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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. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.
Juvenile Life (aka Jumping Juvenile) policy
7 Pay Test
Waiver of Premium provision
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
2. Agreement - Offer & acceptance; Consideration - application + premium; Legal capacity - licensed &/or competent; Legal purpose - public good.
Common Disability Exclusions
Elements to contract
Misstatement of Age/Sex provision
Types of Term Life policies
3. Death benefit determined by Insured's financial goals & needs (minus assets).
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
24 Hour Coverage (CA)
Total disability (as commonly defined)
Needs approach (most common)
4. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.
Relation of Earnings to Insurance provision
Limited Pay Whole Life policy
Factors that determine premium
Trusts
5. Non-qualified Annuity - Non-deductible contributions & tax-deferred growth. At pay-out - tax-free principal but taxable growth.
Employer-Administered plan
Tax implications of an Annuity (1 of 2)
Loss exposure
Health Maintenance Organization (HMO)
6. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.
Tax implications of an Annuity (1 of 2)
Common Disaster (Simultaneous Death Act) clause/provision
Family Maintenance policy
Underwriting risk categories
7. 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.
Blackout Period
Levels of Long Term Care provided
Tax implications of an Estate
Elements to contract
8. Insured can seek legal action against Insurer for denial of claim only after 60 days and up to 3 yrs. after providing proof of loss.
Cash value
Legal Action provision
Workers' Compensation insurance
Elements to contract
9. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.
Rescission
Medicare Supplement or Medigap policy
Types of Accident & Health (A&H) providers
Family Maintenance policy
10. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.
Family policy
Dread Disease policy
Factors that determine premium
Types of Insurers (by authorization)
11. Provides hospital insurance automatically @ age 65 (if FICA qualified) @ no fee but may have deductible & co-pay.
Medicare Part A (aka Hospital Insurance or HI)
Pure risk vs. Speculative risk
Relation of Earnings to Insurance provision
Annuity
12. Upon death - death benefit is paid + the aggregate of cash value accumulated to date; add-on to WL policy ONLY.
1035 Exchange
Return of Cash Value rider
Medicaid/Medi-Cal
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
13. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.
Cash value
24 Hour Coverage (CA)
Viatical Settlement Provider (VSP)
Annuity Classifications (5 of 5): # of lives
14. Same as WL but cash value increases @ current interest rates (not set); premium can start low or high & may change.
Underwriting risk categories
Phases of an annuity
Current Assumption (aka Interest-Sensitive) Whole Life policy
Types of Agency Authority
15. Peril is the CAUSE of loss. Hazard is a condition that increases LIKELIHOOD of loss.
Group Disability plan
Peril vs. Hazard
Penalties for violating AIDS/HIV privacy laws
Variable Universal Life policy
16. Same as WL but premium low for set # yrs. - THEN premiums vary (+ or -) based on Insurer's investment returns - w/ Gmax.
Primary Insurance Amount (PIA)
Indeterminate Premium Whole Life policy
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Annuity Classifications (2 of 5): When benefits begin
17. Federal law which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.
Equity Indexed annuity
Life insurance policy
COBRA Time Limitations
Age Discrimination in Employment Act (ADEA)
18. Basic Medical; Major Medical; Comprehensive Major Medical
Types of hazards
Types of Medical Plans
Payment of Premium provision
Conformity with State Statute provision
19. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.
Graded Premium Whole Life policy
Common Disability Exclusions
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Equity Index Whole Life policy
20. 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
Viatical Settlement Provider (VSP)
Recurrent disability clause/provision
Modified Premium Whole Life policy
21. Provides professional services - rehabilitation - training/re-training & related costs to assist Insured in returning to work.
Variable Life policy (1 of 2)
Considerations in replacing Health insurance
Dividend options
Rehabilitation rider
22. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.
Mortality vs. Morbidity tables
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
23. Temp. coverage for set duration w/ death benefit ONLY (no cash value) - offers largest $ for lowest premium; renewable; convertible.
Term Life policy
Types of Accident & Health (A&H) providers
Types of Renewability provisions
Types of Term Life policies
24. Prepaid med. benefits for members ONLY w/ approved primary care M.D. (HMO employee); focus on preventative care; low co-pay.
Health Maintenance Organization (HMO)
Concealment
24 Hour Coverage (CA)
Common Disability Exclusions
25. Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling - stock investment).
Claim Form (aka Proof of Loss Form) provision
Pure risk vs. Speculative risk
Beneficiary provisions
Needs approach (most common)
26. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.
