminate Premium Whole Life policy
Indemnify
Modified Premium Whole Life policy
34. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.
Considerations in replacing Health insurance
Small Employer Medical Expense plan
Elimination (aka Waiting) period
Variable Universal Life policy
35. Excludes coverage for specific injury/illness either temporarily or permanently in order to eliminate pre-existing condition.
Recurrent disability clause/provision
Impairment (Exclusion) rider
Cash value
Loss exposure
36. 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.
Grace Period provision
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Cost of Living Adjustment (COLA) Disability rider
Revocable vs. Irrevocable beneficiary
37. War - 2 types; Suicide (1st 2 yrs.); Aviation (non-commercial); Hazardous hobbies; Criminal acts; Alcohol/Drug influenced.
Waiver of Premium provision
Tax implications of an Estate
Factors that determine premium
Common Life Exclusions
38. Same as WL but cash value increases @ current interest rates (not set); premium can start low or high & may change.
Trusts
Current Assumption (aka Interest-Sensitive) Whole Life policy
Requirements to sell variable life products
Family Income policy
39. Qualified Annuity - Tax-deductible contributions & tax-deferred growth but fully taxable w/drawals.
Tax implications of an Annuity (1 of 2)
Return of Cash Value rider
Term Life policy
Doctrine of Comity
40. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.
Insurance contract characteristics (1 of 2)
Relation of Earnings to Insurance provision
Tax implications of an Annuity (1 of 2)
Term Life policy
41. Federally-funded but state-run program for truly indigent individuals & families providing medical care at Federal clinic.
Rate (as defined by CIC)
Survivorship (aka "Last to die") policy
Medicaid/Medi-Cal
Common Disability Exclusions
42. Same as WL but can be "paid-up" early by paying larger premium for shorter payment period (i.e. 10 Pay Life - 20 Pay Life).
Types of Agency Authority
Limited Pay Whole Life policy
Guaranteed Insurability Life rider
CA Work. Comp. Statutes
43. Provides coverage for specific disease(s) - such as cancer or leukemia.
Workers' Compensation insurance
Viatical Settlement Provider (VSP)
Dread Disease policy
Life insurance policy
44. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.
Medicare Part A & B "Gaps"
Dividends
Rescission
CHAMPUS (aka TriCare)
45. 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.
Approval Type Conditional receipt
Legal Action provision
Medi-Cal Share Cost plan
Payor (aka Waiver of Payor's Premium) rider
46. 'The inability to perform ANY gainful occupation'.
Insurable interest
Total disability (any-occupational definition)
Revocable vs. Irrevocable beneficiary
Cross Purchase Plan
47. A&H - A&S - Sickness only; Medical; Disability; Accident only; Travel accident; LTC; Medicare supplement; AD&D; Dental/Vision/Prescription; Limited.
Civil Rights/Pregnancy Discrimination Act
Types of Accident & Health insurance
Reinstatement provision
Free Look provision
48. Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling - stock investment).
Employer-Administered plan
Occupational Disability policy
Credit Life policy
Pure risk vs. Speculative risk
49. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.
Comprehensive Major Medical plan
Underwriting risk categories
Split Dollar Plan
Levels of Long Term Care provided
50. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.
Proof of Loss provision
Life insurance policy
Dread Disease policy
Common Accident provision