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Test your basic knowledge |
CA Life Agent Exam
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Subject
:
certifications
Instructions:
Answer 50 questions in 15 minutes.
If you are not ready to take this test, you can
study here
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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. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.
Modified Premium Whole Life policy
Cost of Living Adjustment (COLA) Disability rider
Types of Insurers (miscellaneous)
Flexible Spending Account (FSA)
2. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.
Common Disaster (Simultaneous Death Act) clause/provision
Primary Insurance Amount (PIA)
Common Disability Exclusions
Endowment Life policy
3. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.
Indemnify
Medicaid/Medi-Cal
Risk management
Spendthrift provision
4. Potential circumstance that could cause a loss; measured in dollars.
Medicare Part D
Loss exposure
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
5. Unilateral - Insurer provides contract; Adhesion - parties must adhere to terms; Aleatory - benefits may not inure equally.
Partial disability rider
Tax implications of Death Benefit & Cash Value
Reinstatement provision
Insurance contract characteristics (1 of 2)
6. Same as WL but w/ adjustable death benefit (& corresponding premium) & over-fund option but w/ annually renewable term (ART).
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Types of Insurers (by sector)
Cost of Living Adjustment (COLA) Disability rider
Residual disability rider
7. Same as WL but premium low for set # yrs. - THEN premiums vary (+ or -) based on Insurer's investment returns - w/ Gmax.
Premium modes
Indeterminate Premium Whole Life policy
Concealment exceptions
Comprehensive Major Medical plan
8. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.
Tax implications of an Estate
Insurable interest
Family Maintenance policy
Juvenile Life (aka Jumping Juvenile) policy
9. Req. by CA statute & may provide workers coverage for action-over claims.
Policy loans
Employer Liability
Insurer (as defined by CIC)
Concealment exceptions
10. Provides coverage for specific disease(s) - such as cancer or leukemia.
Dread Disease policy
Plans A-L of Medical Supplement or Medigap
Types of Term Life policies
Family or Dependents rider
11. Same as WL but w/ Decreasing Term rider; upon death - pays monthly income for REMAINING term AFTER which pays full death benefit.
Family Income policy
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Dividend options
Human Life Value approach
12. Benefits automatically increase annually based on inflationary index (i.e. Consumer Price Index) OR flat rate (5% max.).
Types of Agency Authority
Rehabilitation rider
Suicide clause/provision
Cost of Living Adjustment (COLA) Disability rider
13. Conditional - coverage is conditional; Personal - parties are people; Good faith - honesty/integrity; Fiduciary - req's financial trust.
Claim Form (aka Proof of Loss Form) provision
Medicaid/Medi-Cal
Insurance contract characteristics (2 of 2)
Peril vs. Hazard
14. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.
Valid life insurance contracts must identify...
Claim Form (aka Proof of Loss Form) provision
Supplemental Major Medical plan
Payment of Premium provision
15. Govt. organization providing health care benefits for dependents of military personnel.
Concealment
Dependent coverage
CHAMPUS (aka TriCare)
Suicide clause/provision
16. Prepaid med. benefits for members ONLY w/ approved primary care M.D. (HMO employee); focus on preventative care; low co-pay.
Types of Insurers (by sector)
Misstatement of Age/Sex provision
Policy delivery
Health Maintenance Organization (HMO)
17. Group plan initially self-funded by employer (like SIR); after which - group plan Insurer covers (up to policy limit); requires TPA.
Settlement options for Life policy (2 of 2)
Employer-Administered plan
7 Pay Test
Family Income policy
18. Grows @ fixed interest rate for set term but cash value may adjust to prevailing rate (+ or -) if fully surrendered before term ends; % w/drawal ok.
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Blue Cross/Blue Shield
1035 Exchange
Market Value Adjusted (aka Modified Guaranteed) annuity
19. Provides disability income during surgery recovery from life-threatening condition (& sometimes cosmetic surgery).
Common Life Exclusions
Payor (aka Waiver of Payor's Premium) rider
Transplant/Cosmetic Surgery rider
CA Work. Comp. Statutes
20. Expands individual WL policy to include Term Life for dependents (spouse - children - etc.).
Medicare
Insurability Type Conditional receipt
Tax implications of an Annuity (1 of 2)
Family or Dependents rider
21. Tendency of poorer risks to seek insurance.
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Adverse selection
Tax implications of Disability policy
Retrocession
22. Dependent children are covered until 19 or 23 (full-time student only) or until self-sufficient (if handicapped).
Dependent coverage
Change of Occupation provision
Needs approach (most common)
Family or Dependents rider
23. Provides hospital insurance automatically @ age 65 (if FICA qualified) @ no fee but may have deductible & co-pay.
Long Term Care (LTC) policy
Types of hazards
Renewability provision
Medicare Part A (aka Hospital Insurance or HI)
24. Insurance purchased by other Insurer(s) to spread or diversify risk; promotes industry stability.
Types of reinsurance
Reinsurance
Types of Insurers (by ownership)
Civil Rights/Pregnancy Discrimination Act
25. Fixed premium w/ guaranteed min. death benefit that may increase due to higher than expected investment returns.
Beneficiary provisions
Insurance contract characteristics (2 of 2)
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Variable Life policy (2 of 2)
26. Excludes coverage for specific injury/illness either temporarily or permanently in order to eliminate pre-existing condition.
