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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. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.
Incontestability clause/provision
Proof of Loss provision
Point of Service plan
Palliative vs. Curative care
2. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.
Rescission
Adjustable Whole Life policy
Mortality vs. Morbidity tables
Revocable vs. Irrevocable beneficiary
3. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.
Blue Cross/Blue Shield
Cost of Living Adjustment (COLA) Life rider
Return of Cash Value rider
Modified Endowment Contract (MEC)
4. Pre-existing illness/injury; Waiting period; Elimination period; Probationary period; Benefits - Exclusions - Limitations; Underwriting reqs.
COBRA Time Limitations
Considerations in replacing Health insurance
Current Assumption (aka Interest-Sensitive) Whole Life policy
Factors that determine premium
5. Federal law which prohibits companies w/ 15+ employees from decreasing coverage benefits for women affected by pregnancy or childbirth.
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Family policy
24 Hour Coverage (CA)
Civil Rights/Pregnancy Discrimination Act
6. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.
Approval Type Conditional receipt
Reinsurance
Rescission
Occupational Disability policy
7. Must be delivered in person or by certified - registered or 1st-class mail w/ signature - unless waived by Insurance Commissioner.
Policy delivery
Exclusions to Work. Comp.
Credit Life policy
Conformity with State Statute provision
8. 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).
Medicare Part A & B "Gaps"
Indeterminate Premium Whole Life policy
Automatic Premium Loan (APL) provision
Limited Pay Whole Life policy
9. Same as Comprehensive Major Medical but w/ integrated deductible; much more expensive.
Time Limit on Certain Defenses provision
Concealment
Supplemental Major Medical plan
Convertibility provision
10. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.
Dividend options
Presumptive disability
Credit Life policy
Types of Medical Plans
11. Same as WL but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Equity Indexed annuity
Estoppel
Variable Life policy (1 of 2)
Factors that determine premium
12. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Medicare Supplement or Medigap policy
Transplant/Cosmetic Surgery rider
Group Disability plan
Factors that determine premium
13. Peril is the CAUSE of loss. Hazard is a condition that increases LIKELIHOOD of loss.
Peril vs. Hazard
Return of Premium rider
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Underwriting risk categories
14. 'The inability to perform ANY reasonable occupation based on education - training or experience'.
Family policy
Exclusions to Work. Comp.
Relation of Earnings to Insurance provision
Total disability (more restrictive definition)
15. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Flexible Spending Account (FSA)
Transplant/Cosmetic Surgery rider
Valid life insurance contracts must identify...
16. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.
Annuity Classifications (3 of 5): Source of income
Insurable interest
Return of Premium rider
Limited Pay Whole Life policy
17. Same as WL but w/ Decreasing Term rider; upon death - pays monthly income for REMAINING term AFTER which pays full death benefit.
Family Income policy
Long Term Care (LTC) policy
Current Assumption (aka Interest-Sensitive) Whole Life policy
Free Look provision
18. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.
7 Pay Test
Survivorship (aka "Last to die") policy
Loss of Earnings Test
Renewability provision
19. A lapsed policy may be reinstated if not longer than 3-5 yrs. - & proof of insurability re-established - & back premiums + interest paid.
Tax implications of Death Benefit & Cash Value
Types of Term Life policies
Reinstatement provision
Mortality vs. Morbidity tables
20. Written policy terms supersede oral statements made prior to policy issue.
Doctrine of Comity
Annuity
Survivorship (aka "Last to die") policy
Parole Pardon Rule
21. Covers disabilities occurring ONLY "off" job; benefits do not overlap work. comp. (i.e. Group plan).
Conformity with State Statute provision
Non-Occupational Disability policy
Adverse selection
Requirements to sell variable life products
22. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.
Convertibility provision
Doctrine of Comity
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Earned vs. Unearned premium
23. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Doctrine of Comity
Tax implications of an Annuity (1 of 2)
Key Employee policy
Health Insurance Portability and Accountability Act (HIPAA)
24. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.
Reinsurance
Automatic Premium Loan (APL) provision
Return of Premium rider
Types of Agency Authority
25. 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.
Tax implications of Disability policy
Premium modes
Family policy
Policy delivery
26. No-charge annuity w/drawals allowed up to 10% of total - THEN penalized on sliding scale based on # policy yrs.; conditionally waived.
Types of Medical Plans
Annuity surrender charges
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Graded Premium Whole Life policy
27. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.
