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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. Monthly; Quarterly; Semi-annually; Annually (cheapest due to less admin cost).
Policy delivery
Claim Form (aka Proof of Loss Form) provision
Split Dollar Plan
Premium modes
2. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.
Dividend options
Common Life Exclusions
Insurer (as defined by CIC)
Types of Accident & Health (A&H) providers
3. Dividends are NOT taxable but interest is. Loan interest is NOT tax-deductible. Interest paid by Insurer on retained funds is taxable.
Types of hazards
Tax implications of Dividends - Loans & Interest
Non-Occupational Disability policy
Medical Savings Account (MSA) & Health Savings Account (HSA)
4. Provides supplemental coverage for physician/surgeon fees if enrolled (during enrollment period ONLY) & pay monthly premium w/ deductible and co-insurance.
Penalties for violating AIDS/HIV privacy laws
Insurability Type Conditional receipt
Types of reinsurance
Medicare Part B (aka Supplemental Medical Insurance or SMI)
5. Coverage remains in effect for 31 days past premium due date; benefits paid during grace period would be deducted from sum.
Types of Medical Plans
Survivorship (aka "Last to die") policy
Life insurance policy
Grace Period provision
6. War - 2 types; Suicide (1st 2 yrs.); Aviation (non-commercial); Hazardous hobbies; Criminal acts; Alcohol/Drug influenced.
Claim Form (aka Proof of Loss Form) provision
Employer Liability
Common Life Exclusions
Comprehensive Major Medical plan
7. Covers disabilities occurring ONLY "off" job; benefits do not overlap work. comp. (i.e. Group plan).
Non-Occupational Disability policy
Convertibility provision
Business Continuation (aka Buy-Sell) Disability policy
CA Work. Comp. Statutes
8. 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.
Requirements to sell variable life products
Time Limit on Certain Defenses provision
Major Medical plan
Medicare
9. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.
Medicaid/Medi-Cal
Trial Application (aka Request for Offer)
Annuity Classifications (2 of 5): When benefits begin
Primary Insurance Amount (PIA)
10. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.
Major Medical plan
Annuity
Term Life policy
Medicare Supplement or Medigap policy
11. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.
Reinsurance
Factors that determine premium
Claim Form (aka Proof of Loss Form) provision
Suicide clause/provision
12. 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.
Legal Action provision
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Misstatement of Age/Sex provision
Variable Life policy (2 of 2)
13. Permanent disability due to total loss of sight - hearing - speech or use of 2 + limbs; benefits paid even while continuing to work.
Peril vs. Hazard
Types of Medical Plans
Presumptive disability
Major Medical plan
14. Same as WL but premium low for set # yrs. - THEN premiums vary (+ or -) based on Insurer's investment returns - w/ Gmax.
Indeterminate Premium Whole Life policy
Convertibility provision
Current Assumption (aka Interest-Sensitive) Whole Life policy
Enhanced Ordinary (aka Extraordinary) Whole Life policy
15. No deductible coverage for: daily room/board; ancillary costs; surgeon &/or physician expense (for added premium).
Revocable vs. Irrevocable beneficiary
Basic Medical plan
Return of Cash Value rider
Non-forfeiture options for WL policy
16. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.
Revocable vs. Irrevocable beneficiary
Annuity
Insurance contract characteristics (2 of 2)
Peril vs. Hazard
17. Domestic - within home state; Foreign - outside home state; Alien - outside home country.
Insurance contract characteristics (1 of 2)
Impairment (Exclusion) rider
Types of Insurers (by domicile)
Civil Rights/Pregnancy Discrimination Act
18. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.
Tax implications of Disability policy
Primary Insurance Amount (PIA)
Beneficiary provisions
Social Security Benefit (Supplement) rider
19. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.
Cost of Living Adjustment (COLA) Disability rider
Whole (aka Permanent or Straight) Life policy
Employer Liability
Business Continuation (aka Buy-Sell) Disability policy
20. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.
Presumptive disability
Blackout Period
Payment of Premium provision
Return of Cash Value rider
21. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.
Experience vs. Community rating in Group Health plan
Insurance contract characteristics (2 of 2)
Family Income policy
Incontestability clause/provision
22. 1: Tax-free lump sum; 2: Monthly pay-outs for fixed time; 3: Fixed monthly payments until depleted.
Endowment Life policy
Needs approach (most common)
Types of hazards
Settlement options for Life policy (1 of 2)
23. Covers entire family w/ WL for breadwinner & (convertible) Level Term for spouse & children (until certain age).
Cross Purchase Plan
Disability Income policy
Family policy
Business Continuation (aka Buy-Sell) Disability policy
24. Fixed premium w/ guaranteed min. death benefit that may increase due to higher than expected investment returns.
Variable Life policy (2 of 2)
Joint Life (aka "First to die") policy
Revocable vs. Irrevocable beneficiary
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
25. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.
Common Accident provision
Common Disaster (Simultaneous Death Act) clause/provision
Mortality vs. Morbidity tables
Time Limit on Certain Defenses provision
26. A company providing lump sum buyout (50-90% of total) of Life policy; becomes owner & beneficiary & assumes premium payments; usually terminally ill viator.
