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






2. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.






3. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).






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






5. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.






6. No deductible coverage for: daily room/board; ancillary costs; surgeon &/or physician expense (for added premium).






7. Peril is the CAUSE of loss. Hazard is a condition that increases LIKELIHOOD of loss.






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






9. Coverage for catastrophic loss w/ high limits - front end deductible; co-insurance (80/20%); blanket coverage; stop loss max.






10. Prohibited w/ regard to testing for people of same class; test results must remain confidential; coverage may be declined (once discovered).






11. Provides coverage for specific disease(s) - such as cancer or leukemia.






12. Earned premium is $ paid for coverage to date. Unearned premium is $ paid & returnable due to coverage not provided.






13. 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.






14. Two death benefit options - Option A: death benefit ONLY; Option B: death benefit + cash value; death benefit NOT guaranteed.






15. 1: parties to contract; 2: insured party or life; 3: insurable interest - if 3rd party; 4: risks insured against; 5: policy period (term); 6: premium & mode.






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






17. Allows for Term policy renewal @ higher premium w/out medical exam; guarantees insurability; based on actual/attained age.






18. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.






19. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.






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






21. War; elective cosmetic surgery; routine dental; work. comp.-covered claims; self-inflicted (intentional); gov't. facility treatment; LTC; private nursing.






22. Identical to Incontestable Clause in Life policy.






23. Level - fixed death benefit - premium fixed until renewal; Decreasing - death benefit decreases over term - premium fixed until renewal; Increasing - death benefit increases over term - premium fixed until renewal.






24. Covers disabilities occurring both "on" AND "off" job; "on" job benefits paid in addition to work. comp. - if applicable (i.e. individual plan).






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






26. Responsible adult trustee designated to manage death benefits for minor child beneficiary until adulthood.






27. Guaranteed min. interest rate on cash value buildup but possible higher rate if short-term investment returns higher than expected.






28. Non-qualified Annuity - Non-deductible contributions & tax-deferred growth. At pay-out - tax-free principal but taxable growth.






29. Benefits automatically increase annually based on inflationary index (i.e. Consumer Price Index) OR flat rate (5% max.).






30. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.






31. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.






32. 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






33. Receipt whereby coverage incepts immediately upon submission of full consideration - unless declined & premium refunded.






34. Time extension of benefits based on "qualifying" event. 18 mth. extension if laid off or fired; 36 mth. extension if death - divorce or child leaves home.






35. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.






36. Type of partial disability rider - which pays fluctuating % of lost income w/out time limit.






37. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).






38. Premiums determined by target cash values or death benefit; partial cash value w/drawals allowed; transparent policy w/ unbundled premium.






39. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.






40. 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.






41. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.






42. Provides professional services - rehabilitation - training/re-training & related costs to assist Insured in returning to work.






43. Intentional OR unintentional failure to disclose material underwriting facts that should have been disclosed; grounds for policy rescission.






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






45. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.






46. Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling - stock investment).






47. Same as Comprehensive Major Medical but w/ integrated deductible; much more expensive.






48. 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






49. Prepaid med. benefits for "subscribers" @ approved facilities; many non-profit; Blue Cross - Hospital stays; Blue Shield - M.D. costs.






50. Upon death - death benefit is paid + the aggregate of premiums paid to date; add-on to Term policy ONLY.