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Test your basic knowledge |
CA Life Agent Exam
Start Test
Study First
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. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.
Rate (as defined by CIC)
Key Employee Disability policy
Free Look provision
Dividends
2. Death benefit determined by Insured's financial goals & needs (minus assets).
Doctrine of Comity
Insurer (as defined by CIC)
Blue Cross/Blue Shield
Needs approach (most common)
3. Allows for Term policy renewal @ higher premium w/out medical exam; guarantees insurability; based on actual/attained age.
Annuity Classifications (1 of 5): How premium is paid
Presumptive disability
Renewability provision
Policy delivery
4. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Accidental Death & Dismemberment (AD&D) Life policy
Common Disaster (Simultaneous Death Act) clause/provision
Concealment
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
5. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.
IRS Penalties for Annuities
Current Assumption (aka Interest-Sensitive) Whole Life policy
Trial Application (aka Request for Offer)
Annuity Classifications (3 of 5): Source of income
6. Basic Medical; Major Medical; Comprehensive Major Medical
Types of Medical Plans
Accidental Death & Dismemberment (AD&D) Disability rider
Plans A-L of Medical Supplement or Medigap
Key Employee Disability policy
7. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.
Types of Medical Plans
Equity Index Whole Life policy
Concealment
Estoppel
8. Period of time following any children's survivor benefit & before benefits are provided to employee's widow/widower.
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Adjustable Whole Life policy
Blackout Period
Market Value Adjusted (aka Modified Guaranteed) annuity
9. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.
Employer-Administered plan
Annuity Classifications (5 of 5): # of lives
Types of Accident & Health insurance
Accidental Death (aka Multiple Indemnity) rider
10. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.
Experience vs. Community rating in Group Health plan
Requirements to sell variable life products
Medical cost containment (aka Managed care)
Whole (aka Permanent or Straight) Life policy
11. Prepaid med. benefits for members ONLY w/ approved primary care M.D. (HMO employee); focus on preventative care; low co-pay.
Types of reinsurance
Health Maintenance Organization (HMO)
Free Look provision
Term Life policy
12. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Employer-Administered plan
Supplemental Major Medical plan
Indemnify
13. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.
Partial disability rider
Tax implications of an Annuity (1 of 2)
Dental Plan
Endowment Life policy
14. 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.
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Disability Income policy
Long Term Care (LTC) policy
15. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.
Civil Rights/Pregnancy Discrimination Act
Common Accident provision
Departments of an Insurer
Payment of Premium provision
16. 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.
Valid life insurance contracts must identify...
Equity Index Whole Life policy
24 Hour Coverage (CA)
Loss exposure
17. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).
Variable Universal Life policy
Common Disability Exclusions
Dental Plan
Insurance contract characteristics (2 of 2)
18. Mathematical law stating the larger # of occurrences - the more predictable the losses; used to calculate premiums.
Medical cost containment (aka Managed care)
Law of Large Numbers
Dividends
Variable Universal Life policy
19. Federal law which prohibits companies w/ 15+ employees from decreasing coverage benefits for women affected by pregnancy or childbirth.
Medi-Cal Share Cost plan
Accidental Death (aka Multiple Indemnity) rider
Health Insurance Portability and Accountability Act (HIPAA)
Civil Rights/Pregnancy Discrimination Act
20. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.
Levels of Long Term Care provided
Medicare Part D
Adverse selection
Consolidated Omnibus Budget Reconciliation Act (COBRA)
21. 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.
Dividend options
Occupational Disability policy
Spendthrift provision
Insurance contract characteristics (1 of 2)
22. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.
COBRA Time Limitations
Medi-Cal Share Cost plan
Dependent coverage
Adjustable Whole Life policy
23. Domestic - within home state; Foreign - outside home state; Alien - outside home country.
Concealment
Departments of an Insurer
Time Limit on Certain Defenses provision
Types of Insurers (by domicile)
24. War; elective cosmetic surgery; routine dental; work. comp.-covered claims; self-inflicted (intentional); gov't. facility treatment; LTC; private nursing.
Premium modes
Accidental Death & Dismemberment (AD&D) Disability rider
Survivorship (aka "Last to die") policy
Exclusions for Major Medical plan
25. Waives premium upon disability of Insured until return to work; disability must persist for 6 mths. or longer. Cash value & dividends not affected.
Waiver of Premium (Waiver of Cost of Insurance) rider
Misstatement of Age/Sex provision
Current Assumption (aka Interest-Sensitive) Whole Life policy
Family Income policy
26. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.
Common Accident provision
Tax implications of Disability policy
Medical cost containment (aka Managed care)
Claim Form (aka Proof of Loss Form) provision
27. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.
