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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. 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
Rescission
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Parole Pardon Rule
AIDS/HIV discrimination
2. Fraternal - non-profit - members only; Reciprocal - unincorp'd org. - members insure each other; Lloyd's Assoc. - groups sharing risks; Surplus lines - special market risks.
Endowment Life policy
Guaranteed Insurability Life rider
Parole Pardon Rule
Types of Insurers (miscellaneous)
3. 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.
Settlement options for Life policy (2 of 2)
Employer-Administered plan
Disability Income policy
Tax implications of Disability policy
4. Benefits automatically increase annually based on inflationary index (i.e. Consumer Price Index) OR flat rate (5% max.).
Cost of Living Adjustment (COLA) Disability rider
Long Term Care (LTC) policy
Family or Dependents rider
Annuity Classifications (5 of 5): # of lives
5. Allows Insured to increase death benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age.
Medicare Part A & B "Gaps"
Guaranteed Insurability Life rider
Cost of Living Adjustment (COLA) Disability rider
Variable Universal Life policy
6. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.
Types of Renewability provisions
Accidental Death (aka Multiple Indemnity) rider
Revocable vs. Irrevocable beneficiary
Return of Cash Value rider
7. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.
AIDS/HIV discrimination
IRS Penalties for Annuities
Equity Index Whole Life policy
Spendthrift provision
8. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.
Types of Agency Authority
Joint Life (aka "First to die") policy
Law of Large Numbers
Types of Medical Plans
9. Responsible adult trustee designated to manage death benefits for minor child beneficiary until adulthood.
Trusts
Elements to contract
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Suicide clause/provision
10. Coverage remains in effect for 31 days past premium due date; benefits paid during grace period would be deducted from sum.
Claim Form (aka Proof of Loss Form) provision
Rehabilitation rider
Term Life policy
Grace Period provision
11. Death benefit determined by Insured's financial goals & needs (minus assets).
COBRA Time Limitations
Free Look provision
Tax implications of an Annuity (1 of 2)
Needs approach (most common)
12. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.
Life insurance policy
Medical cost containment (aka Managed care)
Family or Dependents rider
Misstatement of Age/Sex provision
13. Non-qualified Annuity - Non-deductible contributions & tax-deferred growth. At pay-out - tax-free principal but taxable growth.
Tax implications of Death Benefit & Cash Value
Mortality vs. Morbidity tables
Tax implications of an Annuity (1 of 2)
Types of Term Life policies
14. Period of time following any children's survivor benefit & before benefits are provided to employee's widow/widower.
Types of Renewability provisions
Insurability Type Conditional receipt
Modified Premium Whole Life policy
Blackout Period
15. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.
Flexible Spending Account (FSA)
Rate (as defined by CIC)
Tax implications of an Annuity (1 of 2)
Types of Insurers (by sector)
16. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.
Insurable interest
Spendthrift provision
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Dividend options
17. Receipt whereby coverage incepts ONLY after underwriting approval.
Medicare
Approval Type Conditional receipt
Adverse selection
Beneficiary provisions
18. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.
Business Continuation (aka Buy-Sell) policy
Incontestability clause/provision
Notice of Claim provision
Employee Retirement Income Security Act (ERISA)
19. Guaranteed min. interest rate on cash value buildup but possible higher rate if short-term investment returns higher than expected.
Rescission
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Joint Life (aka "First to die") policy
Dental Plan
20. 4: Funds retained by Insurer until w/drawn - interest ONLY paid monthly (taxable); 5: Paid-up immediate annuity.
Settlement options for Life policy (2 of 2)
Tax implications of medical plans
Cash value
24 Hour Coverage (CA)
21. Tendency of poorer risks to seek insurance.
AIDS/HIV discrimination
Life insurance policy
Doctrine of Comity
Adverse selection
22. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.
Family or Dependents rider
Notice of Claim provision
Palliative vs. Curative care
Reinstatement provision
23. Price of insurance per exposure unit.
Types of Medical Plans
Earned vs. Unearned premium
Dependent coverage
Rate (as defined by CIC)
24. Temp. coverage for set duration w/ death benefit ONLY (no cash value) - offers largest $ for lowest premium; renewable; convertible.
Term Life policy
Primary Insurance Amount (PIA)
Policy delivery
Exclusions to Work. Comp.
25. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.
Viatical Settlement Provider (VSP)
Insuring clause/provision (aka Insuring Agreement)
Comprehensive Major Medical plan
Non-Occupational Disability policy
26. Upon death - death benefit is paid + the aggregate of premiums paid to date; add-on to Term policy ONLY.
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Tax implications of an Annuity (1 of 2)
Return of Premium rider
Spendthrift provision
27. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.
Settlement options for Life policy (1 of 2)
Business Continuation (aka Buy-Sell) Disability policy
Age Discrimination in Employment Act (ADEA)
Change of Occupation provision
28. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).
