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. 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.






2. Receipt whereby coverage incepts ONLY after underwriting approval.






3. Non-qualified Annuity - Non-deductible contributions & tax-deferred growth. At pay-out - tax-free principal but taxable growth.






4. Two death benefit options - Option A: death benefit ONLY; Option B: death benefit + cash value; death benefit NOT guaranteed.






5. 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.






6. Written policy terms supersede oral statements made prior to policy issue.






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






8. 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.






9. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.






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






11. A lapsed policy may be reinstated if not longer than 3-5 yrs. - & proof of insurability re-established - & back premiums + interest paid.






12. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.






13. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.






14. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.






15. Death benefit is NOT taxable. Cash value grows tax-deferred but cost basis (base premium) is not taxable - only interest is.






16. Same as WL but premium low for 1st 5 yrs. - THEN has annual premium increases for set # yrs. - THEN level premium.






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






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






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






20. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.






21. Receipt whereby coverage incepts immediately upon submission of full consideration - unless declined & premium refunded.






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






23. Federal law to protect Federal employees' (& their beneficiaries') pension - group insurance - & welfare benefits.






24. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.






25. 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.






26. 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






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






28. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.






29. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.






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






31. Federal law which prohibits companies w/ 15+ employees from decreasing coverage benefits for women affected by pregnancy or childbirth.






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






33. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.






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






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






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






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






38. Process whereby a reinsurer reinsures w/ another reinsurer.






39. Covers disabilities occurring ONLY "off" job; benefits do not overlap work. comp. (i.e. Group plan).






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






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






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






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






44. 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.






45. 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.






46. 'The inability to perform ANY gainful occupation'.






47. Mandatory 100% employer-funded coverage for injuries/illnesses occurring "on" job; full-time employees only; exclusive remedy. Provides: 1: unlimited medical benefit; 2: survivor income replacement & funeral ($5 -000 max.); 3: disability benefit @ 66


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






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






50. Provides hospital insurance automatically @ age 65 (if FICA qualified) @ no fee but may have deductible & co-pay.