Variable Life policy (1 of 2)
Adverse selection
Life insurance policy
Credit Life policy
28. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.
Common Accident provision
Waiver of Premium (Waiver of Cost of Insurance) rider
7 Pay Test
Annuity Classifications (1 of 5): How premium is paid
29. Dependent children are covered until 19 or 23 (full-time student only) or until self-sufficient (if handicapped).
Types of Medical Plans
Dependent coverage
Rate (as defined by CIC)
Parole Pardon Rule
30. 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.
Medicare Part A (aka Hospital Insurance or HI)
Business Continuation (aka Buy-Sell) Disability policy
Tax implications of an Estate
Entire Contract provision
31. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.
Underwriting risk categories
AIDS/HIV discrimination
Automatic Premium Loan (APL) provision
Family Income policy
32. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).
Payor (aka Waiver of Payor's Premium) rider
Equity Indexed annuity
Exclusions to Work. Comp.
Types of Insurers (by authorization)
33. Same as WL but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Tax implications of an Annuity (1 of 2)
Variable Life policy (1 of 2)
Types of Insurers (by sector)
Common Disability Exclusions
34. Provides % of monthly income benefit if Insured becomes disabled due to illness or accident.
Disability Income policy
Convertibility provision
Survivorship (aka "Last to die") policy
Group Disability plan
35. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.
Split Dollar Plan
7 Pay Test
Types of Accident & Health (A&H) providers
Permanent vs. Temporary disability
36. The state in which the contract is accepted or delivered is the state that possesses regulatory jurisdiction over Group plan.
Doctrine of Comity
Employee Retirement Income Security Act (ERISA)
Plans A-L of Medical Supplement or Medigap
Long Term Care (LTC) policy
37. Covers entire family w/ WL for breadwinner & (convertible) Level Term for spouse & children (until certain age).
Health Insurance Portability and Accountability Act (HIPAA)
Blue Cross/Blue Shield
Family policy
Waiver of Premium provision
38. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).
Insurable interest
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Types of Insurers (miscellaneous)
Types of Insurers (by authorization)
39. Unilateral - Insurer provides contract; Adhesion - parties must adhere to terms; Aleatory - benefits may not inure equally.
Blackout Period
Social Security Benefit (Supplement) rider
Insurance contract characteristics (1 of 2)
Consolidated Omnibus Budget Reconciliation Act (COBRA)
40. Conditional - coverage is conditional; Personal - parties are people; Good faith - honesty/integrity; Fiduciary - req's financial trust.
Payment of Premium provision
Insurance contract characteristics (2 of 2)
Human Life Value approach
Primary Insurance Amount (PIA)
41. Federal law which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.
Impairment (Exclusion) rider
Cost of Living Adjustment (COLA) Disability rider
Age Discrimination in Employment Act (ADEA)
Variable Life policy (2 of 2)
42. Guaranteed min. interest rate on cash value buildup but possible higher rate if short-term investment returns higher than expected.
Key Employee Disability policy
Split Dollar Plan
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Guaranteed Insurability Life rider
43. Earned premium is $ paid for coverage to date. Unearned premium is $ paid & returnable due to coverage not provided.
Legal Action provision
Earned vs. Unearned premium
COBRA Time Limitations
Revocable vs. Irrevocable beneficiary
44. Qualified Annuity - Tax-deductible contributions & tax-deferred growth but fully taxable w/drawals.
Types of Term Life policies
Tax implications of an Annuity (1 of 2)
Medicare Part C (aka Medicare Advantage)
Applicant Representations vs. Warranties
45. Permanent disability due to total loss of sight - hearing - speech or use of 2 + limbs; benefits paid even while continuing to work.
Major Medical plan
Health Reimbursement Account (HRA)
Tax implications of an Annuity (1 of 2)
Presumptive disability
46. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.
Flexible Spending Account (FSA)
Insuring clause/provision (aka Insuring Agreement)
Renewability provision
Estoppel
47. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Accidental Death & Dismemberment (AD&D) Disability rider
Beneficiary provisions
Life insurance policy
Needs approach (most common)
48. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.
Legal Action provision
Business Continuation (aka Buy-Sell) Disability policy
Comprehensive Major Medical plan
Limited Pay Whole Life policy
49. Part A - Inpatient hospital deductibles vary on # of days; limited reserve days; finite benefit; 1st 3 pints blood; Part B - 20% co-payment.
Trusts
Levels of Long Term Care provided
Total disability (any-occupational definition)
Medicare Part A & B "Gaps"
50. Agreement - Offer & acceptance; Consideration - application + premium; Legal capacity - licensed &/or competent; Legal purpose - public good.
Family Maintenance policy
Elements to contract
Exclusions for Major Medical plan
Tax implications of Dividends - Loans & Interest