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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. A&H - A&S - Sickness only; Medical; Disability; Accident only; Travel accident; LTC; Medicare supplement; AD&D; Dental/Vision/Prescription; Limited.
Total disability (more restrictive definition)
Accidental Death (aka Multiple Indemnity) rider
Types of Accident & Health insurance
Types of Insurers (by authorization)
2. Death benefit determined by Insured's projected lost earnings potential.
Human Life Value approach
Health Insurance Portability and Accountability Act (HIPAA)
Types of Accident & Health (A&H) providers
Dependent coverage
3. Earned premium is $ paid for coverage to date. Unearned premium is $ paid & returnable due to coverage not provided.
Earned vs. Unearned premium
Single Pay Whole Life policy
Medicare Part D
Rate (as defined by CIC)
4. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).
Variable Universal Life policy
Return of Cash Value rider
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Types of Insurers (by authorization)
5. 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.
Market Value Adjusted (aka Modified Guaranteed) annuity
Medicare Part A & B "Gaps"
Tax implications of Disability policy
Waiver of Premium (Waiver of Cost of Insurance) rider
6. Facultative - case by case agreements; Automatic/Treaty - automatic acceptance of risk percentage per previous agreement.
Blue Cross/Blue Shield
Parole Pardon Rule
Insurance contract characteristics (2 of 2)
Types of reinsurance
7. An attempt to contain costs by employing various strategies - including wellness programs - preventative testing - outpatient & alternative procedures.
Medical cost containment (aka Managed care)
Medi-Cal Share Cost plan
Guaranteed Insurability Life rider
Claim Form (aka Proof of Loss Form) provision
8. 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.
Recurrent disability clause/provision
Partial disability rider
Medicare Part A & B "Gaps"
Human Life Value approach
9. Same as WL but premium low for 1st 5 yrs. - THEN has annual premium increases for set # yrs. - THEN level premium.
Modified Premium Whole Life policy
Types of Term Life policies
Graded Premium Whole Life policy
Loss exposure
10. Conditional - coverage is conditional; Personal - parties are people; Good faith - honesty/integrity; Fiduciary - req's financial trust.
Concealment
Medicare Supplement or Medigap policy
Types of Accident & Health insurance
Insurance contract characteristics (2 of 2)
11. Refund of 50-80% of premium (minus claims paid) every 5-10 yrs. OR age 65; expensive!
Return of Premium rider
Occupational Disability policy
7 Pay Test
Binding receipt (aka Temporary Insurance Agreement)
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.
Cross Purchase Plan
Tax implications of medical plans
Payment of Premium provision
Equity Indexed annuity
13. No-charge annuity w/drawals allowed up to 10% of total - THEN penalized on sliding scale based on # policy yrs.; conditionally waived.
Annuity surrender charges
Concealment exceptions
Insurer (as defined by CIC)
Family or Dependents rider
14. PURELY employer-funded account to reimburse employees for qualified medical expenses not covered by group health plan.
Accidental Death & Dismemberment (AD&D) Disability rider
Medicaid/Medi-Cal
Health Reimbursement Account (HRA)
Total disability (as commonly defined)
15. 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
Policy delivery
COBRA Time Limitations
Key Employee policy
Exclusions to Work. Comp.
16. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Graded Premium Whole Life policy
Types of Insurers (by domicile)
Return of Cash Value rider
Key Employee policy
17. Allows for use of HMO/PPO or other private carrier to provide expanded benefits @ additional premium & if enrolled in BOTH Parts A & B.
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
COBRA Time Limitations
Medicare Part C (aka Medicare Advantage)
Medicare Part A & B "Gaps"
18. Provides % of monthly income benefit if Insured becomes disabled due to illness or accident.
Rehabilitation rider
Disability Income policy
Juvenile Life (aka Jumping Juvenile) policy
Adverse selection
19. Federal law which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.
Elements to contract
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Health Insurance Portability and Accountability Act (HIPAA)
Age Discrimination in Employment Act (ADEA)
20. Dividends are NOT taxable but interest is. Loan interest is NOT tax-deductible. Interest paid by Insurer on retained funds is taxable.
24 Hour Coverage (CA)
Errors & Omissions (E&O)
Dividend options
Tax implications of Dividends - Loans & Interest
21. Identical to Incontestable Clause in Life policy.
Rehabilitation rider
Medicaid/Medi-Cal
Time Limit on Certain Defenses provision
Variable Life policy (1 of 2)
22. Temp. coverage for set duration w/ death benefit ONLY (no cash value) - offers largest $ for lowest premium; renewable; convertible.
Annuity Classifications (1 of 5): How premium is paid
Annuity
Term Life policy
Variable Life policy (1 of 2)
23. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.
Loss exposure
Types of Insurers (by sector)
Equity Indexed annuity
Revocable vs. Irrevocable beneficiary
24. 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
Settlement options for Life policy (2 of 2)
Medicare Part C (aka Medicare Advantage)
Loss of Earnings Test
25. 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.