Proof of Loss provision
Common Disability Exclusions
Total disability (as commonly defined)
Rate (as defined by CIC)
29. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.
Policy delivery
Family Income policy
Beneficiary provisions
Phases of an annuity
30. Must be delivered in person or by certified - registered or 1st-class mail w/ signature - unless waived by Insurance Commissioner.
Types of Insurers (by authorization)
Policy delivery
Loss of Earnings Test
Factors that determine premium
31. Same as WL but can be "paid-up" early by paying larger premium for shorter payment period (i.e. 10 Pay Life - 20 Pay Life).
Limited Pay Whole Life policy
Errors & Omissions (E&O)
Waiver of Premium (Waiver of Cost of Insurance) rider
Small Employer Medical Expense plan
32. Private sector (Commercial) - provides LA&H - P&C - & LTC; Public sector (Gov't) - provides flood - work. comp. - Medicare/Medicaid - Group Life (SGLI/FEGLI).
Common Life Exclusions
Plans A-L of Medical Supplement or Medigap
Types of Insurers (by sector)
Joint Life (aka "First to die") policy
33. Privately-provided or Medicare-provided (if no private carrier) prescription drug plans for qualified individuals but w/ premium - deductible & co-pay.
Medicare Part D
Insurability Type Conditional receipt
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Valid life insurance contracts must identify...
34. Prepaid med. benefits for "subscribers" @ approved facilities; many non-profit; Blue Cross - Hospital stays; Blue Shield - M.D. costs.
Business Overhead Expense (BOE) Disability policy
Time Limit on Certain Defenses provision
Blue Cross/Blue Shield
Estoppel
35. War; elective cosmetic surgery; routine dental; work. comp.-covered claims; self-inflicted (intentional); gov't. facility treatment; LTC; private nursing.
Tax implications of an Annuity (1 of 2)
Exclusions for Major Medical plan
Small Employer Medical Expense plan
Business Continuation (aka Buy-Sell) Disability policy
36. 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
Business Continuation (aka Buy-Sell) Disability policy
Common Disability Exclusions
Indeterminate Premium Whole Life policy
Exclusions to Work. Comp.
37. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.
Total disability (more restrictive definition)
Concealment
Point of Service plan
Settlement options for Life policy (2 of 2)
38. Same as WL but w/ Decreasing Term rider; upon death - pays monthly income for REMAINING term AFTER which pays full death benefit.
Risk management
Entire Contract provision
Elimination (aka Waiting) period
Family Income policy
39. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.
Exclusions to Work. Comp.
Supplemental Major Medical plan
Relation of Earnings to Insurance provision
Types of Accident & Health insurance
40. Reappearance of disability w/in 6 mth. period after "recovery" from same disability is considered recurrence - not new disability.
Recurrent disability clause/provision
Insurance contract characteristics (2 of 2)
Accidental Death (aka Multiple Indemnity) rider
Types of Licensed Producers
41. Same as WL but premium low for 1st 5 yrs. - THEN has annual premium increases for set # yrs. - THEN level premium.
Non-forfeiture options for WL policy
Employee Retirement Income Security Act (ERISA)
Graded Premium Whole Life policy
Accidental Death & Dismemberment (AD&D) Life policy
42. 1: Tax-free lump sum; 2: Monthly pay-outs for fixed time; 3: Fixed monthly payments until depleted.
Small Employer Medical Expense plan
Automatic Premium Loan (APL) provision
Settlement options for Life policy (1 of 2)
24 Hour Coverage (CA)
43. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Basic Medical plan
Cost of Living Adjustment (COLA) Disability rider
Primary Insurance Amount (PIA)
44. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Permanent vs. Temporary disability
Group Disability plan
Disability Income policy
Family Income policy
45. Death benefit is NOT taxable. Cash value grows tax-deferred but cost basis (base premium) is not taxable - only interest is.
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Tax implications of Death Benefit & Cash Value
Key Employee Disability policy
Employee Retirement Income Security Act (ERISA)
46. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.
Medicare Part D
Equity Index Whole Life policy
Earned vs. Unearned premium
Types of Agency Authority
47. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).
Loss of Earnings Test
Current Assumption (aka Interest-Sensitive) Whole Life policy
Annuity Classifications (5 of 5): # of lives
Exclusions to Work. Comp.
48. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).
Cost of Living Adjustment (COLA) Life rider
Revocable vs. Irrevocable beneficiary
Medical cost containment (aka Managed care)
Considerations in replacing Health insurance
49. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.
Needs approach (most common)
Automatic Premium Loan (APL) provision
Types of Insurers (by authorization)
Types of Insurers (by sector)
50. Same as WL but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Claim Form (aka Proof of Loss Form) provision
Common Accident provision
Free Look provision
Variable Life policy (1 of 2)