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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. A company providing lump sum buyout (50-90% of total) of Life policy; becomes owner & beneficiary & assumes premium payments; usually terminally ill viator.
Viatical Settlement Provider (VSP)
Pure risk vs. Speculative risk
Experience vs. Community rating in Group Health plan
Total disability (any-occupational definition)
2. Refund of 50-80% of premium (minus claims paid) every 5-10 yrs. OR age 65; expensive!
Rehabilitation rider
Types of Insurers (by ownership)
Return of Premium rider
Medicare Part B (aka Supplemental Medical Insurance or SMI)
3. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.
Cash value
Insurance contract characteristics (1 of 2)
Types of Insurers (by sector)
Human Life Value approach
4. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.
Elements to contract
Misstatement of Age/Sex provision
Types of Renewability provisions
Binding receipt (aka Temporary Insurance Agreement)
5. Same as WL but w/ Level Term rider; upon death - pays monthly income for FULL term AFTER which pays full death benefit.
Life insurance policy
Family Maintenance policy
Loss of Earnings Test
Rescission
6. Savings account for medical expenses; Tax-deductible contributions; tax-deferred growth; tax-free for qualified use; taxable for non-qualified use.
Insuring clause/provision (aka Insuring Agreement)
Concealment exceptions
Common Disability Exclusions
Medical Savings Account (MSA) & Health Savings Account (HSA)
7. An attempt to contain costs by employing various strategies - including wellness programs - preventative testing - outpatient & alternative procedures.
Medical cost containment (aka Managed care)
Plans A-L of Medical Supplement or Medigap
Fraud
Tax implications of Dividends - Loans & Interest
8. Unintentional - up to $1 -000 + legal $; Intentional - $1 -000-5 -000 + legal $; If harmful - misdemeanor + up to 1 yr. prison + up to $10 -000.
Penalties for violating AIDS/HIV privacy laws
Legal Action provision
Insurability Type Conditional receipt
Permanent vs. Temporary disability
9. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.
Annuity
Variable Life policy (1 of 2)
Underwriting risk categories
Consolidated Omnibus Budget Reconciliation Act (COBRA)
10. Receipt whereby coverage incepts ONLY after underwriting approval.
Non-forfeiture options for WL policy
Residual disability rider
Approval Type Conditional receipt
Viatical Settlement Provider (VSP)
11. 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.
Elimination (aka Waiting) period
Market Value Adjusted (aka Modified Guaranteed) annuity
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Conformity with State Statute provision
12. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).
Major Medical plan
Insurability Type Conditional receipt
Business Continuation (aka Buy-Sell) Disability policy
Common Disability Exclusions
13. Allows policy owner to w/draw set % of death benefit upon verification of terminal illness w/ expectancy 12-24 mths.; generally tax-free.
Grace Period provision
Requirements to sell variable life products
Point of Service plan
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
14. 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
Insurability Type Conditional receipt
Graded Premium Whole Life policy
Earned vs. Unearned premium
15. Federally-funded but state-run program for truly indigent individuals & families providing medical care at Federal clinic.
Medical Savings Account (MSA) & Health Savings Account (HSA)
Medicaid/Medi-Cal
Earned vs. Unearned premium
Rehabilitation rider
16. Policy provisions must conform to state regulations where policy is sold.
Grace Period provision
Retrocession
Credit Life policy
Conformity with State Statute provision
17. No-charge annuity w/drawals allowed up to 10% of total - THEN penalized on sliding scale based on # policy yrs.; conditionally waived.
Family Maintenance policy
Annuity surrender charges
Indeterminate Premium Whole Life policy
Permanent vs. Temporary disability
18. Pre-existing illness/injury; Waiting period; Elimination period; Probationary period; Benefits - Exclusions - Limitations; Underwriting reqs.
Cash value
Settlement options for Life policy (2 of 2)
Considerations in replacing Health insurance
Total disability (as commonly defined)
19. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.
Current Assumption (aka Interest-Sensitive) Whole Life policy
Total disability (any-occupational definition)
Non-Occupational Disability policy
Joint Life (aka "First to die") policy
20. Same as WL but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Equity Indexed annuity
Pure risk vs. Speculative risk
Variable Life policy (1 of 2)
Long Term Care (LTC) policy
21. Temp. coverage for set duration w/ death benefit ONLY (no cash value) - offers largest $ for lowest premium; renewable; convertible.
Dental Plan
Group Disability plan
Types of Renewability provisions
Term Life policy
22. Must be delivered in person or by certified - registered or 1st-class mail w/ signature - unless waived by Insurance Commissioner.
Policy delivery
Beneficiary provisions
Single Pay Whole Life policy
Health Insurance Portability and Accountability Act (HIPAA)
23. Mortality is the statistical possibility of death @ each age. Morbidity is the statistical possibility & extent of disability @ each age.
Insuring clause/provision (aka Insuring Agreement)
Risk management
Mortality vs. Morbidity tables
Experience vs. Community rating in Group Health plan
24. Benefits automatically increase annually based on inflationary index (i.e. Consumer Price Index) OR flat rate (5% max.).