Family Income policy
Grace Period provision
Viatical Settlement Provider (VSP)
Annuity Classifications (2 of 5): When benefits begin
27. 4: Funds retained by Insurer until w/drawn - interest ONLY paid monthly (taxable); 5: Paid-up immediate annuity.
Social Security Benefit (Supplement) rider
Settlement options for Life policy (2 of 2)
Experience vs. Community rating in Group Health plan
Recurrent disability clause/provision
28. Refund of 50-80% of premium (minus claims paid) every 5-10 yrs. OR age 65; expensive!
Return of Premium rider
Misstatement of Age/Sex provision
Impairment (Exclusion) rider
Transplant/Cosmetic Surgery rider
29. Death benefit determined by Insured's projected lost earnings potential.
Family Maintenance policy
Human Life Value approach
Equity Indexed annuity
Viatical Settlement Provider (VSP)
30. Prepaid med. benefits for "subscribers" @ approved facilities; many non-profit; Blue Cross - Hospital stays; Blue Shield - M.D. costs.
Annuity Classifications (1 of 5): How premium is paid
Proof of Loss provision
Blue Cross/Blue Shield
Reinsurance
31. Intentional OR unintentional failure to disclose material underwriting facts that should have been disclosed; grounds for policy rescission.
Annuity Classifications (3 of 5): Source of income
Types of hazards
Concealment
1035 Exchange
32. Physical - slippery floor; Moral - dishonest acts; Morale - carelessness or recklessness.
Types of hazards
Exclusions for Major Medical plan
Employee Retirement Income Security Act (ERISA)
Total disability (more restrictive definition)
33. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.
Levels of Long Term Care provided
Law of Large Numbers
Indemnify
Trial Application (aka Request for Offer)
34. Dependent children are covered until 19 or 23 (full-time student only) or until self-sufficient (if handicapped).
Medicaid/Medi-Cal
Dependent coverage
Major Medical plan
Health Reimbursement Account (HRA)
35. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).
Annuity Classifications (1 of 5): How premium is paid
Loss of Earnings Test
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Common Life Exclusions
36. Unintentional - up to $1 -000 + legal $; Intentional - $1 -000-5 -000 + legal $; If harmful - misdemeanor + up to 1 yr. prison + up to $10 -000.
Penalties for violating AIDS/HIV privacy laws
Types of reinsurance
Cost of Living Adjustment (COLA) Disability rider
Underwriting risk categories
37. A&H - A&S - Sickness only; Medical; Disability; Accident only; Travel accident; LTC; Medicare supplement; AD&D; Dental/Vision/Prescription; Limited.
Types of Accident & Health insurance
Tax implications of Disability policy
Types of Accident & Health (A&H) providers
Risk management
38. Temp. coverage for set duration w/ death benefit ONLY (no cash value) - offers largest $ for lowest premium; renewable; convertible.
Term Life policy
Health Reimbursement Account (HRA)
Errors & Omissions (E&O)
Insurance contract characteristics (2 of 2)
39. An unintentional mistake committed by an insurance representative; may be covered by E&O insurance.
Errors & Omissions (E&O)
Permanent vs. Temporary disability
Non-forfeiture options for WL policy
Convertibility provision
40. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.
Employer-Administered plan
Dental Plan
Single Pay Whole Life policy
Doctrine of Comity
41. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.
Payment of Premium provision
Dependent coverage
Levels of Long Term Care provided
Medicare
42. Available for any reason up to full cash value @ fixed (max 8%) OR variable interest rate; loan $ + interest deducted from benefit @ death.
Loss of Earnings Test
Joint Life (aka "First to die") policy
Accidental Death (aka Multiple Indemnity) rider
Policy loans
43. Same as WL but can be "paid-up" early by paying larger premium for shorter payment period (i.e. 10 Pay Life - 20 Pay Life).
Policy delivery
Tax implications of medical plans
Limited Pay Whole Life policy
Convertibility provision
44. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Peril vs. Hazard
1035 Exchange
Group Disability plan
Notice of Claim provision
45. 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
Non-Occupational Disability policy
Phases of an annuity
Small Employer Medical Expense plan
46. Peril is the CAUSE of loss. Hazard is a condition that increases LIKELIHOOD of loss.
Phases of an annuity
Entire Contract provision
Whole (aka Permanent or Straight) Life policy
Peril vs. Hazard
47. Private sector (Commercial) - provides LA&H - P&C - & LTC; Public sector (Gov't) - provides flood - work. comp. - Medicare/Medicaid - Group Life (SGLI/FEGLI).
Preferred Provider Organization (PPO)
Concealment exceptions
Types of Insurers (by sector)
Phases of an annuity
48. Federal program financed by payroll taxes provided equally by both employer & employee OR entirely by individual (if self-employed). Provides benefits for: Medicare @ age 65+; retirement; $255 lump sum death benefit; (limited) disability; survivors;
Preferred Provider Organization (PPO)
Settlement options for Life policy (2 of 2)
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Peril vs. Hazard
49. 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.
Medicare
Penalties for violating AIDS/HIV privacy laws
Valid life insurance contracts must identify...
Occupational Disability policy
50. Waives premium upon disability of Insured until return to work; disability must persist for 6 mths. or longer. Cash value & dividends not affected.
Insuring clause/provision (aka Insuring Agreement)
Waiver of Premium (Waiver of Cost of Insurance) rider
Family Maintenance policy
Misstatement of Age/Sex provision