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Test your basic knowledge |
CA Life Agent Exam
Start Test
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. Intentional deception; grounds for rescission.
Total disability (as commonly defined)
Health Maintenance Organization (HMO)
Fraud
Misstatement of Age/Sex provision
2. Excludes coverage for suicide during 1st 2 yrs. ONLY but - if it does - all premiums must be returned to beneficiary.
Endowment Life policy
Suicide clause/provision
Medicaid/Medi-Cal
Types of Medical Plans
3. No deductible coverage for: daily room/board; ancillary costs; surgeon &/or physician expense (for added premium).
Departments of an Insurer
Non-Occupational Disability policy
Basic Medical plan
Medicare Supplement or Medigap policy
4. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.
Palliative vs. Curative care
Loss exposure
Factors that determine premium
Reinstatement provision
5. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.
Insurable interest
Departments of an Insurer
Errors & Omissions (E&O)
Payor (aka Waiver of Payor's Premium) rider
6. 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.
Family Maintenance policy
Small Employer Medical Expense plan
Family or Dependents rider
Common Life Exclusions
7. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.
Rescission
Medicare Part C (aka Medicare Advantage)
Equity Indexed annuity
Departments of an Insurer
8. 1: Req. - unless self-employed; 2: 7-day wait for disability benefits; 3: Premium based on ex-mod; 4: Rates approved by CDI; 5: to sell - must satisfy education reqs.
CA Work. Comp. Statutes
Employer Liability
Claim Form (aka Proof of Loss Form) provision
Business Overhead Expense (BOE) Disability policy
9. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.
Types of Accident & Health (A&H) providers
Time Limit on Certain Defenses provision
Exclusions for Major Medical plan
Civil Rights/Pregnancy Discrimination Act
10. 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.
Policy delivery
Recurrent disability clause/provision
Tax implications of Dividends - Loans & Interest
Dividend options
11. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.
Medicare
Time Limit on Certain Defenses provision
IRS Penalties for Annuities
Revocable vs. Irrevocable beneficiary
12. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.
Family Maintenance policy
Types of Renewability provisions
Concealment exceptions
Total disability (any-occupational definition)
13. Prepaid med. benefits for "subscribers" @ approved facilities; many non-profit; Blue Cross - Hospital stays; Blue Shield - M.D. costs.
Blue Cross/Blue Shield
Pure risk vs. Speculative risk
Types of Term Life policies
Limited Pay Whole Life policy
14. 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
Disability Income policy
Endowment Life policy
Proof of Loss provision
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
15. Same as WL but w/ Level Term rider; upon death - pays monthly income for FULL term AFTER which pays full death benefit.
Business Continuation (aka Buy-Sell) policy
Family Maintenance policy
Tax implications of Dividends - Loans & Interest
Indeterminate Premium Whole Life policy
16. Mortality is the statistical possibility of death @ each age. Morbidity is the statistical possibility & extent of disability @ each age.
Accidental Death & Dismemberment (AD&D) Disability rider
Family Maintenance policy
Blackout Period
Mortality vs. Morbidity tables
17. Temp. coverage for set duration w/ death benefit ONLY (no cash value) - offers largest $ for lowest premium; renewable; convertible.
Dental Plan
Current Assumption (aka Interest-Sensitive) Whole Life policy
Term Life policy
Misstatement of Age/Sex provision
18. 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
Parole Pardon Rule
Exclusions to Work. Comp.
COBRA Time Limitations
Claim Form (aka Proof of Loss Form) provision
19. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Preferred Provider Organization (PPO)
Group Disability plan
Types of Insurers (by authorization)
Waiver of Premium provision
20. Federally-funded but state-run program for truly indigent individuals & families providing medical care at Federal clinic.
Major Medical plan
Medicaid/Medi-Cal
Total disability (as commonly defined)
Business Overhead Expense (BOE) Disability policy
21. Coverage for catastrophic loss w/ high limits - front end deductible; co-insurance (80/20%); blanket coverage; stop loss max.
Types of Insurers (by authorization)
Major Medical plan
Settlement options for Life policy (1 of 2)
Types of Insurers (by sector)
22. Conditional - coverage is conditional; Personal - parties are people; Good faith - honesty/integrity; Fiduciary - req's financial trust.
Insurance contract characteristics (2 of 2)
Dental Plan
Misstatement of Age/Sex provision
Types of Agency Authority
23. 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.
Insurance contract characteristics (2 of 2)
Equity Indexed annuity
IRS Penalties for Annuities
Preferred Provider Organization (PPO)
24. Permanent disability due to total loss of sight - hearing - speech or use of 2 + limbs; benefits paid even while continuing to work.
