SUBJECTS
|
BROWSE
|
CAREER CENTER
|
POPULAR
|
JOIN
|
LOGIN
Business Skills
|
Soft Skills
|
Basic Literacy
|
Certifications
About
|
Help
|
Privacy
|
Terms
|
Email
Search
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. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.
Annuity
Applicant Representations vs. Warranties
Loss of Earnings Test
Exclusions to Work. Comp.
2. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.
Partial disability rider
Spendthrift provision
Return of Premium rider
Primary Insurance Amount (PIA)
3. War; elective cosmetic surgery; routine dental; work. comp.-covered claims; self-inflicted (intentional); gov't. facility treatment; LTC; private nursing.
Rehabilitation rider
Exclusions for Major Medical plan
Types of Term Life policies
Types of Insurers (by ownership)
4. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.
Common Disaster (Simultaneous Death Act) clause/provision
Free Look provision
Policy loans
Single Pay Whole Life policy
5. 'The inability to perform ANY reasonable occupation based on education - training or experience'.
Impairment (Exclusion) rider
Total disability (more restrictive definition)
Types of Licensed Producers
Tax implications of Disability policy
6. Price of insurance per exposure unit.
Rate (as defined by CIC)
Presumptive disability
Indemnify
Valid life insurance contracts must identify...
7. Prepaid med. benefits for "subscribers" @ approved facilities; many non-profit; Blue Cross - Hospital stays; Blue Shield - M.D. costs.
Blue Cross/Blue Shield
Types of reinsurance
Types of Agency Authority
Dental Plan
8. Responsible adult trustee designated to manage death benefits for minor child beneficiary until adulthood.
Annuity surrender charges
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Trusts
Suicide clause/provision
9. Unilateral - Insurer provides contract; Adhesion - parties must adhere to terms; Aleatory - benefits may not inure equally.
Preferred Provider Organization (PPO)
Return of Premium rider
Insurance contract characteristics (1 of 2)
Human Life Value approach
10. Available for any reason up to full cash value @ fixed (max 8%) OR variable interest rate; loan $ + interest deducted from benefit @ death.
Policy loans
Whole (aka Permanent or Straight) Life policy
Types of Insurers (by sector)
Dividend options
11. Provides benefit during Social Security "black-out" period - up to 1 yr.
Automatic Premium Loan (APL) provision
Social Security Benefit (Supplement) rider
Risk management
Approval Type Conditional receipt
12. Provides professional services - rehabilitation - training/re-training & related costs to assist Insured in returning to work.
Rehabilitation rider
Plans A-L of Medical Supplement or Medigap
Equity Index Whole Life policy
Business Overhead Expense (BOE) Disability policy
13. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.
Concealment
Juvenile Life (aka Jumping Juvenile) policy
Non-Occupational Disability policy
Relation of Earnings to Insurance provision
14. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).
Concealment exceptions
Concealment
Residual disability rider
Types of Insurers (by authorization)
15. Federal law which allows health coverage portability when changing jobs - so long as previous coverage was in effect 63+ days; allows some tax deductibility for LTC.
Time Limit on Certain Defenses provision
Health Reimbursement Account (HRA)
Types of Accident & Health (A&H) providers
Health Insurance Portability and Accountability Act (HIPAA)
16. Death benefit is NOT taxable. Cash value grows tax-deferred but cost basis (base premium) is not taxable - only interest is.
Approval Type Conditional receipt
Credit Life policy
Tax implications of Death Benefit & Cash Value
Errors & Omissions (E&O)
17. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.
Types of Renewability provisions
Types of Agency Authority
Relation of Earnings to Insurance provision
Recurrent disability clause/provision
18. Funding mechanism whereby employer & employee share cost of premium. Upon death - benefit is shared between employer & beneficiary.
Family policy
Settlement options for Life policy (2 of 2)
Medicare Supplement or Medigap policy
Split Dollar Plan
19. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.
Phases of an annuity
Endowment Life policy
Modified Endowment Contract (MEC)
7 Pay Test
20. Employer w/ 25 or less employees must offer all eligible employees @ least 2 medical plan options where pre-existing conditions can't be excluded more than 1 yr.
Endowment Life policy
Tax implications of an Annuity (1 of 2)
Waiver of Premium provision
Small Employer Medical Expense plan
21. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.
Cash value
Equity Index Whole Life policy
24 Hour Coverage (CA)
Flexible Spending Account (FSA)
22. An attempt to contain costs by employing various strategies - including wellness programs - preventative testing - outpatient & alternative procedures.
Medical cost containment (aka Managed care)
Types of Agency Authority
Valid life insurance contracts must identify...
Disability Income policy
23. A lapsed policy may be reinstated if not longer than 3-5 yrs. - & proof of insurability re-established - & back premiums + interest paid.
Approval Type Conditional receipt
Reinstatement provision
Types of reinsurance
Key Employee Disability policy
24. Expands individual WL policy to include Term Life for dependents (spouse - children - etc.).
Return of Premium rider
Family or Dependents rider
Law of Large Numbers
Automatic Premium Loan (APL) provision
25. 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.
