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






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






3. Price of insurance per exposure unit.






4. Although death benefit is tax-free - it is included in gross estate value so federal &/or state taxes may apply to a portion in excess of fixed federal limit.






5. Fraternal - non-profit - members only; Reciprocal - unincorp'd org. - members insure each other; Lloyd's Assoc. - groups sharing risks; Surplus lines - special market risks.






6. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.






7. Waives premium upon disability of Insured until return to work; disability must persist for 90 days or longer; 1st 90 day premiums refunded after 90 days.






8. 'The inability to perform ANY gainful occupation'.






9. Available for any reason up to full cash value @ fixed (max 8%) OR variable interest rate; loan $ + interest deducted from benefit @ death.






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






11. Federally-funded but state-run program for truly indigent individuals & families providing medical care at Federal clinic.






12. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).






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






14. Mortality is the statistical possibility of death @ each age. Morbidity is the statistical possibility & extent of disability @ each age.






15. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.






16. Req. by CA statute & may provide workers coverage for action-over claims.






17. Identical to Incontestable Clause in Life policy.






18. Excludes coverage for suicide during 1st 2 yrs. ONLY but - if it does - all premiums must be returned to beneficiary.






19. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.






20. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.






21. A lapsed policy may be reinstated if not longer than 3-5 yrs. - & proof of insurability re-established - & back premiums + interest paid.






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






23. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).






24. Dependent children are covered until 19 or 23 (full-time student only) or until self-sufficient (if handicapped).






25. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.






26. Govt. organization providing health care benefits for dependents of military personnel.






27. Guaranteed min. interest rate on cash value buildup but possible higher rate if short-term investment returns higher than expected.






28. Permanent - not recoverable (spinal cord injury); Temporary - recoverable (temp. illness/injury - broken limb).






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






30. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.






31. Provides disability income during surgery recovery from life-threatening condition (& sometimes cosmetic surgery).






32. Provides 24 hr. health coverage both "on" & "off" job - but may cause coverage duplication & coordination challenges.






33. Two death benefit options - Option A: death benefit ONLY; Option B: death benefit + cash value; death benefit NOT guaranteed.






34. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.






35. Funding mechanism whereby employer & employee share cost of premium. Upon death - benefit is shared between employer & beneficiary.






36. 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.






37. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.






38. Policy must be delivered w/ original (or copy of same) application attached.






39. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.






40. Written policy terms supersede oral statements made prior to policy issue.






41. Permanent disability due to total loss of sight - hearing - speech or use of 2 + limbs; benefits paid even while continuing to work.






42. An attempt to contain costs by employing various strategies - including wellness programs - preventative testing - outpatient & alternative procedures.






43. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.






44. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).






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






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






47. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.






48. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.






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






50. 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).