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






2. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.






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






4. 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.






5. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.






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






7. 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;






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






9. 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.






10. Plan A is the CORE benefit & is least expensive; All other plans include Plan A + additional benefits. Plans F & J are high deductible. K & L are both deductible & co-pay plans.






11. 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.






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






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






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






15. Same as WL but w/ Level Term rider; upon death - pays monthly income for FULL term AFTER which pays full death benefit.






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






17. War; elective cosmetic surgery; routine dental; work. comp.-covered claims; self-inflicted (intentional); gov't. facility treatment; LTC; private nursing.






18. Policy must be delivered w/ original (or copy of same) application attached.






19. Written policy terms supersede oral statements made prior to policy issue.






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






21. 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.






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






23. Intentional OR unintentional failure to disclose material underwriting facts that should have been disclosed; grounds for policy rescission.






24. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.






25. Allows for use of HMO/PPO or other private carrier to provide expanded benefits @ additional premium & if enrolled in BOTH Parts A & B.






26. Pre-existing illness/injury; Waiting period; Elimination period; Probationary period; Benefits - Exclusions - Limitations; Underwriting reqs.






27. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.






28. Provides hospital insurance automatically @ age 65 (if FICA qualified) @ no fee but may have deductible & co-pay.






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






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






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






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






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






34. Reappearance of disability w/in 6 mth. period after "recovery" from same disability is considered recurrence - not new disability.






35. 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.






36. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.






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






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






39. 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).






40. Excludes coverage for specific injury/illness either temporarily or permanently in order to eliminate pre-existing condition.






41. Intentional deception; grounds for rescission.






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






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






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






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






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






47. Funding mechanism whereby employer & employee share cost of premium. Upon death - benefit is shared between employer & beneficiary.






48. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.






49. 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.






50. Receipt whereby coverage incepts conditionally upon submission of full consideration and that all underwriting reqs. are met.