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. 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.






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






3. 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






4. Mortality is the statistical possibility of death @ each age. Morbidity is the statistical possibility & extent of disability @ each age.






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






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






7. Conditional - coverage is conditional; Personal - parties are people; Good faith - honesty/integrity; Fiduciary - req's financial trust.






8. Reappearance of disability w/in 6 mth. period after "recovery" from same disability is considered recurrence - not new disability.






9. Responsible adult trustee designated to manage death benefits for minor child beneficiary until adulthood.






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






11. Provides coverage for specific disease(s) - such as cancer or leukemia.






12. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.






13. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.






14. Monthly; Quarterly; Semi-annually; Annually (cheapest due to less admin cost).






15. Refund of 50-80% of premium (minus claims paid) every 5-10 yrs. OR age 65; expensive!






16. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.






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






18. Federal law which allows health coverage portability when changing jobs - so long as previous coverage was in effect 63+ days; allows some tax deductibility for LTC.






19. 'The inability to perform ANY reasonable occupation based on education - training or experience'.






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.






21. Temp. coverage for set duration w/ death benefit ONLY (no cash value) - offers largest $ for lowest premium; renewable; convertible.






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






23. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.






24. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.






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






26. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.






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






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






29. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.






30. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.






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






32. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.






33. 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.






34. Allows for use of HMO/PPO or other private carrier to provide expanded benefits @ additional premium & if enrolled in BOTH Parts A & B.






35. Treating or mitigating loss exposures through 1: avoidance; 2: retention (deductibles); 3: sharing; 4: reduction; or 5: transfer.






36. No deductible coverage for: daily room/board; ancillary costs; surgeon &/or physician expense (for added premium).






37. Peril is the CAUSE of loss. Hazard is a condition that increases LIKELIHOOD of loss.






38. Same as WL but cash value increases @ current interest rates (not set); premium can start low or high & may change.






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






40. Unintentional - up to $1 -000 + legal $; Intentional - $1 -000-5 -000 + legal $; If harmful - misdemeanor + up to 1 yr. prison + up to $10 -000.






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






42. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.






43. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.






44. Insurance purchased by other Insurer(s) to spread or diversify risk; promotes industry stability.






45. 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.






46. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).






47. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.






48. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.






49. Dependent children are covered until 19 or 23 (full-time student only) or until self-sufficient (if handicapped).






50. Receipt whereby coverage incepts conditionally upon submission of full consideration and that all underwriting reqs. are met.