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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. 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.
Tax implications of Disability policy
Supplemental Major Medical plan
Non-forfeiture options for WL policy
Trusts
2. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.
Errors & Omissions (E&O)
Dividends
Single Pay Whole Life policy
Beneficiary provisions
3. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.
Workers' Compensation insurance
Non-Occupational Disability policy
Indemnify
Split Dollar Plan
4. Same as WL but cash value increases @ current interest rates (not set); premium can start low or high & may change.
Premium modes
Current Assumption (aka Interest-Sensitive) Whole Life policy
Business Continuation (aka Buy-Sell) Disability policy
Underwriting risk categories
5. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.
Annuity surrender charges
Social Security Benefit (Supplement) rider
Endowment Life policy
Misstatement of Age/Sex provision
6. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Medicare Part C (aka Medicare Advantage)
Key Employee policy
Accidental Death (aka Multiple Indemnity) rider
Insurer (as defined by CIC)
7. Provides supplemental coverage for physician/surgeon fees if enrolled (during enrollment period ONLY) & pay monthly premium w/ deductible and co-insurance.
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Key Employee policy
Key Employee Disability policy
Reinsurance
8. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.
Split Dollar Plan
Civil Rights/Pregnancy Discrimination Act
Notice of Claim provision
Elimination (aka Waiting) period
9. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.
Types of Renewability provisions
Viatical Settlement Provider (VSP)
Major Medical plan
Accidental Death (aka Multiple Indemnity) rider
10. Waives premium upon disability of Insured until return to work; disability must persist for 90 days or longer; 1st 90 day premiums refunded after 90 days.
CA Work. Comp. Statutes
Waiver of Premium provision
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Return of Premium rider
11. Covers entire family w/ WL for breadwinner & (convertible) Level Term for spouse & children (until certain age).
Disability Income policy
Palliative vs. Curative care
Family policy
Total disability (more restrictive definition)
12. Process which prevents claim denial as a result of false statement or promise (made by Insurer) - which was relied upon by Insured.
Policy loans
Cost of Living Adjustment (COLA) Life rider
Estoppel
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
13. Must be delivered in person or by certified - registered or 1st-class mail w/ signature - unless waived by Insurance Commissioner.
Palliative vs. Curative care
Family or Dependents rider
Policy delivery
Small Employer Medical Expense plan
14. Provides coverage for specific disease(s) - such as cancer or leukemia.
Modified Endowment Contract (MEC)
Dread Disease policy
Valid life insurance contracts must identify...
Return of Premium rider
15. Permanent - not recoverable (spinal cord injury); Temporary - recoverable (temp. illness/injury - broken limb).
Dividends
Permanent vs. Temporary disability
Recurrent disability clause/provision
Single Pay Whole Life policy
16. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.
Insurable interest
Insurer (as defined by CIC)
Key Employee policy
Parole Pardon Rule
17. Waives premium on Life policy for minor child until age 21 in event premium payor dies or becomes disabled.
18. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).
1035 Exchange
Types of reinsurance
Insurance contract characteristics (2 of 2)
Accidental Death & Dismemberment (AD&D) Life policy
19. Intentional OR unintentional failure to disclose material underwriting facts that should have been disclosed; grounds for policy rescission.
Concealment
Types of Term Life policies
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Trusts
20. Fraternal - non-profit - members only; Reciprocal - unincorp'd org. - members insure each other; Lloyd's Assoc. - groups sharing risks; Surplus lines - special market risks.
Time Limit on Certain Defenses provision
Permanent vs. Temporary disability
Types of Insurers (miscellaneous)
Family policy
21. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.
Mortality vs. Morbidity tables
Primary Insurance Amount (PIA)
Concealment exceptions
Departments of an Insurer
22. 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
Presumptive disability
Exclusions to Work. Comp.
Concealment exceptions
Medicare
23. Period of time following any children's survivor benefit & before benefits are provided to employee's widow/widower.
Change of Occupation provision
Blackout Period
Adjustable Whole Life policy
Penalties for violating AIDS/HIV privacy laws
24. Dividends are NOT taxable but interest is. Loan interest is NOT tax-deductible. Interest paid by Insurer on retained funds is taxable.
Flexible Spending Account (FSA)
Penalties for violating AIDS/HIV privacy laws
Tax implications of Dividends - Loans & Interest
Fraud
25. Benefits automatically increase annually based on inflationary index (i.e. Consumer Price Index) OR flat rate (5% max.).
Supplemental Major Medical plan
Long Term Care (LTC) policy
Cost of Living Adjustment (COLA) Disability rider
Consolidated Omnibus Budget Reconciliation Act (COBRA)
26. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.
Transplant/Cosmetic Surgery rider
Proof of Loss provision
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Policy delivery
27. Same as Universal Life but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Annuity
CA Work. Comp. Statutes
Variable Universal Life policy
Waiver of Premium (Waiver of Cost of Insurance) rider
28. 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).
