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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. Allows Insured to increase death benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age.
Guaranteed Insurability Life rider
Concealment exceptions
Legal Action provision
Common Life Exclusions
2. An attempt to contain costs by employing various strategies - including wellness programs - preventative testing - outpatient & alternative procedures.
Medical cost containment (aka Managed care)
Business Continuation (aka Buy-Sell) Disability policy
Annuity surrender charges
Major Medical plan
3. Domestic - within home state; Foreign - outside home state; Alien - outside home country.
Exclusions for Major Medical plan
Considerations in replacing Health insurance
Business Continuation (aka Buy-Sell) policy
Types of Insurers (by domicile)
4. Written policy terms supersede oral statements made prior to policy issue.
Errors & Omissions (E&O)
Flexible Spending Account (FSA)
Parole Pardon Rule
Current Assumption (aka Interest-Sensitive) Whole Life policy
5. Prohibited w/ regard to testing for people of same class; test results must remain confidential; coverage may be declined (once discovered).
Family Maintenance policy
AIDS/HIV discrimination
1035 Exchange
Annuity
6. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).
Total disability (any-occupational definition)
Types of Insurers (by authorization)
Valid life insurance contracts must identify...
Employer Liability
7. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.
Misstatement of Age/Sex provision
Business Overhead Expense (BOE) Disability policy
Relation of Earnings to Insurance provision
Primary Insurance Amount (PIA)
8. 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.
Dental Plan
Parole Pardon Rule
Tax implications of Death Benefit & Cash Value
Equity Indexed annuity
9. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.
Policy delivery
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Rescission
Common Disability Exclusions
10. Mortality is the statistical possibility of death @ each age. Morbidity is the statistical possibility & extent of disability @ each age.
Mortality vs. Morbidity tables
Dividend options
Considerations in replacing Health insurance
Automatic Premium Loan (APL) provision
11. 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
Dread Disease policy
Penalties for violating AIDS/HIV privacy laws
Annuity Classifications (3 of 5): Source of income
12. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.
Blue Cross/Blue Shield
Medi-Cal Share Cost plan
CHAMPUS (aka TriCare)
Comprehensive Major Medical plan
13. Prepaid med. benefits for "subscribers" @ approved facilities; many non-profit; Blue Cross - Hospital stays; Blue Shield - M.D. costs.
Blue Cross/Blue Shield
Types of Insurers (by sector)
Whole (aka Permanent or Straight) Life policy
Insurable interest
14. Responsible adult trustee designated to manage death benefits for minor child beneficiary until adulthood.
Trusts
Joint Life (aka "First to die") policy
Concealment
Medicare Part A & B "Gaps"
15. Govt. organization providing health care benefits for dependents of military personnel.
Business Continuation (aka Buy-Sell) policy
CHAMPUS (aka TriCare)
Types of Insurers (miscellaneous)
Dread Disease policy
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.
Proof of Loss provision
Spendthrift provision
Adverse selection
Settlement options for Life policy (2 of 2)
17. Covers disabilities occurring both "on" AND "off" job; "on" job benefits paid in addition to work. comp. - if applicable (i.e. individual plan).
Reinstatement provision
Occupational Disability policy
Doctrine of Comity
Dental Plan
18. Info already known; Info that should have been known; Waived info; Irrelevant info.
Total disability (as commonly defined)
Variable Life policy (1 of 2)
Types of Accident & Health (A&H) providers
Concealment exceptions
19. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.
Credit Life policy
Medicare Part A (aka Hospital Insurance or HI)
Return of Premium rider
Social Security Benefit (Supplement) rider
20. Insured can seek legal action against Insurer for denial of claim only after 60 days and up to 3 yrs. after providing proof of loss.
Annuity surrender charges
Accidental Death & Dismemberment (AD&D) Disability rider
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Legal Action provision
21. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.
Equity Index Whole Life policy
Pure risk vs. Speculative risk
7 Pay Test
Law of Large Numbers
22. Death benefit determined by Insured's projected lost earnings potential.
Current Assumption (aka Interest-Sensitive) Whole Life policy
Human Life Value approach
Exclusions to Work. Comp.
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
23. Allows for use of HMO/PPO or other private carrier to provide expanded benefits @ additional premium & if enrolled in BOTH Parts A & B.
Estoppel
Supplemental Major Medical plan
Loss of Earnings Test
Medicare Part C (aka Medicare Advantage)
24. Same as WL but premium low for 1st 5 yrs. - THEN has annual premium increases for set # yrs. - THEN level premium.
Key Employee Disability policy
24 Hour Coverage (CA)
Types of Medical Plans
Graded Premium Whole Life policy
25. 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
Business Overhead Expense (BOE) Disability policy
Loss exposure
Phases of an annuity
Exclusions to Work. Comp.
26. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Dependent coverage
Family Income policy
Primary Insurance Amount (PIA)
27. Primary - if 2 or more - equally shared; Contingent (Secondary) - only if primary dead; Tertiary - only if both primary & secondary dead. If none listed - goes to estate.
Beneficiary provisions
Trusts
Medicare
Recurrent disability clause/provision
28. Tendency of poorer risks to seek insurance.
Adverse selection
Medical Savings Account (MSA) & Health Savings Account (HSA)
Residual disability rider
Tax implications of an Estate
29. 'The inability to perform your OWN normal occupation or daily duties'.
Tax implications of Disability policy
Total disability (as commonly defined)
Credit Life policy
Primary Insurance Amount (PIA)
30. Same as Comprehensive Major Medical but w/ integrated deductible; much more expensive.
Supplemental Major Medical plan
Reinsurance
Renewability provision
Life insurance policy
31. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.
Health Reimbursement Account (HRA)
Free Look provision
Workers' Compensation insurance
Fraud
32. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).
Annuity Classifications (2 of 5): When benefits begin
Types of Insurers (by domicile)
Cost of Living Adjustment (COLA) Life rider
Types of Renewability provisions
33. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.
Types of Medical Plans
Small Employer Medical Expense plan
Primary Insurance Amount (PIA)
Relation of Earnings to Insurance provision
34. Provides coverage for specific disease(s) - such as cancer or leukemia.
Dread Disease policy
Variable Universal Life policy
Factors that determine premium
Renewability provision
35. 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.
Tax implications of an Annuity (1 of 2)
Valid life insurance contracts must identify...
Health Reimbursement Account (HRA)
Residual disability rider
36. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.
Peril vs. Hazard
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Phases of an annuity
Presumptive disability
37. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.
Market Value Adjusted (aka Modified Guaranteed) annuity
Adjustable Whole Life policy
Common Accident provision
Occupational Disability policy
38. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.
Types of Accident & Health (A&H) providers
Types of Insurers (miscellaneous)
Indeterminate Premium Whole Life policy
Medicaid/Medi-Cal
39. Treating or mitigating loss exposures through 1: avoidance; 2: retention (deductibles); 3: sharing; 4: reduction; or 5: transfer.
Family or Dependents rider
Tax implications of an Annuity (1 of 2)
Tax implications of Disability policy
Risk management
40. Dependent children are covered until 19 or 23 (full-time student only) or until self-sufficient (if handicapped).
Types of Insurers (by ownership)
Comprehensive Major Medical plan
Insurance contract characteristics (2 of 2)
Dependent coverage
41. Price of insurance per exposure unit.
Rate (as defined by CIC)
Survivorship (aka "Last to die") policy
COBRA Time Limitations
Medi-Cal Share Cost plan
42. Same as WL but w/ adjustable death benefit (& corresponding premium) & over-fund option but w/ annually renewable term (ART).
Non-Occupational Disability policy
Cost of Living Adjustment (COLA) Life rider
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Notice of Claim provision
43. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.
Insurance contract characteristics (1 of 2)
Mortality vs. Morbidity tables
Entire Contract provision
IRS Penalties for Annuities
44. Federal law which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.
Premium modes
Age Discrimination in Employment Act (ADEA)
Viatical Settlement Provider (VSP)
Settlement options for Life policy (1 of 2)
45. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.
Family Income policy
7 Pay Test
Departments of an Insurer
Viatical Settlement Provider (VSP)
46. Privately-provided or Medicare-provided (if no private carrier) prescription drug plans for qualified individuals but w/ premium - deductible & co-pay.
Medicare Part D
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Key Employee Disability policy
Accidental Death & Dismemberment (AD&D) Disability rider
47. Provides % of monthly income benefit if Insured becomes disabled due to illness or accident.
Insuring clause/provision (aka Insuring Agreement)
Employee Retirement Income Security Act (ERISA)
Tax implications of Disability policy
Disability Income policy
48. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.
Time Limit on Certain Defenses provision
Types of Insurers (by ownership)
Types of Medical Plans
Settlement options for Life policy (1 of 2)
49. Provides for continued operation of business if partner dies - by allowing surviving partner(s) to buy deceased partner's interest in business.
Penalties for violating AIDS/HIV privacy laws
Settlement options for Life policy (1 of 2)
Business Continuation (aka Buy-Sell) policy
Waiver of Premium provision
50. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.
Proof of Loss provision
Relation of Earnings to Insurance provision
Time Limit on Certain Defenses provision
Adjustable Whole Life policy