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. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.






2. 1: Straight aka Pure Life - lifetime income but no survivorship refund; 2: Life w/ Period Certain - lifetime income w/ death benefit of monthly annuity for remaining predetermined term. 3: Annuity Certain - monthly income paid for predetermined term






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






4. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.






5. Federal law which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.






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






7. Allows Insured to increase death benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age.






8. 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.






9. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.






10. 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.






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






12. Receipt whereby coverage incepts immediately upon submission of full consideration - unless declined & premium refunded.






13. Same as WL but cash value increases @ current interest rates (not set); premium can start low or high & may change.






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






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






16. 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.






17. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.






18. Mathematical law stating the larger # of occurrences - the more predictable the losses; used to calculate premiums.






19. Waives premium on Life policy for minor child until age 21 in event premium payor dies or becomes disabled.

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






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






22. Available for any reason up to full cash value @ fixed (max 8%) OR variable interest rate; loan $ + interest deducted from benefit @ death.






23. Federal law which prohibits companies w/ 15+ employees from decreasing coverage benefits for women affected by pregnancy or childbirth.






24. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).






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






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






27. Price of insurance per exposure unit.






28. Non-qualified Annuity - Non-deductible contributions & tax-deferred growth. At pay-out - tax-free principal but taxable growth.






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






30. 'The inability to perform ANY reasonable occupation based on education - training or experience'.






31. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.






32. Process whereby a reinsurer reinsures w/ another reinsurer.






33. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.






34. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).






35. Waives premium upon disability of Insured until return to work; disability must persist for 6 mths. or longer. Cash value & dividends not affected.






36. If Insured changes to: more hazardous job - benefits reduced; less hazardous job - premiums reduce.






37. Prepaid med. benefits for "subscribers" @ approved facilities; many non-profit; Blue Cross - Hospital stays; Blue Shield - M.D. costs.






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






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






40. Basic Medical; Major Medical; Comprehensive Major Medical






41. Privately-provided or Medicare-provided (if no private carrier) prescription drug plans for qualified individuals but w/ premium - deductible & co-pay.






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).






43. 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.






44. A company providing lump sum buyout (50-90% of total) of Life policy; becomes owner & beneficiary & assumes premium payments; usually terminally ill viator.






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






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






47. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.






48. Govt. organization providing health care benefits for dependents of military personnel.






49. A&H - A&S - Sickness only; Medical; Disability; Accident only; Travel accident; LTC; Medicare supplement; AD&D; Dental/Vision/Prescription; Limited.






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