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






2. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.






3. Receipt whereby coverage incepts conditionally upon submission of full consideration and that all underwriting reqs. are met.






4. Part A - Inpatient hospital deductibles vary on # of days; limited reserve days; finite benefit; 1st 3 pints blood; Part B - 20% co-payment.






5. Process which prevents claim denial as a result of false statement or promise (made by Insurer) - which was relied upon by Insured.






6. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.






7. No deductible coverage for: daily room/board; ancillary costs; surgeon &/or physician expense (for added premium).






8. Provides hospital insurance automatically @ age 65 (if FICA qualified) @ no fee but may have deductible & co-pay.






9. 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;






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






11. Identical to Incontestable Clause in Life policy.






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






13. 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.






14. Provides 24 hr. health coverage both "on" & "off" job - but may cause coverage duplication & coordination challenges.






15. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.






16. Peril is the CAUSE of loss. Hazard is a condition that increases LIKELIHOOD of loss.






17. Same as Term Life but provides living benefit (endowment) to policy owner if Insured survives entire term.






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






19. 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.






20. Domestic - within home state; Foreign - outside home state; Alien - outside home country.






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






22. Prepaid med. benefits for members ONLY w/ approved primary care M.D. (HMO employee); focus on preventative care; low co-pay.






23. Unilateral - Insurer provides contract; Adhesion - parties must adhere to terms; Aleatory - benefits may not inure equally.






24. 4: Funds retained by Insurer until w/drawn - interest ONLY paid monthly (taxable); 5: Paid-up immediate annuity.






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






26. Death benefit determined by Insured's projected lost earnings potential.






27. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.






28. Conditional - coverage is conditional; Personal - parties are people; Good faith - honesty/integrity; Fiduciary - req's financial trust.






29. Plan A is the CORE benefit & is least expensive; All other plans include Plan A + additional benefits. Plans F & J are high deductible. K & L are both deductible & co-pay plans.






30. Pre-existing illness/injury; Waiting period; Elimination period; Probationary period; Benefits - Exclusions - Limitations; Underwriting reqs.






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






32. Agents - represent Insurer; Brokers - represent themselves & Insured; Solicitors - represent one agent to solicit leads.






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






34. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).






35. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.






36. 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.






37. Policy must be delivered w/ original (or copy of same) application attached.






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






39. Treating or mitigating loss exposures through 1: avoidance; 2: retention (deductibles); 3: sharing; 4: reduction; or 5: transfer.






40. PURELY employer-funded account to reimburse employees for qualified medical expenses not covered by group health plan.






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






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






43. Beneficiary has right to leave death benefits / Insurer to protect $ from creditors; interest (taxable) paid on retained funds.






44. 1: Cash (tax-free); 2: Apply to future premiums; 3: Retained by Insurer @ interest; 4: Buy Paid-up WL policy add-ons; 5: Pay-up existing policy; 6: Buy 1-yr. Term policy.






45. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.






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






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






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






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






50. Federal law to protect Federal employees' (& their beneficiaries') pension - group insurance - & welfare benefits.