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. Earned premium is $ paid for coverage to date. Unearned premium is $ paid & returnable due to coverage not provided.






2. Policy owner must notify Insurer of loss either in writing - in person or by phone w/in 20 days.






3. 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.






4. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.






5. 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.






6. Savings account for medical expenses; Tax-deductible contributions; tax-deferred growth; tax-free for qualified use; taxable for non-qualified use.






7. Mandatory 100% employer-funded coverage for injuries/illnesses occurring "on" job; full-time employees only; exclusive remedy. Provides: 1: unlimited medical benefit; 2: survivor income replacement & funeral ($5 -000 max.); 3: disability benefit @ 66

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8. Type of partial disability rider - which pays fluctuating % of lost income w/out time limit.






9. Qualified Annuity - Tax-deductible contributions & tax-deferred growth but fully taxable w/drawals.






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






11. Upon death - death benefit is paid + the aggregate of cash value accumulated to date; add-on to WL policy ONLY.






12. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).






13. Price of insurance per exposure unit.






14. Grows @ fixed min. interest rate but w/ possible higher rate tied to equity index (i.e S&P Equity Index) appreciation; gains shared w/ Insurer.






15. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.






16. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.






17. Allows policy owner to w/draw set % of death benefit upon verification of terminal illness w/ expectancy 12-24 mths.; generally tax-free.






18. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.






19. The state in which the contract is accepted or delivered is the state that possesses regulatory jurisdiction over Group plan.






20. Intentional deception; grounds for rescission.






21. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.






22. 'The inability to perform your OWN normal occupation or daily duties'.






23. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.






24. Excludes coverage for specific injury/illness either temporarily or permanently in order to eliminate pre-existing condition.






25. Available for any reason up to full cash value @ fixed (max 8%) OR variable interest rate; loan $ + interest deducted from benefit @ death.






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






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






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






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






30. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.






31. Primary - if 2 or more - equally shared; Contingent (Secondary) - only if primary dead; Tertiary - only if both primary & secondary dead. If none listed - goes to estate.






32. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").






33. Same as WL but w/ adjustable death benefit (& corresponding premium) & over-fund option but w/ annually renewable term (ART).






34. Tendency of poorer risks to seek insurance.






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






36. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).






37. 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.






38. A company providing lump sum buyout (50-90% of total) of Life policy; becomes owner & beneficiary & assumes premium payments; usually terminally ill viator.






39. Facultative - case by case agreements; Automatic/Treaty - automatic acceptance of risk percentage per previous agreement.






40. Process whereby a reinsurer reinsures w/ another reinsurer.






41. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.






42. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.






43. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.






44. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.






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






46. Provides % of monthly income benefit if Insured becomes disabled due to illness or accident.






47. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.






48. Compensates business for loss due to disability of key employee; premiums not deductible but benefits tax-free.






49. Mortality is the statistical possibility of death @ each age. Morbidity is the statistical possibility & extent of disability @ each age.






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.