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. Death benefit determined by Insured's financial goals & needs (minus assets).






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






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






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






5. Process which prevents claim denial as a result of false statement or promise (made by Insurer) - which was relied upon by Insured.






6. Same as WL but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.






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






8. 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.






9. Identical to Incontestable Clause in Life policy.






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






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






12. 'The inability to perform your OWN normal occupation or daily duties'.






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






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






15. 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.






16. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.






17. 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.






18. An unintentional mistake committed by an insurance representative; may be covered by E&O insurance.






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






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






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






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






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






24. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.






25. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.






26. 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.






27. 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.






28. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.






29. 1: Tax-free lump sum; 2: Monthly pay-outs for fixed time; 3: Fixed monthly payments until depleted.






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






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






32. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)






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






34. Policy owner must notify Insurer of loss either in writing - in person or by phone w/in 20 days.






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






36. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.






37. Death benefit determined by Insured's projected lost earnings potential.






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






39. If Insured changes to: more hazardous job - benefits reduced; less hazardous job - premiums reduce.






40. 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.






41. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.






42. Req. by CA statute & may provide workers coverage for action-over claims.






43. Provides disability income during surgery recovery from life-threatening condition (& sometimes cosmetic surgery).






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






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






46. The state in which the contract is accepted or delivered is the state that possesses regulatory jurisdiction over Group plan.






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






48. No-charge annuity w/drawals allowed up to 10% of total - THEN penalized on sliding scale based on # policy yrs.; conditionally waived.






49. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.






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