Impairment (Exclusion) rider
Cash value
Accidental Death & Dismemberment (AD&D) Life policy
Accidental Death (aka Multiple Indemnity) rider
27. 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.
Tax implications of Disability policy
Plans A-L of Medical Supplement or Medigap
Convertibility provision
Notice of Claim provision
28. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.
Change of Occupation provision
Types of Agency Authority
Cross Purchase Plan
Revocable vs. Irrevocable beneficiary
29. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.
Earned vs. Unearned premium
Insuring clause/provision (aka Insuring Agreement)
Primary Insurance Amount (PIA)
Juvenile Life (aka Jumping Juvenile) policy
30. Allows for Term policy renewal @ higher premium w/out medical exam; guarantees insurability; based on actual/attained age.
Workers' Compensation insurance
Business Overhead Expense (BOE) Disability policy
Renewability provision
Medical cost containment (aka Managed care)
31. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.
Renewability provision
Cost of Living Adjustment (COLA) Life rider
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Automatic Premium Loan (APL) provision
32. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Tax implications of Dividends - Loans & Interest
Accidental Death & Dismemberment (AD&D) Life policy
Trial Application (aka Request for Offer)
Modified Premium Whole Life policy
33. Basic Medical; Major Medical; Comprehensive Major Medical
Health Insurance Portability and Accountability Act (HIPAA)
Cross Purchase Plan
Departments of an Insurer
Types of Medical Plans
34. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.
Non-Occupational Disability policy
Insurer (as defined by CIC)
Levels of Long Term Care provided
Occupational Disability policy
35. Process whereby a reinsurer reinsures w/ another reinsurer.
Premium modes
Retrocession
Trusts
Endowment Life policy
36. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.
Dental Plan
Return of Premium rider
Free Look provision
Annuity Classifications (5 of 5): # of lives
37. Agents - represent Insurer; Brokers - represent themselves & Insured; Solicitors - represent one agent to solicit leads.
Exclusions to Work. Comp.
Types of Licensed Producers
Fraud
Medical Savings Account (MSA) & Health Savings Account (HSA)
38. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).
Medicare Part A & B "Gaps"
Group Disability plan
Types of Insurers (by ownership)
1035 Exchange
39. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.
Relation of Earnings to Insurance provision
Market Value Adjusted (aka Modified Guaranteed) annuity
Comprehensive Major Medical plan
Dental Plan
40. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.
Life insurance policy
Parole Pardon Rule
Whole (aka Permanent or Straight) Life policy
Trial Application (aka Request for Offer)
41. 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.
Considerations in replacing Health insurance
Insurability Type Conditional receipt
Types of Term Life policies
Tax implications of Disability policy
42. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.
Family or Dependents rider
Flexible Spending Account (FSA)
Peril vs. Hazard
Long Term Care (LTC) policy
43. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.
Premium modes
1035 Exchange
Types of Renewability provisions
Employer Liability
44. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.
Equity Indexed annuity
Premium modes
Trial Application (aka Request for Offer)
Employer Liability
45. 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.
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Small Employer Medical Expense plan
Family or Dependents rider
Plans A-L of Medical Supplement or Medigap
46. Combination of Basic Medical & Major Medical in one policy; Basic pays 1st - then Major Medical w/ corridor deductible.
Policy loans
Comprehensive Major Medical plan
Renewability provision
Conformity with State Statute provision
47. A lapsed policy may be reinstated if not longer than 3-5 yrs. - & proof of insurability re-established - & back premiums + interest paid.
Tax implications of an Estate
Earned vs. Unearned premium
Reinstatement provision
Annuity
48. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).
Occupational Disability policy
Total disability (as commonly defined)
Types of Insurers (by authorization)
Risk management
49. Prepaid med. benefits for members w/ approved primary care M.D. (independent); low co-pay; non-PPO M.D. can be used at higher cost.
Suicide clause/provision
Insurance contract characteristics (2 of 2)
Preferred Provider Organization (PPO)
Dependent coverage
50. 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.
Dividends
Return of Premium rider
Age Discrimination in Employment Act (ADEA)
Tax implications of an Estate
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