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. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.






2. Mathematical law stating the larger # of occurrences - the more predictable the losses; used to calculate premiums.






3. 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).






4. Insured can seek legal action against Insurer for denial of claim only after 60 days and up to 3 yrs. after providing proof of loss.






5. Covers entire family w/ WL for breadwinner & (convertible) Level Term for spouse & children (until certain age).






6. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.






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






8. Intentional deception; grounds for rescission.






9. Price of insurance per exposure unit.






10. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.






11. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.






12. Refund of 50-80% of premium (minus claims paid) every 5-10 yrs. OR age 65; expensive!






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






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






15. 1: Req. - unless self-employed; 2: 7-day wait for disability benefits; 3: Premium based on ex-mod; 4: Rates approved by CDI; 5: to sell - must satisfy education reqs.






16. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.






17. Treating or mitigating loss exposures through 1: avoidance; 2: retention (deductibles); 3: sharing; 4: reduction; or 5: transfer.






18. 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.






19. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.






20. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.






21. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.






22. Coverage remains in effect for 31 days past premium due date; benefits paid during grace period would be deducted from sum.






23. 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.






24. Combination of Basic Medical & Major Medical in one policy; Basic pays 1st - then Major Medical w/ corridor deductible.






25. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.






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






27. Allows policy owner to w/draw set % of death benefit upon verification of terminal illness w/ expectancy 12-24 mths.; generally tax-free.






28. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.






29. WL policy covering 2 or more Insureds but ONLY payable upon death of LAST Insured - generally low premium but high death benefit.






30. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.






31. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.






32. Private sector (Commercial) - provides LA&H - P&C - & LTC; Public sector (Gov't) - provides flood - work. comp. - Medicare/Medicaid - Group Life (SGLI/FEGLI).






33. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.






34. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).






35. Provides supplemental coverage for physician/surgeon fees if enrolled (during enrollment period ONLY) & pay monthly premium w/ deductible and co-insurance.






36. Basic Medical; Major Medical; Comprehensive Major Medical






37. Federal program financed by payroll taxes provided equally by both employer & employee OR entirely by individual (if self-employed). Provides benefits for: Medicare @ age 65+; retirement; $255 lump sum death benefit; (limited) disability; survivors;






38. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.






39. Qualified Annuity - Tax-deductible contributions & tax-deferred growth but fully taxable w/drawals.






40. Agreement - Offer & acceptance; Consideration - application + premium; Legal capacity - licensed &/or competent; Legal purpose - public good.






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






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






43. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.






44. Federal law to protect Federal employees' (& their beneficiaries') pension - group insurance - & welfare benefits.






45. Tendency of poorer risks to seek insurance.






46. Identical to Incontestable Clause in Life policy.






47. Agents - represent Insurer; Brokers - represent themselves & Insured; Solicitors - represent one agent to solicit leads.






48. 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.






49. A&H - A&S - Sickness only; Medical; Disability; Accident only; Travel accident; LTC; Medicare supplement; AD&D; Dental/Vision/Prescription; Limited.






50. War - 2 types; Suicide (1st 2 yrs.); Aviation (non-commercial); Hazardous hobbies; Criminal acts; Alcohol/Drug influenced.