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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. Fixed premium w/ guaranteed min. death benefit that may increase due to higher than expected investment returns.
COBRA Time Limitations
Modified Premium Whole Life policy
Variable Life policy (2 of 2)
Health Reimbursement Account (HRA)
2. Process which prevents claim denial as a result of false statement or promise (made by Insurer) - which was relied upon by Insured.
Estoppel
Claim Form (aka Proof of Loss Form) provision
Relation of Earnings to Insurance provision
Enhanced Ordinary (aka Extraordinary) Whole Life policy
3. 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.
Types of Insurers (by ownership)
Pure risk vs. Speculative risk
Partial disability rider
Valid life insurance contracts must identify...
4. Time extension of benefits based on "qualifying" event. 18 mth. extension if laid off or fired; 36 mth. extension if death - divorce or child leaves home.
Cost of Living Adjustment (COLA) Disability rider
Incontestability clause/provision
COBRA Time Limitations
Estoppel
5. Same as Universal Life but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Risk management
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Tax implications of Dividends - Loans & Interest
Variable Universal Life policy
6. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.
Equity Index Whole Life policy
Insurer (as defined by CIC)
1035 Exchange
CHAMPUS (aka TriCare)
7. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.
Elements to contract
Permanent vs. Temporary disability
Concealment
Underwriting risk categories
8. Temp. coverage for set duration w/ death benefit ONLY (no cash value) - offers largest $ for lowest premium; renewable; convertible.
Employer Liability
Credit Life policy
Blackout Period
Term Life policy
9. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.
7 Pay Test
Total disability (as commonly defined)
Small Employer Medical Expense plan
Single Pay Whole Life policy
10. Receipt whereby coverage incepts ONLY after underwriting approval.
Approval Type Conditional receipt
Payment of Premium provision
Considerations in replacing Health insurance
Phases of an annuity
11. Premiums determined by target cash values or death benefit; partial cash value w/drawals allowed; transparent policy w/ unbundled premium.
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Exclusions for Major Medical plan
Adverse selection
Point of Service plan
12. Federally-funded but state-run program for truly indigent individuals & families providing medical care at Federal clinic.
Errors & Omissions (E&O)
Entire Contract provision
Medicaid/Medi-Cal
Equity Indexed annuity
13. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.
Medicare Supplement or Medigap policy
AIDS/HIV discrimination
Joint Life (aka "First to die") policy
Estoppel
14. Death benefit determined by Insured's financial goals & needs (minus assets).
Notice of Claim provision
Needs approach (most common)
Loss of Earnings Test
Considerations in replacing Health insurance
15. 1: Tax-free lump sum; 2: Monthly pay-outs for fixed time; 3: Fixed monthly payments until depleted.
Recurrent disability clause/provision
Health Reimbursement Account (HRA)
Settlement options for Life policy (1 of 2)
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
16. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).
Tax implications of an Estate
Loss of Earnings Test
Long Term Care (LTC) policy
Insurance contract characteristics (1 of 2)
17. Upon death - death benefit is paid + the aggregate of cash value accumulated to date; add-on to WL policy ONLY.
Beneficiary provisions
Return of Cash Value rider
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Factors that determine premium
18. Pre-existing illness/injury; Waiting period; Elimination period; Probationary period; Benefits - Exclusions - Limitations; Underwriting reqs.
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Premium modes
Considerations in replacing Health insurance
24 Hour Coverage (CA)
19. 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.
Factors that determine premium
Annuity Classifications (3 of 5): Source of income
Legal Action provision
Medicare Part C (aka Medicare Advantage)
20. Mathematical law stating the larger # of occurrences - the more predictable the losses; used to calculate premiums.
Fraud
Annuity surrender charges
Medicare Part D
Law of Large Numbers
21. Compensates business for loss due to disability of key employee; premiums not deductible but benefits tax-free.
Change of Occupation provision
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Elimination (aka Waiting) period
Key Employee Disability policy
22. Life license + NASD (FINRA) Series 6 or 7.
Adjustable Whole Life policy
Conformity with State Statute provision
Requirements to sell variable life products
Variable Life policy (1 of 2)
23. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.
Return of Cash Value rider
Joint Life (aka "First to die") policy
Palliative vs. Curative care
Medical cost containment (aka Managed care)
24. PURELY employer-funded account to reimburse employees for qualified medical expenses not covered by group health plan.
Health Reimbursement Account (HRA)
Errors & Omissions (E&O)
Payor (aka Waiver of Payor's Premium) rider
Single Pay Whole Life policy
25. Beneficiary has right to leave death benefits / Insurer to protect $ from creditors; interest (taxable) paid on retained funds.
