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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. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).
Beneficiary provisions
Return of Premium rider
1035 Exchange
Common Disaster (Simultaneous Death Act) clause/provision
2. 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.
Health Insurance Portability and Accountability Act (HIPAA)
Types of Insurers (by sector)
Types of Insurers (by ownership)
Presumptive disability
3. 1: Tax-free lump sum; 2: Monthly pay-outs for fixed time; 3: Fixed monthly payments until depleted.
Risk management
Palliative vs. Curative care
Settlement options for Life policy (1 of 2)
Rate (as defined by CIC)
4. 'The inability to perform ANY gainful occupation'.
Total disability (any-occupational definition)
Civil Rights/Pregnancy Discrimination Act
Mortality vs. Morbidity tables
Return of Premium rider
5. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.
Cash value
Human Life Value approach
Employer-Administered plan
Annuity Classifications (2 of 5): When benefits begin
6. 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.
Blackout Period
COBRA Time Limitations
Major Medical plan
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
7. Part A - Inpatient hospital deductibles vary on # of days; limited reserve days; finite benefit; 1st 3 pints blood; Part B - 20% co-payment.
Medicare Part A & B "Gaps"
Family or Dependents rider
Penalties for violating AIDS/HIV privacy laws
Enhanced Ordinary (aka Extraordinary) Whole Life policy
8. Prepaid med. benefits for members ONLY w/ approved primary care M.D. (HMO employee); focus on preventative care; low co-pay.
Recurrent disability clause/provision
Total disability (more restrictive definition)
Automatic Premium Loan (APL) provision
Health Maintenance Organization (HMO)
9. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.
Common Accident provision
Medi-Cal Share Cost plan
Insuring clause/provision (aka Insuring Agreement)
Juvenile Life (aka Jumping Juvenile) policy
10. Coverage for catastrophic loss w/ high limits - front end deductible; co-insurance (80/20%); blanket coverage; stop loss max.
Major Medical plan
Estoppel
Civil Rights/Pregnancy Discrimination Act
Modified Premium Whole Life policy
11. An unintentional mistake committed by an insurance representative; may be covered by E&O insurance.
Common Accident provision
Errors & Omissions (E&O)
Health Maintenance Organization (HMO)
Tax implications of Death Benefit & Cash Value
12. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.
Incontestability clause/provision
Comprehensive Major Medical plan
Common Disaster (Simultaneous Death Act) clause/provision
Types of Licensed Producers
13. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).
Cost of Living Adjustment (COLA) Life rider
Health Maintenance Organization (HMO)
Variable Life policy (2 of 2)
Presumptive disability
14. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.
Key Employee policy
Flexible Spending Account (FSA)
Primary Insurance Amount (PIA)
Social Security Benefit (Supplement) rider
15. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.
Errors & Omissions (E&O)
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Revocable vs. Irrevocable beneficiary
Penalties for violating AIDS/HIV privacy laws
16. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.
Tax implications of Disability policy
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Palliative vs. Curative care
Phases of an annuity
17. 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.
Elimination (aka Waiting) period
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Equity Indexed annuity
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
18. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.
Time Limit on Certain Defenses provision
Modified Endowment Contract (MEC)
Age Discrimination in Employment Act (ADEA)
Medicare Part A & B "Gaps"
19. 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.
Annuity surrender charges
Long Term Care (LTC) policy
Group Disability plan
Indeterminate Premium Whole Life policy
20. Upon death - death benefit is paid + the aggregate of premiums paid to date; add-on to Term policy ONLY.
Common Disability Exclusions
Return of Premium rider
Modified Endowment Contract (MEC)
Total disability (as commonly defined)
21. 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.
Family policy
Insuring clause/provision (aka Insuring Agreement)
Types of Insurers (miscellaneous)
Valid life insurance contracts must identify...
22. Same as WL but premium low for 1st 5 yrs. - THEN has annual premium increases for set # yrs. - THEN level premium.
Spendthrift provision
Dependent coverage
Graded Premium Whole Life policy
Current Assumption (aka Interest-Sensitive) Whole Life policy
23. Covers disabilities occurring ONLY "off" job; benefits do not overlap work. comp. (i.e. Group plan).
Medicare Part C (aka Medicare Advantage)
Law of Large Numbers
Non-Occupational Disability policy
Split Dollar Plan
24. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.
Levels of Long Term Care provided
Blue Cross/Blue Shield
Annuity
Health Maintenance Organization (HMO)
25. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Types of Insurers (by ownership)
Presumptive disability
Cost of Living Adjustment (COLA) Disability rider
26. Policy owner must notify Insurer of loss either in writing - in person or by phone w/in 20 days.
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Accidental Death (aka Multiple Indemnity) rider
Insurance contract characteristics (1 of 2)
Notice of Claim provision
27. Beneficiary has right to leave death benefits / Insurer to protect $ from creditors; interest (taxable) paid on retained funds.
