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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. Receipt whereby coverage incepts conditionally upon submission of full consideration and that all underwriting reqs. are met.
24 Hour Coverage (CA)
Errors & Omissions (E&O)
Parole Pardon Rule
Insurability Type Conditional receipt
2. Non-qualified Annuity - Non-deductible contributions & tax-deferred growth. At pay-out - tax-free principal but taxable growth.
Settlement options for Life policy (1 of 2)
Tax implications of an Annuity (1 of 2)
Risk management
Annuity Classifications (1 of 5): How premium is paid
3. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.
Rate (as defined by CIC)
Business Overhead Expense (BOE) Disability policy
Equity Indexed annuity
Modified Premium Whole Life policy
4. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.
Credit Life policy
Annuity
Return of Cash Value rider
Mortality vs. Morbidity tables
5. Treating or mitigating loss exposures through 1: avoidance; 2: retention (deductibles); 3: sharing; 4: reduction; or 5: transfer.
Risk management
Common Disaster (Simultaneous Death Act) clause/provision
Social Security Benefit (Supplement) rider
Tax implications of Dividends - Loans & Interest
6. Premiums determined by target cash values or death benefit; partial cash value w/drawals allowed; transparent policy w/ unbundled premium.
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Approval Type Conditional receipt
Civil Rights/Pregnancy Discrimination Act
Legal Action provision
7. Death benefit determined by Insured's projected lost earnings potential.
Convertibility provision
Mortality vs. Morbidity tables
Human Life Value approach
Factors that determine premium
8. Federal law which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.
Age Discrimination in Employment Act (ADEA)
Factors that determine premium
CA Work. Comp. Statutes
Family or Dependents rider
9. Potential circumstance that could cause a loss; measured in dollars.
Graded Premium Whole Life policy
Waiver of Premium (Waiver of Cost of Insurance) rider
Loss exposure
Suicide clause/provision
10. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.
Single Pay Whole Life policy
Annuity Classifications (5 of 5): # of lives
Joint Life (aka "First to die") policy
Small Employer Medical Expense plan
11. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.
Concealment
Insurer (as defined by CIC)
Key Employee policy
Tax implications of an Estate
12. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Medicare Part C (aka Medicare Advantage)
Group Disability plan
Total disability (any-occupational definition)
Annuity Classifications (3 of 5): Source of income
13. Provides medical & personal services for people needing extended assistance w/ Activities of Daily Living (ADL). Other benefits include: assisted living care; respite care; hospice care; adult day care.
Current Assumption (aka Interest-Sensitive) Whole Life policy
Cost of Living Adjustment (COLA) Life rider
Long Term Care (LTC) policy
Convertibility provision
14. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Medicare Part D
Rescission
Medi-Cal Share Cost plan
Key Employee policy
15. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.
Types of Renewability provisions
Return of Premium rider
Annuity Classifications (3 of 5): Source of income
Types of Insurers (by ownership)
16. Coverage remains in effect for 31 days past premium due date; benefits paid during grace period would be deducted from sum.
Medi-Cal Share Cost plan
Modified Endowment Contract (MEC)
Juvenile Life (aka Jumping Juvenile) policy
Grace Period provision
17. Provides hospital insurance automatically @ age 65 (if FICA qualified) @ no fee but may have deductible & co-pay.
Tax implications of Dividends - Loans & Interest
Medicare Part A (aka Hospital Insurance or HI)
Key Employee policy
Annuity Classifications (3 of 5): Source of income
18. Type of partial disability rider - which pays fluctuating % of lost income w/out time limit.
Annuity
Residual disability rider
Accidental Death (aka Multiple Indemnity) rider
Variable Universal Life policy
19. Same as Universal Life but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Variable Universal Life policy
Requirements to sell variable life products
Insurable interest
Return of Premium rider
20. Waives premium upon disability of Insured until return to work; disability must persist for 6 mths. or longer. Cash value & dividends not affected.
Social Security Benefit (Supplement) rider
Impairment (Exclusion) rider
Waiver of Premium (Waiver of Cost of Insurance) rider
Pure risk vs. Speculative risk
21. Covers disabilities occurring ONLY "off" job; benefits do not overlap work. comp. (i.e. Group plan).
Non-Occupational Disability policy
Common Life Exclusions
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Policy loans
22. Upon death - death benefit is paid + the aggregate of premiums paid to date; add-on to Term policy ONLY.
Health Reimbursement Account (HRA)
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Return of Premium rider
Common Accident provision
23. Fraternal - non-profit - members only; Reciprocal - unincorp'd org. - members insure each other; Lloyd's Assoc. - groups sharing risks; Surplus lines - special market risks.
Tax implications of Death Benefit & Cash Value
24 Hour Coverage (CA)
Permanent vs. Temporary disability
Types of Insurers (miscellaneous)
24. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.
Medical Savings Account (MSA) & Health Savings Account (HSA)
Tax implications of Disability policy
Conformity with State Statute provision
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
25. If Insured changes to: more hazardous job - benefits reduced; less hazardous job - premiums reduce.
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Binding receipt (aka Temporary Insurance Agreement)
Concealment
Change of Occupation provision
26. Receipt whereby coverage incepts immediately upon submission of full consideration - unless declined & premium refunded.
