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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. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.
Basic Medical plan
Law of Large Numbers
Modified Premium Whole Life policy
Dental Plan
2. A&H - A&S - Sickness only; Medical; Disability; Accident only; Travel accident; LTC; Medicare supplement; AD&D; Dental/Vision/Prescription; Limited.
Types of Accident & Health insurance
Medicare Part A (aka Hospital Insurance or HI)
AIDS/HIV discrimination
IRS Penalties for Annuities
3. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.
Annuity
Endowment Life policy
1035 Exchange
Reinsurance
4. Intentional OR unintentional failure to disclose material underwriting facts that should have been disclosed; grounds for policy rescission.
Residual disability rider
Concealment
Whole (aka Permanent or Straight) Life policy
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
5. Process whereby a reinsurer reinsures w/ another reinsurer.
Annuity Classifications (2 of 5): When benefits begin
Rehabilitation rider
Retrocession
Common Life Exclusions
6. Allows for Term policy renewal @ higher premium w/out medical exam; guarantees insurability; based on actual/attained age.
Renewability provision
Needs approach (most common)
Types of Insurers (by ownership)
Return of Cash Value rider
7. Group plan initially self-funded by employer (like SIR); after which - group plan Insurer covers (up to policy limit); requires TPA.
Tax implications of an Annuity (1 of 2)
Premium modes
Endowment Life policy
Employer-Administered plan
8. Savings account for medical expenses; Tax-deductible contributions; tax-deferred growth; tax-free for qualified use; taxable for non-qualified use.
Adverse selection
Estoppel
Common Disability Exclusions
Medical Savings Account (MSA) & Health Savings Account (HSA)
9. Part A - Inpatient hospital deductibles vary on # of days; limited reserve days; finite benefit; 1st 3 pints blood; Part B - 20% co-payment.
Total disability (as commonly defined)
Medicare Part A & B "Gaps"
Cash value
COBRA Time Limitations
10. Receipt whereby coverage incepts ONLY after underwriting approval.
Approval Type Conditional receipt
Concealment exceptions
Renewability provision
Tax implications of Dividends - Loans & Interest
11. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.
Total disability (more restrictive definition)
Employer-Administered plan
Non-Occupational Disability policy
Incontestability clause/provision
12. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.
Employer-Administered plan
Primary Insurance Amount (PIA)
Underwriting risk categories
Renewability provision
13. Provides % of monthly income benefit if Insured becomes disabled due to illness or accident.
Policy delivery
Risk management
Disability Income policy
Insurable interest
14. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.
IRS Penalties for Annuities
Medicare Supplement or Medigap policy
Levels of Long Term Care provided
Blackout Period
15. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.
Social Security Benefit (Supplement) rider
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Types of Agency Authority
Types of Insurers (by domicile)
16. 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
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Primary Insurance Amount (PIA)
Cash value
Insurance contract characteristics (2 of 2)
17. Upon death - death benefit is paid + the aggregate of premiums paid to date; add-on to Term policy ONLY.
Return of Premium rider
Family Maintenance policy
Types of Accident & Health (A&H) providers
Survivorship (aka "Last to die") policy
18. Expands individual WL policy to include Term Life for dependents (spouse - children - etc.).
Loss exposure
Medical Savings Account (MSA) & Health Savings Account (HSA)
Family or Dependents rider
Survivorship (aka "Last to die") policy
19. Representation - oral or written statement made to best of knowledge or belief; Warranty - statement guaranteed/presumed/understood to be true.
Employer Liability
Applicant Representations vs. Warranties
Tax implications of Disability policy
Annuity surrender charges
20. An attempt to contain costs by employing various strategies - including wellness programs - preventative testing - outpatient & alternative procedures.
Business Continuation (aka Buy-Sell) policy
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Levels of Long Term Care provided
Medical cost containment (aka Managed care)
21. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.
Credit Life policy
Proof of Loss provision
Errors & Omissions (E&O)
Revocable vs. Irrevocable beneficiary
22. Provides for continued operation of business if partner dies - by allowing surviving partner(s) to buy deceased partner's interest in business.
Business Continuation (aka Buy-Sell) policy
Survivorship (aka "Last to die") policy
Variable Universal Life policy
Departments of an Insurer
23. 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.
Valid life insurance contracts must identify...
Blackout Period
Reinstatement provision
Limited Pay Whole Life policy
24. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Elimination (aka Waiting) period
Key Employee policy
Indeterminate Premium Whole Life policy
Health Reimbursement Account (HRA)
25. Conditional - coverage is conditional; Personal - parties are people; Good faith - honesty/integrity; Fiduciary - req's financial trust.
