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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. Provides supplemental coverage for physician/surgeon fees if enrolled (during enrollment period ONLY) & pay monthly premium w/ deductible and co-insurance.
Variable Universal Life policy
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Peril vs. Hazard
Concealment exceptions
2. Employer w/ 25 or less employees must offer all eligible employees @ least 2 medical plan options where pre-existing conditions can't be excluded more than 1 yr.
Small Employer Medical Expense plan
Annuity surrender charges
Medi-Cal Share Cost plan
Variable Universal Life policy
3. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.
Whole (aka Permanent or Straight) Life policy
Life insurance policy
Business Continuation (aka Buy-Sell) Disability policy
Peril vs. Hazard
4. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Variable Universal Life policy
Group Disability plan
Tax implications of Dividends - Loans & Interest
Spendthrift provision
5. 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.
Free Look provision
Presumptive disability
Medicare
Medicaid/Medi-Cal
6. Non-qualified Annuity - Non-deductible contributions & tax-deferred growth. At pay-out - tax-free principal but taxable growth.
Notice of Claim provision
Tax implications of an Annuity (1 of 2)
Waiver of Premium (Waiver of Cost of Insurance) rider
Cross Purchase Plan
7. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.
Palliative vs. Curative care
Insurance contract characteristics (1 of 2)
Rescission
CHAMPUS (aka TriCare)
8. Same as WL but cash value increases @ current interest rates (not set); premium can start low or high & may change.
Considerations in replacing Health insurance
Convertibility provision
Current Assumption (aka Interest-Sensitive) Whole Life policy
Pure risk vs. Speculative risk
9. 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.
Equity Indexed annuity
Insurer (as defined by CIC)
Occupational Disability policy
IRS Penalties for Annuities
10. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.
Types of Agency Authority
Dividends
Dread Disease policy
Retrocession
11. 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;
Group Disability plan
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Types of Accident & Health (A&H) providers
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
12. 4: Funds retained by Insurer until w/drawn - interest ONLY paid monthly (taxable); 5: Paid-up immediate annuity.
Age Discrimination in Employment Act (ADEA)
Survivorship (aka "Last to die") policy
Premium modes
Settlement options for Life policy (2 of 2)
13. Same as WL but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Automatic Premium Loan (APL) provision
Variable Life policy (1 of 2)
Tax implications of Dividends - Loans & Interest
Earned vs. Unearned premium
14. Unintentional - up to $1 -000 + legal $; Intentional - $1 -000-5 -000 + legal $; If harmful - misdemeanor + up to 1 yr. prison + up to $10 -000.
Medicare
Penalties for violating AIDS/HIV privacy laws
Types of Insurers (miscellaneous)
Civil Rights/Pregnancy Discrimination Act
15. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.
Waiver of Premium (Waiver of Cost of Insurance) rider
Elimination (aka Waiting) period
Impairment (Exclusion) rider
Blue Cross/Blue Shield
16. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.
Dental Plan
Dependent coverage
Cash value
Blackout Period
17. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.
AIDS/HIV discrimination
Trial Application (aka Request for Offer)
Health Maintenance Organization (HMO)
Return of Premium rider
18. 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
Misstatement of Age/Sex provision
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Settlement options for Life policy (1 of 2)
Waiver of Premium (Waiver of Cost of Insurance) rider
19. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.
Employee Retirement Income Security Act (ERISA)
Loss of Earnings Test
Joint Life (aka "First to die") policy
Concealment
20. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.
Concealment exceptions
Accidental Death (aka Multiple Indemnity) rider
Endowment Life policy
Small Employer Medical Expense plan
21. Prepaid med. benefits for "subscribers" @ approved facilities; many non-profit; Blue Cross - Hospital stays; Blue Shield - M.D. costs.
Blue Cross/Blue Shield
Incontestability clause/provision
Impairment (Exclusion) rider
Types of Insurers (by authorization)
22. 'The inability to perform ANY gainful occupation'.
Pure risk vs. Speculative risk
Comprehensive Major Medical plan
Occupational Disability policy
Total disability (any-occupational definition)
23. 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.
Medicare Part D
Split Dollar Plan
Social Security Benefit (Supplement) rider
Health Insurance Portability and Accountability Act (HIPAA)
24. Mortality is the statistical possibility of death @ each age. Morbidity is the statistical possibility & extent of disability @ each age.
Types of hazards
Mortality vs. Morbidity tables
Valid life insurance contracts must identify...
Suicide clause/provision
25. Monthly; Quarterly; Semi-annually; Annually (cheapest due to less admin cost).
Premium modes
Annuity surrender charges
Impairment (Exclusion) rider
Family Maintenance policy
26. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.