Spendthrift provision
Requirements to sell variable life products
Disability Income policy
Legal Action provision
26. Policy provisions must conform to state regulations where policy is sold.
Guaranteed Insurability Life rider
Conformity with State Statute provision
Annuity Classifications (1 of 5): How premium is paid
Business Overhead Expense (BOE) Disability policy
27. Insurance purchased by other Insurer(s) to spread or diversify risk; promotes industry stability.
Parole Pardon Rule
Premium modes
Reinsurance
Viatical Settlement Provider (VSP)
28. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.
Change of Occupation provision
Revocable vs. Irrevocable beneficiary
Preferred Provider Organization (PPO)
Beneficiary provisions
29. Provides professional services - rehabilitation - training/re-training & related costs to assist Insured in returning to work.
Rehabilitation rider
Major Medical plan
Factors that determine premium
Blue Cross/Blue Shield
30. Provides 24 hr. health coverage both "on" & "off" job - but may cause coverage duplication & coordination challenges.
24 Hour Coverage (CA)
Single Pay Whole Life policy
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Medicare Part B (aka Supplemental Medical Insurance or SMI)
31. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.
Social Security Benefit (Supplement) rider
Estoppel
Misstatement of Age/Sex provision
Business Continuation (aka Buy-Sell) policy
32. Federal law which prohibits companies w/ 15+ employees from decreasing coverage benefits for women affected by pregnancy or childbirth.
Fraud
Civil Rights/Pregnancy Discrimination Act
Blackout Period
Market Value Adjusted (aka Modified Guaranteed) annuity
33. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.
Experience vs. Community rating in Group Health plan
Total disability (as commonly defined)
Blackout Period
Adjustable Whole Life policy
34. Fraternal - non-profit - members only; Reciprocal - unincorp'd org. - members insure each other; Lloyd's Assoc. - groups sharing risks; Surplus lines - special market risks.
Family Income policy
Types of Insurers (miscellaneous)
Concealment
Single Pay Whole Life policy
35. Same as Term Life but provides living benefit (endowment) to policy owner if Insured survives entire term.
Medical Savings Account (MSA) & Health Savings Account (HSA)
Endowment Life policy
Recurrent disability clause/provision
Notice of Claim provision
36. Provides for continued operation of business if partner dies - by allowing surviving partner(s) to buy deceased partner's interest in business.
Business Continuation (aka Buy-Sell) Disability policy
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Business Continuation (aka Buy-Sell) policy
Types of Insurers (by sector)
37. Domestic - within home state; Foreign - outside home state; Alien - outside home country.
Types of Insurers (by domicile)
Plans A-L of Medical Supplement or Medigap
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Tax implications of an Annuity (1 of 2)
38. 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
Employer Liability
Suicide clause/provision
Types of Licensed Producers
39. 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.
IRS Penalties for Annuities
Long Term Care (LTC) policy
Cross Purchase Plan
Common Disaster (Simultaneous Death Act) clause/provision
40. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.
Exclusions to Work. Comp.
Adjustable Whole Life policy
Business Continuation (aka Buy-Sell) Disability policy
Accidental Death (aka Multiple Indemnity) rider
41. Req. by CA statute & may provide workers coverage for action-over claims.
Types of Insurers (miscellaneous)
Policy loans
Family policy
Employer Liability
42. 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.
Market Value Adjusted (aka Modified Guaranteed) annuity
Waiver of Premium provision
Adjustable Whole Life policy
Payor (aka Waiver of Payor's Premium) rider
43. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.
Misstatement of Age/Sex provision
Adjustable Whole Life policy
Insuring clause/provision (aka Insuring Agreement)
Blue Cross/Blue Shield
44. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.
Palliative vs. Curative care
Free Look provision
Types of Insurers (miscellaneous)
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
45. No-charge annuity w/drawals allowed up to 10% of total - THEN penalized on sliding scale based on # policy yrs.; conditionally waived.
Dividend options
Types of reinsurance
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Annuity surrender charges
46. Representation - oral or written statement made to best of knowledge or belief; Warranty - statement guaranteed/presumed/understood to be true.
Accidental Death & Dismemberment (AD&D) Disability rider
Applicant Representations vs. Warranties
Medicaid/Medi-Cal
Civil Rights/Pregnancy Discrimination Act
47. Allows Insured to increase death benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age.
Key Employee policy
Guaranteed Insurability Life rider
Tax implications of Death Benefit & Cash Value
Notice of Claim provision
48. Basic Medical; Major Medical; Comprehensive Major Medical
Underwriting risk categories
Types of Medical Plans
Medicare Part C (aka Medicare Advantage)
Partial disability rider
49. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.
Automatic Premium Loan (APL) provision
Modified Endowment Contract (MEC)
Key Employee policy
Term Life policy
50. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.
Single Pay Whole Life policy
Experience vs. Community rating in Group Health plan
Health Insurance Portability and Accountability Act (HIPAA)
Equity Index Whole Life policy