Family Income policy
Equity Indexed annuity
Presumptive disability
Basic Medical plan
25. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.
Peril vs. Hazard
Retrocession
Small Employer Medical Expense plan
Trial Application (aka Request for Offer)
26. Covers disabilities occurring both "on" AND "off" job; "on" job benefits paid in addition to work. comp. - if applicable (i.e. individual plan).
7 Pay Test
Doctrine of Comity
Occupational Disability policy
Total disability (any-occupational definition)
27. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).
Types of Agency Authority
Non-forfeiture options for WL policy
Human Life Value approach
Loss of Earnings Test
28. 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.
Convertibility provision
Recurrent disability clause/provision
Valid life insurance contracts must identify...
Medical Savings Account (MSA) & Health Savings Account (HSA)
29. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Residual disability rider
Accidental Death & Dismemberment (AD&D) Disability rider
Employer-Administered plan
Types of Licensed Producers
30. 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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31. 'The inability to perform ANY reasonable occupation based on education - training or experience'.
Total disability (more restrictive definition)
Settlement options for Life policy (1 of 2)
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Types of Insurers (by domicile)
32. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.
Palliative vs. Curative care
Annuity
Approval Type Conditional receipt
Notice of Claim provision
33. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.
Endowment Life policy
Insuring clause/provision (aka Insuring Agreement)
Blue Cross/Blue Shield
Common Life Exclusions
34. Death benefit determined by Insured's financial goals & needs (minus assets).
Employee Retirement Income Security Act (ERISA)
Health Insurance Portability and Accountability Act (HIPAA)
Accidental Death & Dismemberment (AD&D) Life policy
Needs approach (most common)
35. Federally-sponsored health care for individuals 65+ &/or w/ certain disabilities; may run concurrent w/ group plan but group plan would act primary - THEN Medicare.
Factors that determine premium
Medicare
Settlement options for Life policy (1 of 2)
Dental Plan
36. Guaranteed min. interest rate on cash value buildup but possible higher rate if short-term investment returns higher than expected.
Types of Renewability provisions
Tax implications of Dividends - Loans & Interest
Elements to contract
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
37. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.
Single Pay Whole Life policy
Peril vs. Hazard
Annuity Classifications (5 of 5): # of lives
Modified Premium Whole Life policy
38. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.
Tax implications of an Estate
Common Accident provision
Risk management
Types of reinsurance
39. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.
Business Continuation (aka Buy-Sell) Disability policy
Tax implications of Death Benefit & Cash Value
Proof of Loss provision
Equity Indexed annuity
40. Unilateral - Insurer provides contract; Adhesion - parties must adhere to terms; Aleatory - benefits may not inure equally.
Insurance contract characteristics (1 of 2)
Tax implications of Dividends - Loans & Interest
Dividend options
Notice of Claim provision
41. 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.
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Preferred Provider Organization (PPO)
Types of Insurers (by sector)
Risk management
42. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Types of Insurers (by sector)
Accidental Death & Dismemberment (AD&D) Life policy
Key Employee Disability policy
Enhanced Ordinary (aka Extraordinary) Whole Life policy
43. Receipt whereby coverage incepts conditionally upon submission of full consideration and that all underwriting reqs. are met.
Incontestability clause/provision
Renewability provision
Insurability Type Conditional receipt
Adjustable Whole Life policy
44. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.
Dependent coverage
Conformity with State Statute provision
Life insurance policy
Exclusions to Work. Comp.
45. Domestic - within home state; Foreign - outside home state; Alien - outside home country.
Equity Index Whole Life policy
Business Overhead Expense (BOE) Disability policy
Types of Insurers (by domicile)
Policy loans
46. A lapsed policy may be reinstated if not longer than 3-5 yrs. - & proof of insurability re-established - & back premiums + interest paid.
Types of Insurers (by ownership)
Social Security Benefit (Supplement) rider
Reinstatement provision
CHAMPUS (aka TriCare)
47. Policy owner must notify Insurer of loss either in writing - in person or by phone w/in 20 days.
Approval Type Conditional receipt
Basic Medical plan
Notice of Claim provision
Entire Contract provision
48. Excludes coverage for specific injury/illness either temporarily or permanently in order to eliminate pre-existing condition.
Types of Medical Plans
Impairment (Exclusion) rider
Waiver of Premium (Waiver of Cost of Insurance) rider
Whole (aka Permanent or Straight) Life policy
49. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.
Estoppel
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Types of Insurers (by sector)
Common Disability Exclusions
50. Provides for continued operation of business if partner dies - by allowing surviving partner(s) to buy deceased partner's interest in business.
Business Continuation (aka Buy-Sell) policy
Graded Premium Whole Life policy
Permanent vs. Temporary disability
Key Employee policy