Revocable vs. Irrevocable beneficiary
Business Overhead Expense (BOE) Disability policy
Equity Index Whole Life policy
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
27. Price of insurance per exposure unit.
Risk management
Rate (as defined by CIC)
Preferred Provider Organization (PPO)
Legal Action provision
28. Info already known; Info that should have been known; Waived info; Irrelevant info.
COBRA Time Limitations
Departments of an Insurer
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Concealment exceptions
29. 1: Tax-free lump sum; 2: Monthly pay-outs for fixed time; 3: Fixed monthly payments until depleted.
Settlement options for Life policy (1 of 2)
Presumptive disability
Tax implications of an Annuity (1 of 2)
Annuity Classifications (1 of 5): How premium is paid
30. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.
Rescission
Tax implications of Death Benefit & Cash Value
Family policy
Single Pay Whole Life policy
31. Basic Medical; Major Medical; Comprehensive Major Medical
Types of Medical Plans
Single Pay Whole Life policy
Waiver of Premium provision
Retrocession
32. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.
Age Discrimination in Employment Act (ADEA)
Adjustable Whole Life policy
Tax implications of an Estate
Flexible Spending Account (FSA)
33. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.
Dependent coverage
Key Employee Disability policy
Factors that determine premium
CA Work. Comp. Statutes
34. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.
Annuity Classifications (5 of 5): # of lives
Insuring clause/provision (aka Insuring Agreement)
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Types of Insurers (by sector)
35. Process which prevents claim denial as a result of false statement or promise (made by Insurer) - which was relied upon by Insured.
Grace Period provision
Estoppel
Total disability (as commonly defined)
Elements to contract
36. Qualified Annuity - Tax-deductible contributions & tax-deferred growth but fully taxable w/drawals.
Settlement options for Life policy (1 of 2)
Impairment (Exclusion) rider
Permanent vs. Temporary disability
Tax implications of an Annuity (1 of 2)
37. Same as WL but w/ adjustable death benefit (& corresponding premium) & over-fund option but w/ annually renewable term (ART).
Spendthrift provision
Notice of Claim provision
Health Insurance Portability and Accountability Act (HIPAA)
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
38. Coverage remains in effect for 31 days past premium due date; benefits paid during grace period would be deducted from sum.
Grace Period provision
Dividend options
Law of Large Numbers
Juvenile Life (aka Jumping Juvenile) policy
39. Period of time following any children's survivor benefit & before benefits are provided to employee's widow/widower.
Variable Universal Life policy
Equity Indexed annuity
Blackout Period
Risk management
40. Earned premium is $ paid for coverage to date. Unearned premium is $ paid & returnable due to coverage not provided.
Earned vs. Unearned premium
Penalties for violating AIDS/HIV privacy laws
Common Disaster (Simultaneous Death Act) clause/provision
Risk management
41. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Accidental Death (aka Multiple Indemnity) rider
Variable Life policy (1 of 2)
Common Life Exclusions
Accidental Death & Dismemberment (AD&D) Disability rider
42. 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
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43. Part A - Inpatient hospital deductibles vary on # of days; limited reserve days; finite benefit; 1st 3 pints blood; Part B - 20% co-payment.
Trial Application (aka Request for Offer)
Free Look provision
Medicare Part A & B "Gaps"
Dividends
44. Policy owner must notify Insurer of loss either in writing - in person or by phone w/in 20 days.
Notice of Claim provision
Annuity Classifications (2 of 5): When benefits begin
Modified Endowment Contract (MEC)
Group Disability plan
45. Benefits NOT taxable; employer-paid premiums deductible to employer; individual plans not deductible unless over 7 1/2% of adjusted gross income - then excess deductible.
Tax implications of medical plans
Incontestability clause/provision
Mortality vs. Morbidity tables
Payor (aka Waiver of Payor's Premium) rider
46. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.
Claim Form (aka Proof of Loss Form) provision
Concealment
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Valid life insurance contracts must identify...
47. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.
Rehabilitation rider
7 Pay Test
Flexible Spending Account (FSA)
Blue Cross/Blue Shield
48. Excludes coverage for suicide during 1st 2 yrs. ONLY but - if it does - all premiums must be returned to beneficiary.
Proof of Loss provision
Applicant Representations vs. Warranties
Suicide clause/provision
Comprehensive Major Medical plan
49. 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.
IRS Penalties for Annuities
CHAMPUS (aka TriCare)
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Preferred Provider Organization (PPO)
50. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.
Underwriting risk categories
Viatical Settlement Provider (VSP)
Limited Pay Whole Life policy
Loss of Earnings Test