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Test your basic knowledge |
CA Life Agent Exam
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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. 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 (1 of 5): How premium is paid
Common Disaster (Simultaneous Death Act) clause/provision
Underwriting risk categories
Tax implications of medical plans
2. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.
Types of Accident & Health (A&H) providers
Insurable interest
Variable Life policy (1 of 2)
Doctrine of Comity
3. 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.
Long Term Care (LTC) policy
Types of hazards
Cross Purchase Plan
Accidental Death & Dismemberment (AD&D) Disability rider
4. Benefits automatically increase annually based on inflationary index (i.e. Consumer Price Index) OR flat rate (5% max.).
Cost of Living Adjustment (COLA) Disability rider
Binding receipt (aka Temporary Insurance Agreement)
Automatic Premium Loan (APL) provision
Loss exposure
5. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.
Payment of Premium provision
Loss exposure
Experience vs. Community rating in Group Health plan
Pure risk vs. Speculative risk
6. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.
Adverse selection
Medicaid/Medi-Cal
Types of Renewability provisions
Blue Cross/Blue Shield
7. Agreement - Offer & acceptance; Consideration - application + premium; Legal capacity - licensed &/or competent; Legal purpose - public good.
Single Pay Whole Life policy
Elements to contract
Policy delivery
Major Medical plan
8. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.
AIDS/HIV discrimination
Incontestability clause/provision
Adverse selection
Grace Period provision
9. Waives premium upon disability of Insured until return to work; disability must persist for 6 mths. or longer. Cash value & dividends not affected.
AIDS/HIV discrimination
Waiver of Premium (Waiver of Cost of Insurance) rider
Tax implications of Disability policy
Common Accident provision
10. Covers disabilities occurring ONLY "off" job; benefits do not overlap work. comp. (i.e. Group plan).
Types of Licensed Producers
Credit Life policy
Small Employer Medical Expense plan
Non-Occupational Disability policy
11. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.
Grace Period provision
Convertibility provision
Doctrine of Comity
Common Accident provision
12. Two death benefit options - Option A: death benefit ONLY; Option B: death benefit + cash value; death benefit NOT guaranteed.
Proof of Loss provision
Types of Medical Plans
Equity Indexed annuity
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
13. Beneficiary has right to leave death benefits / Insurer to protect $ from creditors; interest (taxable) paid on retained funds.
Conformity with State Statute provision
Exclusions for Major Medical plan
Spendthrift provision
Dread Disease policy
14. Allows for use of HMO/PPO or other private carrier to provide expanded benefits @ additional premium & if enrolled in BOTH Parts A & B.
Misstatement of Age/Sex provision
Tax implications of Disability policy
Medicare Part C (aka Medicare Advantage)
Payor (aka Waiver of Payor's Premium) rider
15. Provides 24 hr. health coverage both "on" & "off" job - but may cause coverage duplication & coordination challenges.
Small Employer Medical Expense plan
24 Hour Coverage (CA)
Payor (aka Waiver of Payor's Premium) rider
Policy loans
16. 'The inability to perform your OWN normal occupation or daily duties'.
Modified Premium Whole Life policy
COBRA Time Limitations
Total disability (as commonly defined)
Common Life Exclusions
17. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.
Total disability (more restrictive definition)
Departments of an Insurer
Insuring clause/provision (aka Insuring Agreement)
Underwriting risk categories
18. Waives premium on Life policy for minor child until age 21 in event premium payor dies or becomes disabled.
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19. Same as WL but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Insurance contract characteristics (2 of 2)
Types of reinsurance
Legal Action provision
Variable Life policy (1 of 2)
20. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.
Joint Life (aka "First to die") policy
Permanent vs. Temporary disability
Medical Savings Account (MSA) & Health Savings Account (HSA)
Disability Income policy
21. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.
Medicare Part A (aka Hospital Insurance or HI)
Settlement options for Life policy (2 of 2)
Settlement options for Life policy (1 of 2)
Insurer (as defined by CIC)
22. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.
Human Life Value approach
Levels of Long Term Care provided
Reinstatement provision
Medicaid/Medi-Cal
23. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Annuity Classifications (5 of 5): # of lives
Accidental Death & Dismemberment (AD&D) Life policy
Penalties for violating AIDS/HIV privacy laws
Juvenile Life (aka Jumping Juvenile) policy
24. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.
Phases of an annuity
Insurance contract characteristics (2 of 2)
Comprehensive Major Medical plan
Trusts
25. Covers entire family w/ WL for breadwinner & (convertible) Level Term for spouse & children (until certain age).
Family policy
Reinsurance
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Equity Index Whole Life policy
26. 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.