Departments of an Insurer
Dread Disease policy
Insurability Type Conditional receipt
Experience vs. Community rating in Group Health plan
28. Group plan initially self-funded by employer (like SIR); after which - group plan Insurer covers (up to policy limit); requires TPA.
Employer-Administered plan
Elimination (aka Waiting) period
Insuring clause/provision (aka Insuring Agreement)
Medicare Part A & B "Gaps"
29. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.
Free Look provision
Presumptive disability
Mortality vs. Morbidity tables
Accidental Death (aka Multiple Indemnity) rider
30. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.
Approval Type Conditional receipt
Departments of an Insurer
Considerations in replacing Health insurance
Types of Medical Plans
31. Upon death - death benefit is paid + the aggregate of cash value accumulated to date; add-on to WL policy ONLY.
Point of Service plan
Credit Life policy
Disability Income policy
Return of Cash Value rider
32. Privately-provided or Medicare-provided (if no private carrier) prescription drug plans for qualified individuals but w/ premium - deductible & co-pay.
Requirements to sell variable life products
Cost of Living Adjustment (COLA) Life rider
Health Maintenance Organization (HMO)
Medicare Part D
33. Same as WL but cash value increases @ current interest rates (not set); premium can start low or high & may change.
Valid life insurance contracts must identify...
Time Limit on Certain Defenses provision
Applicant Representations vs. Warranties
Current Assumption (aka Interest-Sensitive) Whole Life policy
34. Prohibited w/ regard to testing for people of same class; test results must remain confidential; coverage may be declined (once discovered).
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Cross Purchase Plan
Family or Dependents rider
AIDS/HIV discrimination
35. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).
Loss of Earnings Test
Rescission
Total disability (more restrictive definition)
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
36. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.
Annuity Classifications (2 of 5): When benefits begin
Grace Period provision
IRS Penalties for Annuities
Split Dollar Plan
37. Treating or mitigating loss exposures through 1: avoidance; 2: retention (deductibles); 3: sharing; 4: reduction; or 5: transfer.
Risk management
Fraud
Retrocession
Exclusions to Work. Comp.
38. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.
Health Insurance Portability and Accountability Act (HIPAA)
Reinsurance
Types of Accident & Health insurance
Types of Accident & Health (A&H) providers
39. Price of insurance per exposure unit.
Concealment
COBRA Time Limitations
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Rate (as defined by CIC)
40. Domestic - within home state; Foreign - outside home state; Alien - outside home country.
1035 Exchange
Types of Insurers (by domicile)
Major Medical plan
Family policy
41. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.
Misstatement of Age/Sex provision
Estoppel
Guaranteed Insurability Life rider
Insurance contract characteristics (2 of 2)
42. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.
Types of hazards
Trial Application (aka Request for Offer)
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Adjustable Whole Life policy
43. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.
Estoppel
Return of Cash Value rider
AIDS/HIV discrimination
Incontestability clause/provision
44. Allows Insured to increase death benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age.
Conformity with State Statute provision
Guaranteed Insurability Life rider
Factors that determine premium
Tax implications of an Annuity (1 of 2)
45. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.
Joint Life (aka "First to die") policy
CA Work. Comp. Statutes
Underwriting risk categories
Health Reimbursement Account (HRA)
46. Savings account for medical expenses; Tax-deductible contributions; tax-deferred growth; tax-free for qualified use; taxable for non-qualified use.
Permanent vs. Temporary disability
Types of Term Life policies
Relation of Earnings to Insurance provision
Medical Savings Account (MSA) & Health Savings Account (HSA)
47. Two death benefit options - Option A: death benefit ONLY; Option B: death benefit + cash value; death benefit NOT guaranteed.
Risk management
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Common Life Exclusions
Experience vs. Community rating in Group Health plan
48. Provides 24 hr. health coverage both "on" & "off" job - but may cause coverage duplication & coordination challenges.
Health Insurance Portability and Accountability Act (HIPAA)
Factors that determine premium
24 Hour Coverage (CA)
Supplemental Major Medical plan
49. Identical to Incontestable Clause in Life policy.
Claim Form (aka Proof of Loss Form) provision
Dividends
Time Limit on Certain Defenses provision
Consolidated Omnibus Budget Reconciliation Act (COBRA)
50. Temp. coverage for set duration w/ death benefit ONLY (no cash value) - offers largest $ for lowest premium; renewable; convertible.
Tax implications of Death Benefit & Cash Value
Dividend options
Rescission
Term Life policy