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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. War; elective cosmetic surgery; routine dental; work. comp.-covered claims; self-inflicted (intentional); gov't. facility treatment; LTC; private nursing.
Variable Life policy (2 of 2)
Exclusions for Major Medical plan
Departments of an Insurer
Total disability (more restrictive definition)
2. Waives premium on Life policy for minor child until age 21 in event premium payor dies or becomes disabled.
3. Disability policy rider covering "the inability to perform some - but not all of your duties"; pays max. 50% of disability benefit for up to 6 mths.
Accidental Death (aka Multiple Indemnity) rider
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Suicide clause/provision
Partial disability rider
4. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.
Automatic Premium Loan (APL) provision
CA Work. Comp. Statutes
Civil Rights/Pregnancy Discrimination Act
Juvenile Life (aka Jumping Juvenile) policy
5. Excludes coverage for specific injury/illness either temporarily or permanently in order to eliminate pre-existing condition.
Impairment (Exclusion) rider
Needs approach (most common)
Market Value Adjusted (aka Modified Guaranteed) annuity
Concealment exceptions
6. Non-qualified Annuity - Non-deductible contributions & tax-deferred growth. At pay-out - tax-free principal but taxable growth.
Binding receipt (aka Temporary Insurance Agreement)
Primary Insurance Amount (PIA)
Tax implications of an Annuity (1 of 2)
Retrocession
7. Combination of Basic Medical & Major Medical in one policy; Basic pays 1st - then Major Medical w/ corridor deductible.
Comprehensive Major Medical plan
Key Employee Disability policy
Return of Premium rider
Disability Income policy
8. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.
Annuity Classifications (3 of 5): Source of income
Impairment (Exclusion) rider
Permanent vs. Temporary disability
Tax implications of an Estate
9. Conditional - coverage is conditional; Personal - parties are people; Good faith - honesty/integrity; Fiduciary - req's financial trust.
Flexible Spending Account (FSA)
Insurance contract characteristics (2 of 2)
Approval Type Conditional receipt
Trusts
10. Identical to Incontestable Clause in Life policy.
Variable Life policy (2 of 2)
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Time Limit on Certain Defenses provision
Medicare Part B (aka Supplemental Medical Insurance or SMI)
11. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Underwriting risk categories
Medicare Supplement or Medigap policy
Relation of Earnings to Insurance provision
Accidental Death & Dismemberment (AD&D) Disability rider
12. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.
Automatic Premium Loan (APL) provision
Policy loans
Blue Cross/Blue Shield
Fraud
13. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.
Approval Type Conditional receipt
Payor (aka Waiver of Payor's Premium) rider
Non-forfeiture options for WL policy
Revocable vs. Irrevocable beneficiary
14. 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.
Small Employer Medical Expense plan
Tax implications of Disability policy
Indeterminate Premium Whole Life policy
Elements to contract
15. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.
Variable Life policy (1 of 2)
Return of Cash Value rider
Dependent coverage
Experience vs. Community rating in Group Health plan
16. Tendency of poorer risks to seek insurance.
Non-Occupational Disability policy
Adverse selection
Dread Disease policy
Presumptive disability
17. An attempt to contain costs by employing various strategies - including wellness programs - preventative testing - outpatient & alternative procedures.
Annuity Classifications (1 of 5): How premium is paid
Medical cost containment (aka Managed care)
Permanent vs. Temporary disability
Cost of Living Adjustment (COLA) Disability rider
18. Policy owner must notify Insurer of loss either in writing - in person or by phone w/in 20 days.
Notice of Claim provision
Tax implications of Dividends - Loans & Interest
Presumptive disability
Civil Rights/Pregnancy Discrimination Act
19. Responsible adult trustee designated to manage death benefits for minor child beneficiary until adulthood.
Flexible Spending Account (FSA)
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Return of Cash Value rider
Trusts
20. Covers disabilities occurring both "on" AND "off" job; "on" job benefits paid in addition to work. comp. - if applicable (i.e. individual plan).
Settlement options for Life policy (1 of 2)
Approval Type Conditional receipt
Occupational Disability policy
Insurance contract characteristics (1 of 2)
21. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.
Dependent coverage
Departments of an Insurer
Accidental Death & Dismemberment (AD&D) Life policy
Enhanced Ordinary (aka Extraordinary) Whole Life policy
22. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.
Partial disability rider
Levels of Long Term Care provided
Risk management
Considerations in replacing Health insurance
23. Excludes coverage for suicide during 1st 2 yrs. ONLY but - if it does - all premiums must be returned to beneficiary.
Suicide clause/provision
Single Pay Whole Life policy
Total disability (as commonly defined)
Family Income policy
24. Guaranteed min. interest rate on cash value buildup but possible higher rate if short-term investment returns higher than expected.
