Test your basic knowledge |

CA Life Agent Exam

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. 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






2. Fraternal - non-profit - members only; Reciprocal - unincorp'd org. - members insure each other; Lloyd's Assoc. - groups sharing risks; Surplus lines - special market risks.






3. Both Contributory & Non-contributory Group policies are deductible to employer (not employee) but benefits are taxable. Individual policy premium is NOT deductible but benefit is received tax-free.






4. Benefits automatically increase annually based on inflationary index (i.e. Consumer Price Index) OR flat rate (5% max.).






5. Allows Insured to increase death benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age.






6. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.






7. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.






8. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.






9. Responsible adult trustee designated to manage death benefits for minor child beneficiary until adulthood.






10. Coverage remains in effect for 31 days past premium due date; benefits paid during grace period would be deducted from sum.






11. Death benefit determined by Insured's financial goals & needs (minus assets).






12. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.






13. Non-qualified Annuity - Non-deductible contributions & tax-deferred growth. At pay-out - tax-free principal but taxable growth.






14. Period of time following any children's survivor benefit & before benefits are provided to employee's widow/widower.






15. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.






16. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.






17. Receipt whereby coverage incepts ONLY after underwriting approval.






18. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.






19. Guaranteed min. interest rate on cash value buildup but possible higher rate if short-term investment returns higher than expected.






20. 4: Funds retained by Insurer until w/drawn - interest ONLY paid monthly (taxable); 5: Paid-up immediate annuity.






21. Tendency of poorer risks to seek insurance.






22. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.






23. Price of insurance per exposure unit.






24. Temp. coverage for set duration w/ death benefit ONLY (no cash value) - offers largest $ for lowest premium; renewable; convertible.






25. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.






26. Upon death - death benefit is paid + the aggregate of premiums paid to date; add-on to Term policy ONLY.






27. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.






28. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).






29. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.






30. Must be delivered in person or by certified - registered or 1st-class mail w/ signature - unless waived by Insurance Commissioner.






31. 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).






32. Private sector (Commercial) - provides LA&H - P&C - & LTC; Public sector (Gov't) - provides flood - work. comp. - Medicare/Medicaid - Group Life (SGLI/FEGLI).






33. Privately-provided or Medicare-provided (if no private carrier) prescription drug plans for qualified individuals but w/ premium - deductible & co-pay.






34. Prepaid med. benefits for "subscribers" @ approved facilities; many non-profit; Blue Cross - Hospital stays; Blue Shield - M.D. costs.






35. War; elective cosmetic surgery; routine dental; work. comp.-covered claims; self-inflicted (intentional); gov't. facility treatment; LTC; private nursing.






36. No coverage for injuries while: 1: @ voluntary social event; 2: self-inflicted (intentional); 3: under alcohol/drug influence; 4: committing criminal act; 5: aggressor in workplace fight; 6: participating in athletic event (non-pro. athletes) 7: par






37. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.






38. Same as WL but w/ Decreasing Term rider; upon death - pays monthly income for REMAINING term AFTER which pays full death benefit.






39. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.






40. Reappearance of disability w/in 6 mth. period after "recovery" from same disability is considered recurrence - not new disability.






41. Same as WL but premium low for 1st 5 yrs. - THEN has annual premium increases for set # yrs. - THEN level premium.






42. 1: Tax-free lump sum; 2: Monthly pay-outs for fixed time; 3: Fixed monthly payments until depleted.






43. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.






44. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.






45. Death benefit is NOT taxable. Cash value grows tax-deferred but cost basis (base premium) is not taxable - only interest is.






46. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.






47. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).






48. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).






49. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.






50. Same as WL but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.