Family Income policy
Civil Rights/Pregnancy Discrimination Act
Market Value Adjusted (aka Modified Guaranteed) annuity
7 Pay Test
26. Physical - slippery floor; Moral - dishonest acts; Morale - carelessness or recklessness.
Key Employee policy
AIDS/HIV discrimination
Types of hazards
Employer Liability
27. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Medicare Part A & B "Gaps"
Payor (aka Waiver of Payor's Premium) rider
Misstatement of Age/Sex provision
28. Upon death - death benefit is paid + the aggregate of premiums paid to date; add-on to Term policy ONLY.
Supplemental Major Medical plan
Reinsurance
Disability Income policy
Return of Premium rider
29. A company providing lump sum buyout (50-90% of total) of Life policy; becomes owner & beneficiary & assumes premium payments; usually terminally ill viator.
Viatical Settlement Provider (VSP)
Graded Premium Whole Life policy
Term Life policy
Whole (aka Permanent or Straight) Life policy
30. Basic Medical; Major Medical; Comprehensive Major Medical
Types of Medical Plans
Law of Large Numbers
Cross Purchase Plan
Applicant Representations vs. Warranties
31. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.
Annuity Classifications (2 of 5): When benefits begin
Cash value
Permanent vs. Temporary disability
Risk management
32. Receipt whereby coverage incepts conditionally upon submission of full consideration and that all underwriting reqs. are met.
Insurability Type Conditional receipt
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Automatic Premium Loan (APL) provision
Endowment Life policy
33. Agents - represent Insurer; Brokers - represent themselves & Insured; Solicitors - represent one agent to solicit leads.
Valid life insurance contracts must identify...
Types of Licensed Producers
Reinsurance
Insurance contract characteristics (1 of 2)
34. Unilateral - Insurer provides contract; Adhesion - parties must adhere to terms; Aleatory - benefits may not inure equally.
Penalties for violating AIDS/HIV privacy laws
Insurance contract characteristics (1 of 2)
Types of hazards
Indemnify
35. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.
Cash value
Accidental Death & Dismemberment (AD&D) Disability rider
Waiver of Premium (Waiver of Cost of Insurance) rider
Medicare Supplement or Medigap policy
36. Mortality is the statistical possibility of death @ each age. Morbidity is the statistical possibility & extent of disability @ each age.
Joint Life (aka "First to die") policy
Mortality vs. Morbidity tables
Health Maintenance Organization (HMO)
Life insurance policy
37. Guaranteed min. interest rate on cash value buildup but possible higher rate if short-term investment returns higher than expected.
Grace Period provision
Medicaid/Medi-Cal
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Variable Universal Life policy
38. 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.
Small Employer Medical Expense plan
Dependent coverage
Renewability provision
Employee Retirement Income Security Act (ERISA)
39. Prepaid med. benefits for "subscribers" @ approved facilities; many non-profit; Blue Cross - Hospital stays; Blue Shield - M.D. costs.
Underwriting risk categories
Dividend options
Blue Cross/Blue Shield
Variable Life policy (1 of 2)
40. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.
Tax implications of Death Benefit & Cash Value
Endowment Life policy
Rescission
Modified Premium Whole Life policy
41. Upon death - death benefit is paid + the aggregate of cash value accumulated to date; add-on to WL policy ONLY.
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Return of Cash Value rider
Spendthrift provision
Medical cost containment (aka Managed care)
42. Receipt whereby coverage incepts ONLY after underwriting approval.
Incontestability clause/provision
Phases of an annuity
Return of Premium rider
Approval Type Conditional receipt
43. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.
Phases of an annuity
IRS Penalties for Annuities
Types of Licensed Producers
Medi-Cal Share Cost plan
44. Req. by CA statute & may provide workers coverage for action-over claims.
Pure risk vs. Speculative risk
Types of Term Life policies
Employer Liability
Law of Large Numbers
45. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.
Suicide clause/provision
Departments of an Insurer
Medical cost containment (aka Managed care)
Tax implications of an Annuity (1 of 2)
46. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.
Types of Agency Authority
Phases of an annuity
Business Continuation (aka Buy-Sell) Disability policy
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
47. Part A - Inpatient hospital deductibles vary on # of days; limited reserve days; finite benefit; 1st 3 pints blood; Part B - 20% co-payment.
Relation of Earnings to Insurance provision
CHAMPUS (aka TriCare)
Medicare Part A & B "Gaps"
Change of Occupation provision
48. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.
Retrocession
Fraud
Transplant/Cosmetic Surgery rider
Elimination (aka Waiting) period
49. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)
Annuity Classifications (1 of 5): How premium is paid
Annuity surrender charges
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Types of Insurers (by ownership)
50. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.
Common Accident provision
Occupational Disability policy
Dread Disease policy
Payment of Premium provision