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Dental Plan
Valid life insurance contracts must identify...
Tax implications of medical plans
26. Unintentional - up to $1 -000 + legal $; Intentional - $1 -000-5 -000 + legal $; If harmful - misdemeanor + up to 1 yr. prison + up to $10 -000.
Elimination (aka Waiting) period
Concealment exceptions
Peril vs. Hazard
Penalties for violating AIDS/HIV privacy laws
27. Refund of 50-80% of premium (minus claims paid) every 5-10 yrs. OR age 65; expensive!
Types of Insurers (by ownership)
Return of Premium rider
Key Employee policy
Tax implications of an Annuity (1 of 2)
28. Group plan initially self-funded by employer (like SIR); after which - group plan Insurer covers (up to policy limit); requires TPA.
Reinsurance
Valid life insurance contracts must identify...
COBRA Time Limitations
Employer-Administered plan
29. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.
Settlement options for Life policy (2 of 2)
Medicaid/Medi-Cal
24 Hour Coverage (CA)
Equity Index Whole Life policy
30. Federally-funded but state-run program for truly indigent individuals & families providing medical care at Federal clinic.
COBRA Time Limitations
Medicaid/Medi-Cal
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Annuity Classifications (3 of 5): Source of income
31. Same as WL but cash value increases @ current interest rates (not set); premium can start low or high & may change.
Cross Purchase Plan
Return of Premium rider
Current Assumption (aka Interest-Sensitive) Whole Life policy
Blue Cross/Blue Shield
32. Written policy terms supersede oral statements made prior to policy issue.
Parole Pardon Rule
Presumptive disability
Blackout Period
Credit Life policy
33. Dividends are NOT taxable but interest is. Loan interest is NOT tax-deductible. Interest paid by Insurer on retained funds is taxable.
Medi-Cal Share Cost plan
Legal Action provision
Tax implications of Dividends - Loans & Interest
Revocable vs. Irrevocable beneficiary
34. Treating or mitigating loss exposures through 1: avoidance; 2: retention (deductibles); 3: sharing; 4: reduction; or 5: transfer.
Market Value Adjusted (aka Modified Guaranteed) annuity
Split Dollar Plan
Risk management
Penalties for violating AIDS/HIV privacy laws
35. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).
Blue Cross/Blue Shield
Types of Insurers (by ownership)
Cost of Living Adjustment (COLA) Life rider
Medical Savings Account (MSA) & Health Savings Account (HSA)
36. Temp. coverage for set duration w/ death benefit ONLY (no cash value) - offers largest $ for lowest premium; renewable; convertible.
Annuity Classifications (2 of 5): When benefits begin
Binding receipt (aka Temporary Insurance Agreement)
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Term Life policy
37. Policy owner must notify Insurer of loss either in writing - in person or by phone w/in 20 days.
Fraud
Notice of Claim provision
Cash value
Medicare Supplement or Medigap policy
38. Same as Term Life but provides living benefit (endowment) to policy owner if Insured survives entire term.
Endowment Life policy
Elimination (aka Waiting) period
Major Medical plan
Business Continuation (aka Buy-Sell) policy
39. 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
Viatical Settlement Provider (VSP)
AIDS/HIV discrimination
Disability Income policy
40. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.
Human Life Value approach
Health Insurance Portability and Accountability Act (HIPAA)
Survivorship (aka "Last to die") policy
Whole (aka Permanent or Straight) Life policy
41. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.
Dividends
Partial disability rider
Pure risk vs. Speculative risk
Departments of an Insurer
42. Excludes coverage for suicide during 1st 2 yrs. ONLY but - if it does - all premiums must be returned to beneficiary.
Variable Life policy (2 of 2)
Suicide clause/provision
Payor (aka Waiver of Payor's Premium) rider
Juvenile Life (aka Jumping Juvenile) policy
43. 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.
Types of hazards
COBRA Time Limitations
Family Income policy
Human Life Value approach
44. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.
Family Maintenance policy
Insuring clause/provision (aka Insuring Agreement)
Retrocession
Modified Endowment Contract (MEC)
45. Receipt whereby coverage incepts immediately upon submission of full consideration - unless declined & premium refunded.
Binding receipt (aka Temporary Insurance Agreement)
Employer-Administered plan
Juvenile Life (aka Jumping Juvenile) policy
Exclusions for Major Medical plan
46. Same as WL but w/ Level Term rider; upon death - pays monthly income for FULL term AFTER which pays full death benefit.
Family Maintenance policy
Applicant Representations vs. Warranties
Human Life Value approach
Variable Universal Life policy
47. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Notice of Claim provision
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Health Insurance Portability and Accountability Act (HIPAA)
Group Disability plan
48. 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.
Tax implications of an Estate
Primary Insurance Amount (PIA)
Suicide clause/provision
Consolidated Omnibus Budget Reconciliation Act (COBRA)
49. 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;
Medicare Part C (aka Medicare Advantage)
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Waiver of Premium provision
Guaranteed Insurability Life rider
50. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).
Credit Life policy
Payor (aka Waiver of Payor's Premium) rider
Estoppel
Insurable interest