Trial Application (aka Request for Offer)
Insurance contract characteristics (2 of 2)
Dividends
Business Continuation (aka Buy-Sell) Disability policy
26. Premiums determined by target cash values or death benefit; partial cash value w/drawals allowed; transparent policy w/ unbundled premium.
Credit Life policy
Health Insurance Portability and Accountability Act (HIPAA)
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Rescission
27. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.
Return of Premium rider
Payor (aka Waiver of Payor's Premium) rider
Flexible Spending Account (FSA)
Penalties for violating AIDS/HIV privacy laws
28. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.
Long Term Care (LTC) policy
7 Pay Test
Medicare Part D
Return of Premium rider
29. 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.
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Health Maintenance Organization (HMO)
Types of Licensed Producers
Convertibility provision
30. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Automatic Premium Loan (APL) provision
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Cost of Living Adjustment (COLA) Disability rider
31. Policy must be delivered w/ original (or copy of same) application attached.
Annuity Classifications (3 of 5): Source of income
Types of Agency Authority
1035 Exchange
Entire Contract provision
32. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Medicare
Requirements to sell variable life products
Age Discrimination in Employment Act (ADEA)
33. 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.
Supplemental Major Medical plan
Current Assumption (aka Interest-Sensitive) Whole Life policy
Juvenile Life (aka Jumping Juvenile) policy
Long Term Care (LTC) policy
34. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.
Relation of Earnings to Insurance provision
Return of Cash Value rider
Revocable vs. Irrevocable beneficiary
Accidental Death & Dismemberment (AD&D) Life policy
35. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.
Common Accident provision
Disability Income policy
Family Maintenance policy
Grace Period provision
36. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.
AIDS/HIV discrimination
Time Limit on Certain Defenses provision
Health Maintenance Organization (HMO)
Claim Form (aka Proof of Loss Form) provision
37. 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.
Revocable vs. Irrevocable beneficiary
COBRA Time Limitations
Payment of Premium provision
Primary Insurance Amount (PIA)
38. Funding mechanism whereby employer & employee share cost of premium. Upon death - benefit is shared between employer & beneficiary.
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Indemnify
Pure risk vs. Speculative risk
Split Dollar Plan
39. Receipt whereby coverage incepts immediately upon submission of full consideration - unless declined & premium refunded.
Types of Licensed Producers
Payor (aka Waiver of Payor's Premium) rider
Recurrent disability clause/provision
Binding receipt (aka Temporary Insurance Agreement)
40. The state in which the contract is accepted or delivered is the state that possesses regulatory jurisdiction over Group plan.
Common Life Exclusions
Common Disaster (Simultaneous Death Act) clause/provision
Doctrine of Comity
Proof of Loss provision
41. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
IRS Penalties for Annuities
Health Insurance Portability and Accountability Act (HIPAA)
Proof of Loss provision
42. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.
Accidental Death (aka Multiple Indemnity) rider
Medicare Part D
Endowment Life policy
Rescission
43. Policy owner must notify Insurer of loss either in writing - in person or by phone w/in 20 days.
Exclusions for Major Medical plan
Notice of Claim provision
Health Insurance Portability and Accountability Act (HIPAA)
Permanent vs. Temporary disability
44. Federal law which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.
Risk management
Indeterminate Premium Whole Life policy
Age Discrimination in Employment Act (ADEA)
Whole (aka Permanent or Straight) Life policy
45. Combination of Basic Medical & Major Medical in one policy; Basic pays 1st - then Major Medical w/ corridor deductible.
Modified Premium Whole Life policy
Comprehensive Major Medical plan
Levels of Long Term Care provided
Primary Insurance Amount (PIA)
46. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.
Major Medical plan
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Point of Service plan
1035 Exchange
47. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).
Equity Indexed annuity
Flexible Spending Account (FSA)
Types of Insurers (by authorization)
Automatic Premium Loan (APL) provision
48. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Peril vs. Hazard
Impairment (Exclusion) rider
Employer Liability
Accidental Death & Dismemberment (AD&D) Disability rider
49. Monthly; Quarterly; Semi-annually; Annually (cheapest due to less admin cost).
Types of Insurers (miscellaneous)
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Premium modes
Annuity surrender charges
50. Provides benefit during Social Security "black-out" period - up to 1 yr.
IRS Penalties for Annuities
Medical cost containment (aka Managed care)
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Social Security Benefit (Supplement) rider