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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. Available for any reason up to full cash value @ fixed (max 8%) OR variable interest rate; loan $ + interest deducted from benefit @ death.
Family policy
Survivorship (aka "Last to die") policy
Total disability (more restrictive definition)
Policy loans
2. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.
Partial disability rider
Binding receipt (aka Temporary Insurance Agreement)
Types of Insurers (by domicile)
Misstatement of Age/Sex provision
3. Prepaid med. benefits for members w/ approved primary care M.D. (independent); low co-pay; non-PPO M.D. can be used at higher cost.
Blue Cross/Blue Shield
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Misstatement of Age/Sex provision
Preferred Provider Organization (PPO)
4. 1: Cash (tax-free); 2: Apply to future premiums; 3: Retained by Insurer @ interest; 4: Buy Paid-up WL policy add-ons; 5: Pay-up existing policy; 6: Buy 1-yr. Term policy.
Accidental Death (aka Multiple Indemnity) rider
Dividend options
Rehabilitation rider
Renewability provision
5. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.
Market Value Adjusted (aka Modified Guaranteed) annuity
Equity Index Whole Life policy
Return of Premium rider
Law of Large Numbers
6. 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
Variable Universal Life policy
Family Income policy
Types of Insurers (by sector)
7. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.
Proof of Loss provision
Plans A-L of Medical Supplement or Medigap
Medicare
Annuity Classifications (3 of 5): Source of income
8. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.
Factors that determine premium
Automatic Premium Loan (APL) provision
Health Maintenance Organization (HMO)
Disability Income policy
9. War; elective cosmetic surgery; routine dental; work. comp.-covered claims; self-inflicted (intentional); gov't. facility treatment; LTC; private nursing.
Employer Liability
Exclusions for Major Medical plan
Considerations in replacing Health insurance
Total disability (any-occupational definition)
10. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.
Credit Life policy
AIDS/HIV discrimination
Medicare Supplement or Medigap policy
Underwriting risk categories
11. Fraternal - non-profit - members only; Reciprocal - unincorp'd org. - members insure each other; Lloyd's Assoc. - groups sharing risks; Surplus lines - special market risks.
Cost of Living Adjustment (COLA) Life rider
Settlement options for Life policy (2 of 2)
Relation of Earnings to Insurance provision
Types of Insurers (miscellaneous)
12. Grows @ fixed min. interest rate but w/ possible higher rate tied to equity index (i.e S&P Equity Index) appreciation; gains shared w/ Insurer.
Single Pay Whole Life policy
Trial Application (aka Request for Offer)
Equity Indexed annuity
Accidental Death (aka Multiple Indemnity) rider
13. Provides benefit during Social Security "black-out" period - up to 1 yr.
Policy delivery
Trial Application (aka Request for Offer)
Transplant/Cosmetic Surgery rider
Social Security Benefit (Supplement) rider
14. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)
Types of Medical Plans
Trusts
Annuity Classifications (1 of 5): How premium is paid
Enhanced Ordinary (aka Extraordinary) Whole Life policy
15. If Insured changes to: more hazardous job - benefits reduced; less hazardous job - premiums reduce.
Health Insurance Portability and Accountability Act (HIPAA)
Change of Occupation provision
Tax implications of an Annuity (1 of 2)
Policy loans
16. Insurance purchased by other Insurer(s) to spread or diversify risk; promotes industry stability.
Non-forfeiture options for WL policy
Convertibility provision
Dependent coverage
Reinsurance
17. A company providing lump sum buyout (50-90% of total) of Life policy; becomes owner & beneficiary & assumes premium payments; usually terminally ill viator.
Free Look provision
Viatical Settlement Provider (VSP)
Needs approach (most common)
Point of Service plan
18. Process which prevents claim denial as a result of false statement or promise (made by Insurer) - which was relied upon by Insured.
Common Accident provision
Estoppel
Tax implications of Death Benefit & Cash Value
Types of Agency Authority
19. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Insuring clause/provision (aka Insuring Agreement)
Valid life insurance contracts must identify...
Health Reimbursement Account (HRA)
20. Same as WL but premium low for 1st 5 yrs. - THEN has annual premium increases for set # yrs. - THEN level premium.
Variable Life policy (2 of 2)
AIDS/HIV discrimination
Graded Premium Whole Life policy
Insurance contract characteristics (1 of 2)
21. Provides hospital insurance automatically @ age 65 (if FICA qualified) @ no fee but may have deductible & co-pay.
Dividends
Types of Medical Plans
Medicare Part A (aka Hospital Insurance or HI)
Medicare
22. Savings account for medical expenses; Tax-deductible contributions; tax-deferred growth; tax-free for qualified use; taxable for non-qualified use.
Tax implications of Dividends - Loans & Interest
Joint Life (aka "First to die") policy
Adjustable Whole Life policy
Medical Savings Account (MSA) & Health Savings Account (HSA)
23. 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.
Comprehensive Major Medical plan
Payor (aka Waiver of Payor's Premium) rider
Tax implications of medical plans
Cost of Living Adjustment (COLA) Disability rider
24. Earned premium is $ paid for coverage to date. Unearned premium is $ paid & returnable due to coverage not provided.
Earned vs. Unearned premium
Medicare Part A (aka Hospital Insurance or HI)
Parole Pardon Rule
Departments of an Insurer
25. 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
Approval Type Conditional receipt
Exclusions to Work. Comp.