Employer Liability
Spendthrift provision
COBRA Time Limitations
Payor (aka Waiver of Payor's Premium) rider
28. Excludes coverage for specific injury/illness either temporarily or permanently in order to eliminate pre-existing condition.
Medicare
Survivorship (aka "Last to die") policy
Types of Renewability provisions
Impairment (Exclusion) rider
29. Reappearance of disability w/in 6 mth. period after "recovery" from same disability is considered recurrence - not new disability.
Small Employer Medical Expense plan
Recurrent disability clause/provision
Health Insurance Portability and Accountability Act (HIPAA)
Misstatement of Age/Sex provision
30. Life license + NASD (FINRA) Series 6 or 7.
Doctrine of Comity
Credit Life policy
Transplant/Cosmetic Surgery rider
Requirements to sell variable life products
31. 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
Settlement options for Life policy (2 of 2)
Variable Life policy (2 of 2)
Insurability Type Conditional receipt
Exclusions to Work. Comp.
32. Identical to Incontestable Clause in Life policy.
IRS Penalties for Annuities
Time Limit on Certain Defenses provision
Incontestability clause/provision
Types of Licensed Producers
33. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.
Modified Premium Whole Life policy
Business Continuation (aka Buy-Sell) policy
Relation of Earnings to Insurance provision
Presumptive disability
34. 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.
Tax implications of an Estate
Credit Life policy
Insurability Type Conditional receipt
Medicare Part D
35. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.
Medi-Cal Share Cost plan
Types of Agency Authority
Penalties for violating AIDS/HIV privacy laws
Types of Accident & Health insurance
36. Req. by CA statute & may provide workers coverage for action-over claims.
Employer Liability
Occupational Disability policy
Market Value Adjusted (aka Modified Guaranteed) annuity
Employee Retirement Income Security Act (ERISA)
37. 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.
Medicare
Business Continuation (aka Buy-Sell) Disability policy
Health Insurance Portability and Accountability Act (HIPAA)
Proof of Loss provision
38. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.
Accidental Death & Dismemberment (AD&D) Disability rider
Credit Life policy
Types of Accident & Health insurance
Premium modes
39. Federal law which prohibits companies w/ 15+ employees from decreasing coverage benefits for women affected by pregnancy or childbirth.
Civil Rights/Pregnancy Discrimination Act
IRS Penalties for Annuities
Blackout Period
Business Overhead Expense (BOE) Disability policy
40. Provides supplemental coverage for physician/surgeon fees if enrolled (during enrollment period ONLY) & pay monthly premium w/ deductible and co-insurance.
Medicare Part D
Tax implications of medical plans
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Tax implications of an Estate
41. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.
Health Maintenance Organization (HMO)
Dental Plan
CHAMPUS (aka TriCare)
Insuring clause/provision (aka Insuring Agreement)
42. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.
Incontestability clause/provision
Common Accident provision
Single Pay Whole Life policy
Consolidated Omnibus Budget Reconciliation Act (COBRA)
43. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.
Disability Income policy
Indemnify
Dental Plan
Levels of Long Term Care provided
44. 'The inability to perform ANY reasonable occupation based on education - training or experience'.
Total disability (more restrictive definition)
Occupational Disability policy
Types of reinsurance
Rehabilitation rider
45. No deductible coverage for: daily room/board; ancillary costs; surgeon &/or physician expense (for added premium).
Age Discrimination in Employment Act (ADEA)
7 Pay Test
Basic Medical plan
Peril vs. Hazard
46. 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.
Basic Medical plan
Tax implications of Disability policy
Errors & Omissions (E&O)
Payor (aka Waiver of Payor's Premium) rider
47. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.
Tax implications of an Annuity (1 of 2)
Insurance contract characteristics (1 of 2)
IRS Penalties for Annuities
Medicare Part A (aka Hospital Insurance or HI)
48. Plan A is the CORE benefit & is least expensive; All other plans include Plan A + additional benefits. Plans F & J are high deductible. K & L are both deductible & co-pay plans.
Medicare Part D
Plans A-L of Medical Supplement or Medigap
7 Pay Test
Annuity Classifications (1 of 5): How premium is paid
49. Federally-funded but state-run program for truly indigent individuals & families providing medical care at Federal clinic.
Family Maintenance policy
Whole (aka Permanent or Straight) Life policy
Return of Cash Value rider
Medicaid/Medi-Cal
50. Same as WL but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Annuity Classifications (1 of 5): How premium is paid
Total disability (any-occupational definition)
Variable Life policy (1 of 2)
Insurable interest