Point of Service plan
Insuring clause/provision (aka Insuring Agreement)
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Policy delivery
27. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.
Types of Insurers (by domicile)
Blackout Period
Trial Application (aka Request for Offer)
Parole Pardon Rule
28. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).
AIDS/HIV discrimination
Current Assumption (aka Interest-Sensitive) Whole Life policy
Common Disability Exclusions
Indemnify
29. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.
Types of Insurers (by ownership)
Phases of an annuity
Juvenile Life (aka Jumping Juvenile) policy
Graded Premium Whole Life policy
30. Written policy terms supersede oral statements made prior to policy issue.
Long Term Care (LTC) policy
Retrocession
Parole Pardon Rule
Experience vs. Community rating in Group Health plan
31. Covers entire family w/ WL for breadwinner & (convertible) Level Term for spouse & children (until certain age).
Types of Insurers (by sector)
24 Hour Coverage (CA)
Family policy
Binding receipt (aka Temporary Insurance Agreement)
32. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).
Key Employee Disability policy
Endowment Life policy
Cost of Living Adjustment (COLA) Life rider
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
33. Allows Insured to increase death benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age.
Guaranteed Insurability Life rider
Conformity with State Statute provision
Common Life Exclusions
Insurance contract characteristics (2 of 2)
34. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)
Tax implications of medical plans
Policy loans
Key Employee Disability policy
Annuity Classifications (1 of 5): How premium is paid
35. 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.
Employee Retirement Income Security Act (ERISA)
Underwriting risk categories
Valid life insurance contracts must identify...
Annuity Classifications (2 of 5): When benefits begin
36. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.
Trusts
Adverse selection
Whole (aka Permanent or Straight) Life policy
Exclusions to Work. Comp.
37. Fraternal - non-profit - members only; Reciprocal - unincorp'd org. - members insure each other; Lloyd's Assoc. - groups sharing risks; Surplus lines - special market risks.
Types of Insurers (miscellaneous)
Partial disability rider
Equity Indexed annuity
Factors that determine premium
38. Conditional - coverage is conditional; Personal - parties are people; Good faith - honesty/integrity; Fiduciary - req's financial trust.
Insurance contract characteristics (2 of 2)
Types of Insurers (by domicile)
Return of Premium rider
CA Work. Comp. Statutes
39. 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.
Tax implications of medical plans
Tax implications of an Annuity (1 of 2)
Key Employee Disability policy
Spendthrift provision
40. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.
Medi-Cal Share Cost plan
Health Insurance Portability and Accountability Act (HIPAA)
Considerations in replacing Health insurance
Automatic Premium Loan (APL) provision
41. Same as WL but w/ adjustable death benefit (& corresponding premium) & over-fund option but w/ annually renewable term (ART).
Return of Premium rider
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Residual disability rider
Accidental Death & Dismemberment (AD&D) Disability rider
42. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.
Spendthrift provision
Types of Insurers (by authorization)
Rescission
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
43. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.
Annuity
Indemnify
Risk management
Medicare
44. Federal law which prohibits companies w/ 15+ employees from decreasing coverage benefits for women affected by pregnancy or childbirth.
Civil Rights/Pregnancy Discrimination Act
Applicant Representations vs. Warranties
Group Disability plan
Cross Purchase Plan
45. Govt. organization providing health care benefits for dependents of military personnel.
Occupational Disability policy
CHAMPUS (aka TriCare)
Employee Retirement Income Security Act (ERISA)
Incontestability clause/provision
46. Same as Term Life but provides living benefit (endowment) to policy owner if Insured survives entire term.
Blackout Period
Rescission
Types of Agency Authority
Endowment Life policy
47. War - 2 types; Suicide (1st 2 yrs.); Aviation (non-commercial); Hazardous hobbies; Criminal acts; Alcohol/Drug influenced.
Factors that determine premium
Common Life Exclusions
Small Employer Medical Expense plan
7 Pay Test
48. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.
Proof of Loss provision
Total disability (any-occupational definition)
Variable Life policy (2 of 2)
Annuity Classifications (3 of 5): Source of income
49. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.
Concealment exceptions
Departments of an Insurer
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Elements to contract
50. Dividends are NOT taxable but interest is. Loan interest is NOT tax-deductible. Interest paid by Insurer on retained funds is taxable.
Workers' Compensation insurance
Primary Insurance Amount (PIA)
Tax implications of Dividends - Loans & Interest
Partial disability rider