Limited Pay Whole Life policy
Spendthrift provision
Time Limit on Certain Defenses provision
Waiver of Premium (Waiver of Cost of Insurance) rider
29. Provides disability income during surgery recovery from life-threatening condition (& sometimes cosmetic surgery).
Conformity with State Statute provision
Guaranteed Insurability Life rider
Term Life policy
Transplant/Cosmetic Surgery rider
30. Private sector (Commercial) - provides LA&H - P&C - & LTC; Public sector (Gov't) - provides flood - work. comp. - Medicare/Medicaid - Group Life (SGLI/FEGLI).
Dependent coverage
Types of Insurers (by sector)
Types of reinsurance
Comprehensive Major Medical plan
31. Allows for use of HMO/PPO or other private carrier to provide expanded benefits @ additional premium & if enrolled in BOTH Parts A & B.
Medicare Part C (aka Medicare Advantage)
Viatical Settlement Provider (VSP)
Renewability provision
Joint Life (aka "First to die") policy
32. 'The inability to perform ANY reasonable occupation based on education - training or experience'.
Total disability (more restrictive definition)
Business Continuation (aka Buy-Sell) Disability policy
Doctrine of Comity
Medicare Supplement or Medigap policy
33. Federal law which prohibits companies w/ 15+ employees from decreasing coverage benefits for women affected by pregnancy or childbirth.
Key Employee Disability policy
Medicare Part C (aka Medicare Advantage)
Civil Rights/Pregnancy Discrimination Act
CA Work. Comp. Statutes
34. Allows Term policy conversion to Permanent policy w/out medical exam; must be identical or lower death benefit; based on either attained OR original age.
Convertibility provision
Common Disability Exclusions
Automatic Premium Loan (APL) provision
Insurance contract characteristics (1 of 2)
35. Provides % of monthly income benefit if Insured becomes disabled due to illness or accident.
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Settlement options for Life policy (2 of 2)
Disability Income policy
Viatical Settlement Provider (VSP)
36. Allows for Term policy renewal @ higher premium w/out medical exam; guarantees insurability; based on actual/attained age.
Renewability provision
Legal Action provision
Plans A-L of Medical Supplement or Medigap
Non-forfeiture options for WL policy
37. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.
Types of Renewability provisions
Grace Period provision
Impairment (Exclusion) rider
Tax implications of an Annuity (1 of 2)
38. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Grace Period provision
Family Income policy
39. 'The inability to perform ANY gainful occupation'.
Accidental Death (aka Multiple Indemnity) rider
Insurance contract characteristics (2 of 2)
Total disability (any-occupational definition)
Insurance contract characteristics (1 of 2)
40. Info already known; Info that should have been known; Waived info; Irrelevant info.
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Types of Licensed Producers
Cross Purchase Plan
Concealment exceptions
41. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.
Tax implications of medical plans
Common Accident provision
Claim Form (aka Proof of Loss Form) provision
Major Medical plan
42. Upon death - death benefit is paid + the aggregate of cash value accumulated to date; add-on to WL policy ONLY.
Binding receipt (aka Temporary Insurance Agreement)
Return of Cash Value rider
Types of reinsurance
COBRA Time Limitations
43. Prepaid med. benefits for members w/ approved primary care M.D. (independent); low co-pay; non-PPO M.D. can be used at higher cost.
Annuity Classifications (5 of 5): # of lives
Exclusions to Work. Comp.
Preferred Provider Organization (PPO)
Insuring clause/provision (aka Insuring Agreement)
44. Domestic - within home state; Foreign - outside home state; Alien - outside home country.
Beneficiary provisions
Types of Insurers (by domicile)
Annuity Classifications (5 of 5): # of lives
Tax implications of an Annuity (1 of 2)
45. Although death benefit is tax-free - it is included in gross estate value so federal &/or state taxes may apply to a portion in excess of fixed federal limit.
Permanent vs. Temporary disability
Age Discrimination in Employment Act (ADEA)
Tax implications of an Estate
Total disability (any-occupational definition)
46. Part A - Inpatient hospital deductibles vary on # of days; limited reserve days; finite benefit; 1st 3 pints blood; Part B - 20% co-payment.
Trusts
Medicare Part A & B "Gaps"
Survivorship (aka "Last to die") policy
Dependent coverage
47. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.
Mortality vs. Morbidity tables
Common Accident provision
Trusts
Tax implications of Disability policy
48. Prepaid med. benefits for "subscribers" @ approved facilities; many non-profit; Blue Cross - Hospital stays; Blue Shield - M.D. costs.
Health Reimbursement Account (HRA)
Blue Cross/Blue Shield
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Non-forfeiture options for WL policy
49. No deductible coverage for: daily room/board; ancillary costs; surgeon &/or physician expense (for added premium).
Annuity
Basic Medical plan
Cost of Living Adjustment (COLA) Life rider
Civil Rights/Pregnancy Discrimination Act
50. Facultative - case by case agreements; Automatic/Treaty - automatic acceptance of risk percentage per previous agreement.
Return of Premium rider
Return of Premium rider
Palliative vs. Curative care
Types of reinsurance