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. 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.






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






3. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.






4. Coverage remains in effect for 31 days past premium due date; benefits paid during grace period would be deducted from sum.






5. 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.






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






7. 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.






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






9. 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.






10. 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.






11. WL policy covering 2 or more Insureds but ONLY payable upon death of LAST Insured - generally low premium but high death benefit.






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






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






14. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.






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






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






17. Group plan initially self-funded by employer (like SIR); after which - group plan Insurer covers (up to policy limit); requires TPA.






18. 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.






19. Allows for use of HMO/PPO or other private carrier to provide expanded benefits @ additional premium & if enrolled in BOTH Parts A & B.






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






21. If Insured changes to: more hazardous job - benefits reduced; less hazardous job - premiums reduce.






22. Prohibited w/ regard to testing for people of same class; test results must remain confidential; coverage may be declined (once discovered).






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






24. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).






25. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.






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






27. Waives premium on Life policy for minor child until age 21 in event premium payor dies or becomes disabled.


28. Period of time following any children's survivor benefit & before benefits are provided to employee's widow/widower.






29. Premiums determined by target cash values or death benefit; partial cash value w/drawals allowed; transparent policy w/ unbundled premium.






30. 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.






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






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






33. A&H - A&S - Sickness only; Medical; Disability; Accident only; Travel accident; LTC; Medicare supplement; AD&D; Dental/Vision/Prescription; Limited.






34. Benefits automatically increase annually based on inflationary index (i.e. Consumer Price Index) OR flat rate (5% max.).






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






36. Policy provisions must conform to state regulations where policy is sold.






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






38. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.






39. Upon death - death benefit is paid + the aggregate of premiums paid to date; add-on to Term policy ONLY.






40. Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling - stock investment).






41. Receipt whereby coverage incepts immediately upon submission of full consideration - unless declined & premium refunded.






42. Insurance purchased by other Insurer(s) to spread or diversify risk; promotes industry stability.






43. Benefits NOT taxable; employer-paid premiums deductible to employer; individual plans not deductible unless over 7 1/2% of adjusted gross income - then excess deductible.






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






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






46. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.






47. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)






48. 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






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






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