Medicare
Cost of Living Adjustment (COLA) Disability rider
Annuity Classifications (1 of 5): How premium is paid
Payment of Premium provision
25. Same as WL but w/ Decreasing Term rider; upon death - pays monthly income for REMAINING term AFTER which pays full death benefit.
Notice of Claim provision
Medicare Part A & B "Gaps"
Family Income policy
Types of Accident & Health insurance
26. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.
Return of Premium rider
Rescission
Underwriting risk categories
Types of Agency Authority
27. Compensates business for loss due to disability of key employee; premiums not deductible but benefits tax-free.
Palliative vs. Curative care
Medicare Part D
Key Employee Disability policy
Single Pay Whole Life policy
28. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.
Occupational Disability policy
Exclusions to Work. Comp.
Needs approach (most common)
Levels of Long Term Care provided
29. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.
Palliative vs. Curative care
Business Continuation (aka Buy-Sell) Disability policy
Cash value
Annuity Classifications (2 of 5): When benefits begin
30. Waives premium upon disability of Insured until return to work; disability must persist for 6 mths. or longer. Cash value & dividends not affected.
Waiver of Premium (Waiver of Cost of Insurance) rider
Types of Insurers (miscellaneous)
Variable Universal Life policy
Relation of Earnings to Insurance provision
31. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.
Modified Endowment Contract (MEC)
Disability Income policy
Claim Form (aka Proof of Loss Form) provision
Indemnify
32. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.
Palliative vs. Curative care
Types of Insurers (miscellaneous)
7 Pay Test
Total disability (as commonly defined)
33. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.
Tax implications of medical plans
Medicare Supplement or Medigap policy
Equity Index Whole Life policy
Survivorship (aka "Last to die") policy
34. Provides disability income during surgery recovery from life-threatening condition (& sometimes cosmetic surgery).
Transplant/Cosmetic Surgery rider
Trusts
Family Maintenance policy
Family or Dependents rider
35. Provides coverage for specific disease(s) - such as cancer or leukemia.
Types of reinsurance
Suicide clause/provision
Incontestability clause/provision
Dread Disease policy
36. 1: parties to contract; 2: insured party or life; 3: insurable interest - if 3rd party; 4: risks insured against; 5: policy period (term); 6: premium & mode.
Dread Disease policy
Insurance contract characteristics (1 of 2)
Equity Indexed annuity
Valid life insurance contracts must identify...
37. War - 2 types; Suicide (1st 2 yrs.); Aviation (non-commercial); Hazardous hobbies; Criminal acts; Alcohol/Drug influenced.
Common Disaster (Simultaneous Death Act) clause/provision
Total disability (more restrictive definition)
Common Life Exclusions
Risk management
38. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.
Free Look provision
Types of Accident & Health (A&H) providers
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Convertibility provision
39. 'The inability to perform your OWN normal occupation or daily duties'.
Dread Disease policy
Blue Cross/Blue Shield
Types of reinsurance
Total disability (as commonly defined)
40. Two death benefit options - Option A: death benefit ONLY; Option B: death benefit + cash value; death benefit NOT guaranteed.
Automatic Premium Loan (APL) provision
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Notice of Claim provision
Needs approach (most common)
41. Provides medical & personal services for people needing extended assistance w/ Activities of Daily Living (ADL). Other benefits include: assisted living care; respite care; hospice care; adult day care.
Long Term Care (LTC) policy
Exclusions to Work. Comp.
Loss of Earnings Test
Medicare Part A (aka Hospital Insurance or HI)
42. 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.
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Business Overhead Expense (BOE) Disability policy
Law of Large Numbers
Beneficiary provisions
43. Receipt whereby coverage incepts immediately upon submission of full consideration - unless declined & premium refunded.
Accidental Death & Dismemberment (AD&D) Disability rider
Accidental Death & Dismemberment (AD&D) Life policy
Types of Insurers (by ownership)
Binding receipt (aka Temporary Insurance Agreement)
44. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.
Mortality vs. Morbidity tables
Employee Retirement Income Security Act (ERISA)
Single Pay Whole Life policy
CHAMPUS (aka TriCare)
45. Death benefit determined by Insured's financial goals & needs (minus assets).
Cost of Living Adjustment (COLA) Disability rider
Types of Term Life policies
Common Life Exclusions
Needs approach (most common)
46. Basic Medical; Major Medical; Comprehensive Major Medical
Major Medical plan
Survivorship (aka "Last to die") policy
Types of Medical Plans
Dividend options
47. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Group Disability plan
Total disability (as commonly defined)
Types of Agency Authority
Current Assumption (aka Interest-Sensitive) Whole Life policy
48. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.
Non-forfeiture options for WL policy
Tax implications of an Annuity (1 of 2)
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Enhanced Ordinary (aka Extraordinary) Whole Life policy
49. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.
Adverse selection
IRS Penalties for Annuities
Misstatement of Age/Sex provision
Risk management
50. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.
Equity Index Whole Life policy
Variable Life policy (1 of 2)
Health Reimbursement Account (HRA)
Elimination (aka Waiting) period