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Test your basic knowledge |
CA Life Agent Exam
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Subject
:
certifications
Instructions:
Answer 50 questions in 15 minutes.
If you are not ready to take this test, you can
study here
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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. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.
Types of Insurers (by sector)
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Insurability Type Conditional receipt
Joint Life (aka "First to die") policy
2. Mortality is the statistical possibility of death @ each age. Morbidity is the statistical possibility & extent of disability @ each age.
Mortality vs. Morbidity tables
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Risk management
Underwriting risk categories
3. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.
Types of Accident & Health (A&H) providers
Employee Retirement Income Security Act (ERISA)
Insuring clause/provision (aka Insuring Agreement)
Payment of Premium provision
4. Tendency of poorer risks to seek insurance.
Reinsurance
Term Life policy
Equity Index Whole Life policy
Adverse selection
5. 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.
Common Accident provision
Errors & Omissions (E&O)
Small Employer Medical Expense plan
Equity Indexed annuity
6. Req. by CA statute & may provide workers coverage for action-over claims.
Payment of Premium provision
Blue Cross/Blue Shield
Employer Liability
Grace Period provision
7. Federally-sponsored health care for individuals 65+ &/or w/ certain disabilities; may run concurrent w/ group plan but group plan would act primary - THEN Medicare.
Survivorship (aka "Last to die") policy
Medicare
Retrocession
Trusts
8. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.
Comprehensive Major Medical plan
Annuity
Types of Accident & Health insurance
Departments of an Insurer
9. Physical - slippery floor; Moral - dishonest acts; Morale - carelessness or recklessness.
Types of hazards
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Primary Insurance Amount (PIA)
Health Maintenance Organization (HMO)
10. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).
Annuity Classifications (3 of 5): Source of income
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Types of Insurers (by authorization)
Types of Insurers (by domicile)
11. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.
Policy delivery
Business Continuation (aka Buy-Sell) policy
Adjustable Whole Life policy
Dividends
12. Death benefit determined by Insured's projected lost earnings potential.
Dread Disease policy
Human Life Value approach
Types of Accident & Health (A&H) providers
Family Maintenance policy
13. Federal law which allows health coverage portability when changing jobs - so long as previous coverage was in effect 63+ days; allows some tax deductibility for LTC.
Free Look provision
Medicare Supplement or Medigap policy
Payment of Premium provision
Health Insurance Portability and Accountability Act (HIPAA)
14. Potential circumstance that could cause a loss; measured in dollars.
Loss exposure
Grace Period provision
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Annuity
15. Federal law allows employees/their dependents to continue group benefits w/in 60 days after termination (if employer has 20+ employees); Insured pays premium @ 102% of group cost.
Tax implications of Death Benefit & Cash Value
Dread Disease policy
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Rehabilitation rider
16. Provides medical & personal services for people needing extended assistance w/ Activities of Daily Living (ADL). Other benefits include: assisted living care; respite care; hospice care; adult day care.
Long Term Care (LTC) policy
Underwriting risk categories
Total disability (as commonly defined)
Insurer (as defined by CIC)
17. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.
Employer-Administered plan
Return of Premium rider
Group Disability plan
Relation of Earnings to Insurance provision
18. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.
Accidental Death (aka Multiple Indemnity) rider
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Types of Renewability provisions
Convertibility provision
19. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).
Tax implications of an Annuity (1 of 2)
Common Disability Exclusions
Occupational Disability policy
COBRA Time Limitations
20. Dividends are NOT taxable but interest is. Loan interest is NOT tax-deductible. Interest paid by Insurer on retained funds is taxable.
Tax implications of Dividends - Loans & Interest
Automatic Premium Loan (APL) provision
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Health Reimbursement Account (HRA)
21. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.
Market Value Adjusted (aka Modified Guaranteed) annuity
Graded Premium Whole Life policy
Elimination (aka Waiting) period
CHAMPUS (aka TriCare)
22. Facultative - case by case agreements; Automatic/Treaty - automatic acceptance of risk percentage per previous agreement.
Point of Service plan
Rescission
Types of Insurers (by domicile)
Types of reinsurance
23. 'The inability to perform your OWN normal occupation or daily duties'.
Types of Insurers (by domicile)
Total disability (as commonly defined)
Residual disability rider
Variable Life policy (1 of 2)
24. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.
Occupational Disability policy
Applicant Representations vs. Warranties
IRS Penalties for Annuities
Requirements to sell variable life products
25. Funding mechanism whereby employer & employee share cost of premium. Upon death - benefit is shared between employer & beneficiary.
