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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. Written policy terms supersede oral statements made prior to policy issue.
Parole Pardon Rule
Loss exposure
Business Continuation (aka Buy-Sell) Disability policy
Permanent vs. Temporary disability
2. Dependent children are covered until 19 or 23 (full-time student only) or until self-sufficient (if handicapped).
Variable Life policy (1 of 2)
Dependent coverage
Incontestability clause/provision
Return of Cash Value rider
3. 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.
Types of Accident & Health (A&H) providers
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Annuity Classifications (5 of 5): # of lives
Consolidated Omnibus Budget Reconciliation Act (COBRA)
4. Fraternal - non-profit - members only; Reciprocal - unincorp'd org. - members insure each other; Lloyd's Assoc. - groups sharing risks; Surplus lines - special market risks.
Tax implications of medical plans
Types of Insurers (miscellaneous)
Policy loans
Modified Premium Whole Life policy
5. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.
Joint Life (aka "First to die") policy
Applicant Representations vs. Warranties
Types of Agency Authority
Life insurance policy
6. Must be delivered in person or by certified - registered or 1st-class mail w/ signature - unless waived by Insurance Commissioner.
Business Continuation (aka Buy-Sell) policy
Preferred Provider Organization (PPO)
1035 Exchange
Policy delivery
7. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.
Law of Large Numbers
Supplemental Major Medical plan
Policy loans
Cross Purchase Plan
8. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.
Automatic Premium Loan (APL) provision
Doctrine of Comity
Cost of Living Adjustment (COLA) Life rider
Rehabilitation rider
9. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.
Insurance contract characteristics (1 of 2)
Key Employee policy
Point of Service plan
Claim Form (aka Proof of Loss Form) provision
10. Earned premium is $ paid for coverage to date. Unearned premium is $ paid & returnable due to coverage not provided.
Preferred Provider Organization (PPO)
Proof of Loss provision
Earned vs. Unearned premium
Age Discrimination in Employment Act (ADEA)
11. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.
Types of Insurers (by ownership)
Common Accident provision
Levels of Long Term Care provided
Dividends
12. Same as WL but premium low for set # yrs. - THEN premiums vary (+ or -) based on Insurer's investment returns - w/ Gmax.
Adverse selection
Indeterminate Premium Whole Life policy
Small Employer Medical Expense plan
Total disability (as commonly defined)
13. Dividends are NOT taxable but interest is. Loan interest is NOT tax-deductible. Interest paid by Insurer on retained funds is taxable.
Tax implications of Dividends - Loans & Interest
Entire Contract provision
IRS Penalties for Annuities
Concealment exceptions
14. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).
Cost of Living Adjustment (COLA) Life rider
Preferred Provider Organization (PPO)
Conformity with State Statute provision
Suicide clause/provision
15. Benefits NOT taxable; employer-paid premiums deductible to employer; individual plans not deductible unless over 7 1/2% of adjusted gross income - then excess deductible.
Medicare Part A (aka Hospital Insurance or HI)
Long Term Care (LTC) policy
Accidental Death & Dismemberment (AD&D) Disability rider
Tax implications of medical plans
16. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.
Beneficiary provisions
Health Maintenance Organization (HMO)
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Proof of Loss provision
17. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.
Types of Renewability provisions
Revocable vs. Irrevocable beneficiary
Primary Insurance Amount (PIA)
Approval Type Conditional receipt
18. Provides % of monthly income benefit if Insured becomes disabled due to illness or accident.
Valid life insurance contracts must identify...
Entire Contract provision
Key Employee policy
Disability Income policy
19. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).
Retrocession
1035 Exchange
Payment of Premium provision
Renewability provision
20. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.
Types of Insurers (miscellaneous)
Grace Period provision
Trial Application (aka Request for Offer)
Legal Action provision
21. A lapsed policy may be reinstated if not longer than 3-5 yrs. - & proof of insurability re-established - & back premiums + interest paid.
Survivorship (aka "Last to die") policy
Family or Dependents rider
Annuity Classifications (2 of 5): When benefits begin
Reinstatement provision
22. Responsible adult trustee designated to manage death benefits for minor child beneficiary until adulthood.
Loss of Earnings Test
Waiver of Premium (Waiver of Cost of Insurance) rider
Conformity with State Statute provision
Trusts
23. 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
Rate (as defined by CIC)
Grace Period provision
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
24. Req. by CA statute & may provide workers coverage for action-over claims.
Employer Liability
Medical Savings Account (MSA) & Health Savings Account (HSA)
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Annuity Classifications (3 of 5): Source of income
25. 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.
Key Employee Disability policy
Annuity
Tax implications of Disability policy
Loss exposure
26. 'The inability to perform ANY gainful occupation'.