Binding receipt (aka Temporary Insurance Agreement)
Juvenile Life (aka Jumping Juvenile) policy
Spendthrift provision
Settlement options for Life policy (1 of 2)
27. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.
Medicare Part A (aka Hospital Insurance or HI)
Impairment (Exclusion) rider
Common Accident provision
Settlement options for Life policy (1 of 2)
28. 'The inability to perform your OWN normal occupation or daily duties'.
Total disability (as commonly defined)
Medicare Part D
Reinsurance
Adjustable Whole Life policy
29. Mandatory 100% employer-funded coverage for injuries/illnesses occurring "on" job; full-time employees only; exclusive remedy. Provides: 1: unlimited medical benefit; 2: survivor income replacement & funeral ($5 -000 max.); 3: disability benefit @ 66
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30. 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)
Age Discrimination in Employment Act (ADEA)
Annuity
Medicare Part C (aka Medicare Advantage)
31. 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.
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Misstatement of Age/Sex provision
Medicare
Retrocession
32. An unintentional mistake committed by an insurance representative; may be covered by E&O insurance.
Automatic Premium Loan (APL) provision
Cost of Living Adjustment (COLA) Disability rider
Free Look provision
Errors & Omissions (E&O)
33. Federal law to protect Federal employees' (& their beneficiaries') pension - group insurance - & welfare benefits.
Medicaid/Medi-Cal
Employee Retirement Income Security Act (ERISA)
Policy loans
Business Overhead Expense (BOE) Disability policy
34. Same as Comprehensive Major Medical but w/ integrated deductible; much more expensive.
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Annuity Classifications (5 of 5): # of lives
Factors that determine premium
Supplemental Major Medical plan
35. Combination of Basic Medical & Major Medical in one policy; Basic pays 1st - then Major Medical w/ corridor deductible.
Concealment exceptions
Viatical Settlement Provider (VSP)
Comprehensive Major Medical plan
Accidental Death & Dismemberment (AD&D) Life policy
36. Death benefit is NOT taxable. Cash value grows tax-deferred but cost basis (base premium) is not taxable - only interest is.
Notice of Claim provision
Tax implications of Death Benefit & Cash Value
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Enhanced Ordinary (aka Extraordinary) Whole Life policy
37. Process which prevents claim denial as a result of false statement or promise (made by Insurer) - which was relied upon by Insured.
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Business Continuation (aka Buy-Sell) Disability policy
Estoppel
Civil Rights/Pregnancy Discrimination Act
38. Benefits NOT taxable; employer-paid premiums deductible to employer; individual plans not deductible unless over 7 1/2% of adjusted gross income - then excess deductible.
Claim Form (aka Proof of Loss Form) provision
Family Income policy
Waiver of Premium (Waiver of Cost of Insurance) rider
Tax implications of medical plans
39. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).
Types of Insurers (by authorization)
Types of Insurers (by sector)
Medicare Part D
Palliative vs. Curative care
40. Receipt whereby coverage incepts ONLY after underwriting approval.
Approval Type Conditional receipt
Insurance contract characteristics (1 of 2)
Retrocession
Life insurance policy
41. Group plan initially self-funded by employer (like SIR); after which - group plan Insurer covers (up to policy limit); requires TPA.
Modified Endowment Contract (MEC)
Endowment Life policy
Employer-Administered plan
Medicare Supplement or Medigap policy
42. Allows policy owner to w/draw set % of death benefit upon verification of terminal illness w/ expectancy 12-24 mths.; generally tax-free.
Valid life insurance contracts must identify...
Non-forfeiture options for WL policy
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
43. Part A - Inpatient hospital deductibles vary on # of days; limited reserve days; finite benefit; 1st 3 pints blood; Part B - 20% co-payment.
Major Medical plan
Medical cost containment (aka Managed care)
Applicant Representations vs. Warranties
Medicare Part A & B "Gaps"
44. No deductible coverage for: daily room/board; ancillary costs; surgeon &/or physician expense (for added premium).
Insurance contract characteristics (2 of 2)
Reinsurance
Medicaid/Medi-Cal
Basic Medical plan
45. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.
Employer-Administered plan
Types of Accident & Health (A&H) providers
Annuity Classifications (5 of 5): # of lives
Dividends
46. 'The inability to perform ANY reasonable occupation based on education - training or experience'.
Business Overhead Expense (BOE) Disability policy
Total disability (more restrictive definition)
Exclusions for Major Medical plan
Common Disability Exclusions
47. Earned premium is $ paid for coverage to date. Unearned premium is $ paid & returnable due to coverage not provided.
CHAMPUS (aka TriCare)
Proof of Loss provision
Earned vs. Unearned premium
Applicant Representations vs. Warranties
48. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Annuity Classifications (3 of 5): Source of income
Single Pay Whole Life policy
Accidental Death & Dismemberment (AD&D) Disability rider
49. Dividends are NOT taxable but interest is. Loan interest is NOT tax-deductible. Interest paid by Insurer on retained funds is taxable.
Return of Cash Value rider
Tax implications of Dividends - Loans & Interest
Waiver of Premium (Waiver of Cost of Insurance) rider
CHAMPUS (aka TriCare)
50. Coverage for catastrophic loss w/ high limits - front end deductible; co-insurance (80/20%); blanket coverage; stop loss max.
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Modified Premium Whole Life policy
Recurrent disability clause/provision
Major Medical plan