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Types of Agency Authority
Split Dollar Plan
Peril vs. Hazard
26. Excludes coverage for suicide during 1st 2 yrs. ONLY but - if it does - all premiums must be returned to beneficiary.
Suicide clause/provision
Mortality vs. Morbidity tables
Flexible Spending Account (FSA)
Rehabilitation rider
27. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.
Equity Index Whole Life policy
Misstatement of Age/Sex provision
Mortality vs. Morbidity tables
Whole (aka Permanent or Straight) Life policy
28. Process which prevents claim denial as a result of false statement or promise (made by Insurer) - which was relied upon by Insured.
Types of Licensed Producers
Estoppel
Medicare Part D
Small Employer Medical Expense plan
29. Two death benefit options - Option A: death benefit ONLY; Option B: death benefit + cash value; death benefit NOT guaranteed.
Impairment (Exclusion) rider
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Insuring clause/provision (aka Insuring Agreement)
Palliative vs. Curative care
30. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.
Insurance contract characteristics (1 of 2)
Automatic Premium Loan (APL) provision
Tax implications of Dividends - Loans & Interest
Basic Medical plan
31. Premiums determined by target cash values or death benefit; partial cash value w/drawals allowed; transparent policy w/ unbundled premium.
Primary Insurance Amount (PIA)
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Policy loans
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
32. 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.
Waiver of Premium (Waiver of Cost of Insurance) rider
Reinsurance
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Market Value Adjusted (aka Modified Guaranteed) annuity
33. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.
Employer Liability
Convertibility provision
Annuity Classifications (1 of 5): How premium is paid
Adjustable Whole Life policy
34. If Insured changes to: more hazardous job - benefits reduced; less hazardous job - premiums reduce.
Underwriting risk categories
Occupational Disability policy
Change of Occupation provision
Types of Insurers (miscellaneous)
35. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.
Approval Type Conditional receipt
Total disability (more restrictive definition)
Needs approach (most common)
Cross Purchase Plan
36. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Business Continuation (aka Buy-Sell) policy
Types of Accident & Health insurance
Group Disability plan
Medicare
37. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.
Common Life Exclusions
Return of Cash Value rider
7 Pay Test
Small Employer Medical Expense plan
38. 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
Claim Form (aka Proof of Loss Form) provision
Age Discrimination in Employment Act (ADEA)
Risk management
39. Receipt whereby coverage incepts ONLY after underwriting approval.
Types of Insurers (by ownership)
Approval Type Conditional receipt
Annuity Classifications (3 of 5): Source of income
Change of Occupation provision
40. Receipt whereby coverage incepts conditionally upon submission of full consideration and that all underwriting reqs. are met.
Insurability Type Conditional receipt
Small Employer Medical Expense plan
Accidental Death (aka Multiple Indemnity) rider
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
41. Same as WL but w/ Decreasing Term rider; upon death - pays monthly income for REMAINING term AFTER which pays full death benefit.
Payment of Premium provision
Loss of Earnings Test
Health Maintenance Organization (HMO)
Family Income policy
42. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Factors that determine premium
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Medicare Supplement or Medigap policy
43. War; elective cosmetic surgery; routine dental; work. comp.-covered claims; self-inflicted (intentional); gov't. facility treatment; LTC; private nursing.
Exclusions for Major Medical plan
Suicide clause/provision
Occupational Disability policy
Types of Insurers (by authorization)
44. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.
Free Look provision
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Medicare Supplement or Medigap policy
Types of Insurers (miscellaneous)
45. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.
Dividends
Underwriting risk categories
Primary Insurance Amount (PIA)
Types of Insurers (by authorization)
46. 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
Types of Accident & Health (A&H) providers
Types of Accident & Health insurance
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Modified Endowment Contract (MEC)
47. Plan A is the CORE benefit & is least expensive; All other plans include Plan A + additional benefits. Plans F & J are high deductible. K & L are both deductible & co-pay plans.
Modified Premium Whole Life policy
Plans A-L of Medical Supplement or Medigap
Small Employer Medical Expense plan
Types of Insurers (by domicile)
48. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.
Equity Index Whole Life policy
24 Hour Coverage (CA)
Juvenile Life (aka Jumping Juvenile) policy
Settlement options for Life policy (2 of 2)
49. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.
Preferred Provider Organization (PPO)
Types of Agency Authority
Palliative vs. Curative care
Doctrine of Comity
50. Allows Term policy conversion to Permanent policy w/out medical exam; must be identical or lower death benefit; based on either attained OR original age.
Equity Index Whole Life policy
Supplemental Major Medical plan
Convertibility provision
Medicare Part A (aka Hospital Insurance or HI)
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