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. Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling - stock investment).






2. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.






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






4. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.






5. Provides professional services - rehabilitation - training/re-training & related costs to assist Insured in returning to work.






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






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






8. Basic Medical; Major Medical; Comprehensive Major Medical






9. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.






10. Same as Term Life but provides living benefit (endowment) to policy owner if Insured survives entire term.






11. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.






12. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.






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






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






15. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.






16. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.






17. Responsible adult trustee designated to manage death benefits for minor child beneficiary until adulthood.






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






19. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.






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






21. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.






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






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.






24. Allows Term policy conversion to Permanent policy w/out medical exam; must be identical or lower death benefit; based on either attained OR original age.






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






26. WL policy covering 2 or more Insureds but ONLY payable upon death of LAST Insured - generally low premium but high death benefit.






27. 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.






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






29. Provides coverage for specific disease(s) - such as cancer or leukemia.






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






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






32. 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;






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






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






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






36. Two death benefit options - Option A: death benefit ONLY; Option B: death benefit + cash value; death benefit NOT guaranteed.






37. Same as WL but w/ adjustable death benefit (& corresponding premium) & over-fund option but w/ annually renewable term (ART).






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






39. 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.






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






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






42. Policy provisions must conform to state regulations where policy is sold.






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






44. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.






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






46. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.






47. Life license + NASD (FINRA) Series 6 or 7.






48. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.






49. Intentional deception; grounds for rescission.






50. If Insured & primary beneficiary die due to same act (w/in 14 days) - primary assumed 1st to die & contingent beneficiary paid death benefit.