Blue Cross/Blue Shield
Major Medical plan
26. 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
Types of Insurers (by authorization)
Occupational Disability policy
Policy loans
27. Death benefit is NOT taxable. Cash value grows tax-deferred but cost basis (base premium) is not taxable - only interest is.
Whole (aka Permanent or Straight) Life policy
AIDS/HIV discrimination
Waiver of Premium provision
Tax implications of Death Benefit & Cash Value
28. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.
Estoppel
Annuity Classifications (5 of 5): # of lives
Equity Indexed annuity
Common Disaster (Simultaneous Death Act) clause/provision
29. Prohibited w/ regard to testing for people of same class; test results must remain confidential; coverage may be declined (once discovered).
AIDS/HIV discrimination
Automatic Premium Loan (APL) provision
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Medicare Part B (aka Supplemental Medical Insurance or SMI)
30. Federal law which prohibits companies w/ 15+ employees from decreasing coverage benefits for women affected by pregnancy or childbirth.
Earned vs. Unearned premium
Civil Rights/Pregnancy Discrimination Act
Payor (aka Waiver of Payor's Premium) rider
Limited Pay Whole Life policy
31. Upon death - death benefit is paid + the aggregate of cash value accumulated to date; add-on to WL policy ONLY.
Types of Agency Authority
Return of Cash Value rider
Family or Dependents rider
Time Limit on Certain Defenses provision
32. Agreement - Offer & acceptance; Consideration - application + premium; Legal capacity - licensed &/or competent; Legal purpose - public good.
Peril vs. Hazard
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Elements to contract
Current Assumption (aka Interest-Sensitive) Whole Life policy
33. 4: Funds retained by Insurer until w/drawn - interest ONLY paid monthly (taxable); 5: Paid-up immediate annuity.
Entire Contract provision
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Settlement options for Life policy (2 of 2)
34. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.
Presumptive disability
Cross Purchase Plan
Pure risk vs. Speculative risk
Payor (aka Waiver of Payor's Premium) rider
35. Receipt whereby coverage incepts immediately upon submission of full consideration - unless declined & premium refunded.
Binding receipt (aka Temporary Insurance Agreement)
Return of Cash Value rider
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Types of Insurers (by ownership)
36. Death benefit determined by Insured's projected lost earnings potential.
Tax implications of Dividends - Loans & Interest
Reinsurance
Human Life Value approach
Considerations in replacing Health insurance
37. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.
Insurability Type Conditional receipt
Point of Service plan
Accidental Death (aka Multiple Indemnity) rider
Medicare Part C (aka Medicare Advantage)
38. Coverage remains in effect for 31 days past premium due date; benefits paid during grace period would be deducted from sum.
Entire Contract provision
Binding receipt (aka Temporary Insurance Agreement)
Dividend options
Grace Period provision
39. Provides % of monthly income benefit if Insured becomes disabled due to illness or accident.
Valid life insurance contracts must identify...
Loss of Earnings Test
Fraud
Disability Income policy
40. Identical to Incontestable Clause in Life policy.
Insurer (as defined by CIC)
Conformity with State Statute provision
Loss exposure
Time Limit on Certain Defenses provision
41. Beneficiary has right to leave death benefits / Insurer to protect $ from creditors; interest (taxable) paid on retained funds.
Market Value Adjusted (aka Modified Guaranteed) annuity
Trial Application (aka Request for Offer)
Renewability provision
Spendthrift provision
42. Permanent disability due to total loss of sight - hearing - speech or use of 2 + limbs; benefits paid even while continuing to work.
Law of Large Numbers
Total disability (more restrictive definition)
Medicare
Presumptive disability
43. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.
Whole (aka Permanent or Straight) Life policy
Impairment (Exclusion) rider
Rescission
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
44. Part A - Inpatient hospital deductibles vary on # of days; limited reserve days; finite benefit; 1st 3 pints blood; Part B - 20% co-payment.
Adjustable Whole Life policy
Common Accident provision
Medicare Part A & B "Gaps"
Reinsurance
45. Policy owner must notify Insurer of loss either in writing - in person or by phone w/in 20 days.
Spendthrift provision
Occupational Disability policy
Penalties for violating AIDS/HIV privacy laws
Notice of Claim provision
46. Receipt whereby coverage incepts ONLY after underwriting approval.
Health Maintenance Organization (HMO)
Approval Type Conditional receipt
Doctrine of Comity
Limited Pay Whole Life policy
47. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.
Proof of Loss provision
Business Overhead Expense (BOE) Disability policy
Beneficiary provisions
Cash value
48. Must be delivered in person or by certified - registered or 1st-class mail w/ signature - unless waived by Insurance Commissioner.
Time Limit on Certain Defenses provision
Earned vs. Unearned premium
Policy delivery
Business Continuation (aka Buy-Sell) policy
49. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.
Limited Pay Whole Life policy
Annuity
Experience vs. Community rating in Group Health plan
Graded Premium Whole Life policy
50. A&H - A&S - Sickness only; Medical; Disability; Accident only; Travel accident; LTC; Medicare supplement; AD&D; Dental/Vision/Prescription; Limited.
Earned vs. Unearned premium
Types of Accident & Health insurance
Exclusions for Major Medical plan
Total disability (as commonly defined)