Major Medical plan
Types of Term Life policies
Payor (aka Waiver of Payor's Premium) rider
Annuity surrender charges
27. Federal law to protect Federal employees' (& their beneficiaries') pension - group insurance - & welfare benefits.
Medicare Part D
Claim Form (aka Proof of Loss Form) provision
Annuity Classifications (2 of 5): When benefits begin
Employee Retirement Income Security Act (ERISA)
28. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.
Suicide clause/provision
Underwriting risk categories
Residual disability rider
Whole (aka Permanent or Straight) Life policy
29. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.
Equity Indexed annuity
Pure risk vs. Speculative risk
Dividends
CA Work. Comp. Statutes
30. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).
Types of Insurers (by domicile)
Settlement options for Life policy (2 of 2)
Medical Savings Account (MSA) & Health Savings Account (HSA)
Common Disability Exclusions
31. 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.
Legal Action provision
Notice of Claim provision
Health Maintenance Organization (HMO)
Annuity
32. Domestic - within home state; Foreign - outside home state; Alien - outside home country.
Conformity with State Statute provision
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Types of Insurers (by domicile)
Family Maintenance policy
33. Agents - represent Insurer; Brokers - represent themselves & Insured; Solicitors - represent one agent to solicit leads.
Types of Licensed Producers
Types of Insurers (by sector)
Tax implications of an Annuity (1 of 2)
Health Reimbursement Account (HRA)
34. Basic Medical; Major Medical; Comprehensive Major Medical
CA Work. Comp. Statutes
Medicare Part A & B "Gaps"
Types of Medical Plans
Proof of Loss provision
35. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.
Earned vs. Unearned premium
Dividends
Exclusions to Work. Comp.
Primary Insurance Amount (PIA)
36. 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.
Health Insurance Portability and Accountability Act (HIPAA)
Indeterminate Premium Whole Life policy
Cash value
Legal Action provision
37. Refund of 50-80% of premium (minus claims paid) every 5-10 yrs. OR age 65; expensive!
Mortality vs. Morbidity tables
Elimination (aka Waiting) period
Return of Premium rider
Accidental Death & Dismemberment (AD&D) Life policy
38. Earned premium is $ paid for coverage to date. Unearned premium is $ paid & returnable due to coverage not provided.
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Earned vs. Unearned premium
Fraud
Insurable interest
39. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.
Mortality vs. Morbidity tables
Cross Purchase Plan
Plans A-L of Medical Supplement or Medigap
Revocable vs. Irrevocable beneficiary
40. The state in which the contract is accepted or delivered is the state that possesses regulatory jurisdiction over Group plan.
Concealment exceptions
Types of reinsurance
Health Maintenance Organization (HMO)
Doctrine of Comity
41. Provides benefit during Social Security "black-out" period - up to 1 yr.
Family policy
Indeterminate Premium Whole Life policy
Social Security Benefit (Supplement) rider
Human Life Value approach
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).
Disability Income policy
Limited Pay Whole Life policy
Human Life Value approach
COBRA Time Limitations
43. Premiums determined by target cash values or death benefit; partial cash value w/drawals allowed; transparent policy w/ unbundled premium.
Cash value
Retrocession
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Insurance contract characteristics (1 of 2)
44. WL policy covering 2 or more Insureds but ONLY payable upon death of LAST Insured - generally low premium but high death benefit.
Survivorship (aka "Last to die") policy
Annuity
Mortality vs. Morbidity tables
Exclusions for Major Medical plan
45. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.
Insuring clause/provision (aka Insuring Agreement)
Small Employer Medical Expense plan
Term Life policy
Modified Endowment Contract (MEC)
46. Reappearance of disability w/in 6 mth. period after "recovery" from same disability is considered recurrence - not new disability.
Doctrine of Comity
Common Disability Exclusions
Tax implications of medical plans
Recurrent disability clause/provision
47. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Insurable interest
Plans A-L of Medical Supplement or Medigap
Group Disability plan
48. 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...
Convertibility provision
Insurer (as defined by CIC)
Long Term Care (LTC) policy
49. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.
Juvenile Life (aka Jumping Juvenile) policy
Peril vs. Hazard
Binding receipt (aka Temporary Insurance Agreement)
Credit Life policy
50. Responsible adult trustee designated to manage death benefits for minor child beneficiary until adulthood.
Concealment exceptions
Common Disability Exclusions
Claim Form (aka Proof of Loss Form) provision
Trusts
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