Variable Universal Life policy
Medicare
Employer-Administered plan
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
25. Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling - stock investment).
Law of Large Numbers
Variable Universal Life policy
Pure risk vs. Speculative risk
Palliative vs. Curative care
26. Federal law which allows health coverage portability when changing jobs - so long as previous coverage was in effect 63+ days; allows some tax deductibility for LTC.
Health Insurance Portability and Accountability Act (HIPAA)
Doctrine of Comity
Presumptive disability
Return of Premium rider
27. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.
Relation of Earnings to Insurance provision
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Tax implications of Dividends - Loans & Interest
28. No deductible coverage for: daily room/board; ancillary costs; surgeon &/or physician expense (for added premium).
Whole (aka Permanent or Straight) Life policy
Annuity Classifications (3 of 5): Source of income
Basic Medical plan
Joint Life (aka "First to die") policy
29. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.
Annuity Classifications (3 of 5): Source of income
Medicare Supplement or Medigap policy
Dread Disease policy
Penalties for violating AIDS/HIV privacy laws
30. 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
Departments of an Insurer
Types of Agency Authority
Exclusions to Work. Comp.
Revocable vs. Irrevocable beneficiary
31. 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.
Renewability provision
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Medical Savings Account (MSA) & Health Savings Account (HSA)
Dependent coverage
32. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.
Primary Insurance Amount (PIA)
Underwriting risk categories
Dental Plan
Dividends
33. Written policy terms supersede oral statements made prior to policy issue.
Parole Pardon Rule
Cash value
Blue Cross/Blue Shield
Return of Premium rider
34. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.
Cross Purchase Plan
Employer-Administered plan
24 Hour Coverage (CA)
Medical cost containment (aka Managed care)
35. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.
Settlement options for Life policy (2 of 2)
Plans A-L of Medical Supplement or Medigap
Equity Index Whole Life policy
Comprehensive Major Medical plan
36. Same as Comprehensive Major Medical but w/ integrated deductible; much more expensive.
Supplemental Major Medical plan
Human Life Value approach
Medicare Part A (aka Hospital Insurance or HI)
Return of Premium rider
37. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.
Dividends
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Insurance contract characteristics (2 of 2)
Comprehensive Major Medical plan
38. Refund of 50-80% of premium (minus claims paid) every 5-10 yrs. OR age 65; expensive!
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Return of Premium rider
Rescission
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
39. Compensates business for loss due to disability of key employee; premiums not deductible but benefits tax-free.
Beneficiary provisions
Indemnify
Renewability provision
Key Employee Disability policy
40. 1: Tax-free lump sum; 2: Monthly pay-outs for fixed time; 3: Fixed monthly payments until depleted.
Plans A-L of Medical Supplement or Medigap
Legal Action provision
Requirements to sell variable life products
Settlement options for Life policy (1 of 2)
41. An unintentional mistake committed by an insurance representative; may be covered by E&O insurance.
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Adjustable Whole Life policy
Errors & Omissions (E&O)
Endowment Life policy
42. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.
Claim Form (aka Proof of Loss Form) provision
Annuity
Cross Purchase Plan
Types of Term Life policies
43. Prohibited w/ regard to testing for people of same class; test results must remain confidential; coverage may be declined (once discovered).
Tax implications of an Estate
AIDS/HIV discrimination
Employer Liability
Presumptive disability
44. PURELY employer-funded account to reimburse employees for qualified medical expenses not covered by group health plan.
Total disability (as commonly defined)
Health Reimbursement Account (HRA)
Insurance contract characteristics (2 of 2)
Business Continuation (aka Buy-Sell) policy
45. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Indemnify
Medicaid/Medi-Cal
46. Part A - Inpatient hospital deductibles vary on # of days; limited reserve days; finite benefit; 1st 3 pints blood; Part B - 20% co-payment.
Concealment
Medicare Part A & B "Gaps"
Doctrine of Comity
Departments of an Insurer
47. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.
Annuity Classifications (1 of 5): How premium is paid
Annuity Classifications (5 of 5): # of lives
Survivorship (aka "Last to die") policy
Fraud
48. Mortality is the statistical possibility of death @ each age. Morbidity is the statistical possibility & extent of disability @ each age.
IRS Penalties for Annuities
Mortality vs. Morbidity tables
Types of hazards
Variable Life policy (1 of 2)
49. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).
Health Insurance Portability and Accountability Act (HIPAA)
Settlement options for Life policy (1 of 2)
Payment of Premium provision
Cost of Living Adjustment (COLA) Life rider
50. Same as WL but w/ adjustable death benefit (& corresponding premium) & over-fund option but w/ annually renewable term (ART).
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Occupational Disability policy
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Common Disaster (Simultaneous Death Act) clause/provision