Total disability (any-occupational definition)
Tax implications of an Annuity (1 of 2)
Time Limit on Certain Defenses provision
Tax implications of an Estate
27. Non-qualified Annuity - Non-deductible contributions & tax-deferred growth. At pay-out - tax-free principal but taxable growth.
Tax implications of an Annuity (1 of 2)
Insurable interest
Parole Pardon Rule
Annuity
28. Basic Medical; Major Medical; Comprehensive Major Medical
Rate (as defined by CIC)
Types of Medical Plans
Tax implications of an Annuity (1 of 2)
Business Continuation (aka Buy-Sell) Disability policy
29. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.
Premium modes
Health Reimbursement Account (HRA)
Departments of an Insurer
Medicaid/Medi-Cal
30. Provides professional services - rehabilitation - training/re-training & related costs to assist Insured in returning to work.
Adjustable Whole Life policy
Health Insurance Portability and Accountability Act (HIPAA)
Rate (as defined by CIC)
Rehabilitation rider
31. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.
CA Work. Comp. Statutes
Free Look provision
Credit Life policy
Term Life policy
32. Allows for Term policy renewal @ higher premium w/out medical exam; guarantees insurability; based on actual/attained age.
Renewability provision
Dividend options
Health Insurance Portability and Accountability Act (HIPAA)
Concealment exceptions
33. Death benefit determined by Insured's financial goals & needs (minus assets).
Loss of Earnings Test
Needs approach (most common)
Comprehensive Major Medical plan
Rehabilitation rider
34. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.
Cash value
Viatical Settlement Provider (VSP)
Payment of Premium provision
Time Limit on Certain Defenses provision
35. Peril is the CAUSE of loss. Hazard is a condition that increases LIKELIHOOD of loss.
Mortality vs. Morbidity tables
Renewability provision
Term Life policy
Peril vs. Hazard
36. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.
Family policy
Non-forfeiture options for WL policy
Return of Cash Value rider
Rate (as defined by CIC)
37. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.
Rescission
Approval Type Conditional receipt
Spendthrift provision
Limited Pay Whole Life policy
38. Agreement - Offer & acceptance; Consideration - application + premium; Legal capacity - licensed &/or competent; Legal purpose - public good.
Medicaid/Medi-Cal
Elements to contract
Types of Insurers (by ownership)
Approval Type Conditional receipt
39. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.
Joint Life (aka "First to die") policy
Medicaid/Medi-Cal
Common Disaster (Simultaneous Death Act) clause/provision
Single Pay Whole Life policy
40. No deductible coverage for: daily room/board; ancillary costs; surgeon &/or physician expense (for added premium).
Accidental Death (aka Multiple Indemnity) rider
Exclusions to Work. Comp.
Basic Medical plan
Total disability (as commonly defined)
41. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.
Long Term Care (LTC) policy
Settlement options for Life policy (2 of 2)
Point of Service plan
Applicant Representations vs. Warranties
42. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.
Annuity
Experience vs. Community rating in Group Health plan
Conformity with State Statute provision
Family Maintenance policy
43. Facultative - case by case agreements; Automatic/Treaty - automatic acceptance of risk percentage per previous agreement.
Types of reinsurance
Types of Renewability provisions
Entire Contract provision
Guaranteed Insurability Life rider
44. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).
Payor (aka Waiver of Payor's Premium) rider
Loss of Earnings Test
Pure risk vs. Speculative risk
Basic Medical plan
45. Employer w/ 25 or less employees must offer all eligible employees @ least 2 medical plan options where pre-existing conditions can't be excluded more than 1 yr.
Medicare Supplement or Medigap policy
Small Employer Medical Expense plan
Whole (aka Permanent or Straight) Life policy
Life insurance policy
46. Period of time following any children's survivor benefit & before benefits are provided to employee's widow/widower.
Claim Form (aka Proof of Loss Form) provision
Cost of Living Adjustment (COLA) Disability rider
Current Assumption (aka Interest-Sensitive) Whole Life policy
Blackout Period
47. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.
Juvenile Life (aka Jumping Juvenile) policy
Estoppel
Equity Index Whole Life policy
Insuring clause/provision (aka Insuring Agreement)
48. Excludes coverage for specific injury/illness either temporarily or permanently in order to eliminate pre-existing condition.
Entire Contract provision
Survivorship (aka "Last to die") policy
Impairment (Exclusion) rider
Dividends
49. Federal law to protect Federal employees' (& their beneficiaries') pension - group insurance - & welfare benefits.
Annuity Classifications (3 of 5): Source of income
Employee Retirement Income Security Act (ERISA)
Credit Life policy
Accidental Death (aka Multiple Indemnity) rider
50. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.
Medicare Part A (aka Hospital Insurance or HI)
Business Overhead Expense (BOE) Disability policy
Misstatement of Age/Sex provision
Renewability provision