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. 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.






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






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






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






5. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").






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






7. Provides % of monthly income benefit if Insured becomes disabled due to illness or accident.






8. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.






9. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.






10. Conditional - coverage is conditional; Personal - parties are people; Good faith - honesty/integrity; Fiduciary - req's financial trust.






11. An attempt to contain costs by employing various strategies - including wellness programs - preventative testing - outpatient & alternative procedures.






12. 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).






13. 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.






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






15. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.






16. Fixed premium w/ guaranteed min. death benefit that may increase due to higher than expected investment returns.






17. 1: Tax-free lump sum; 2: Monthly pay-outs for fixed time; 3: Fixed monthly payments until depleted.






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






19. Govt. organization providing health care benefits for dependents of military personnel.






20. Same as WL but w/ adjustable death benefit (& corresponding premium) & over-fund option but w/ annually renewable term (ART).






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






22. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.






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






24. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.






25. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).






26. Intentional deception; grounds for rescission.






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






28. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.






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






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






31. Tendency of poorer risks to seek insurance.






32. 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.






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






34. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.






35. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.






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






37. 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.






38. Provides benefit during Social Security "black-out" period - up to 1 yr.






39. Although death benefit is tax-free - it is included in gross estate value so federal &/or state taxes may apply to a portion in excess of fixed federal limit.






40. Provides for continued operation of business if partner dies - by allowing surviving partner(s) to buy deceased partner's interest in business.






41. Beneficiary has right to leave death benefits / Insurer to protect $ from creditors; interest (taxable) paid on retained funds.






42. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.






43. Group plan initially self-funded by employer (like SIR); after which - group plan Insurer covers (up to policy limit); requires TPA.






44. Physical - slippery floor; Moral - dishonest acts; Morale - carelessness or recklessness.






45. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.






46. Same as WL but w/ Decreasing Term rider; upon death - pays monthly income for REMAINING term AFTER which pays full death benefit.






47. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.






48. 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.






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






50. Allows for use of HMO/PPO or other private carrier to provide expanded benefits @ additional premium & if enrolled in BOTH Parts A & B.