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Test your basic knowledge |
CA Life Agent Exam
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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. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.
Automatic Premium Loan (APL) provision
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
7 Pay Test
Human Life Value approach
2. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.
Proof of Loss provision
Plans A-L of Medical Supplement or Medigap
Family or Dependents rider
Cross Purchase Plan
3. Covers disabilities occurring ONLY "off" job; benefits do not overlap work. comp. (i.e. Group plan).
Permanent vs. Temporary disability
Estoppel
Waiver of Premium provision
Non-Occupational Disability policy
4. Treating or mitigating loss exposures through 1: avoidance; 2: retention (deductibles); 3: sharing; 4: reduction; or 5: transfer.
Annuity Classifications (5 of 5): # of lives
Policy delivery
Parole Pardon Rule
Risk management
5. No-charge annuity w/drawals allowed up to 10% of total - THEN penalized on sliding scale based on # policy yrs.; conditionally waived.
Reinstatement provision
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Annuity surrender charges
Conformity with State Statute provision
6. Tendency of poorer risks to seek insurance.
Errors & Omissions (E&O)
Business Continuation (aka Buy-Sell) policy
Risk management
Adverse selection
7. The state in which the contract is accepted or delivered is the state that possesses regulatory jurisdiction over Group plan.
Notice of Claim provision
Convertibility provision
Doctrine of Comity
Consolidated Omnibus Budget Reconciliation Act (COBRA)
8. 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
Term Life policy
24 Hour Coverage (CA)
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
9. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).
Health Reimbursement Account (HRA)
Dependent coverage
Family policy
Insurable interest
10. Insurance purchased by other Insurer(s) to spread or diversify risk; promotes industry stability.
Total disability (more restrictive definition)
Suicide clause/provision
Reinsurance
Dental Plan
11. Primary - if 2 or more - equally shared; Contingent (Secondary) - only if primary dead; Tertiary - only if both primary & secondary dead. If none listed - goes to estate.
Variable Life policy (1 of 2)
Tax implications of medical plans
Business Continuation (aka Buy-Sell) policy
Beneficiary provisions
12. Agents - represent Insurer; Brokers - represent themselves & Insured; Solicitors - represent one agent to solicit leads.
Policy delivery
Types of Licensed Producers
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Dividend options
13. 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
Exclusions to Work. Comp.
Elements to contract
Insurable interest
Policy loans
14. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.
Legal Action provision
Cash value
Recurrent disability clause/provision
Flexible Spending Account (FSA)
15. Temp. coverage for set duration w/ death benefit ONLY (no cash value) - offers largest $ for lowest premium; renewable; convertible.
Notice of Claim provision
Term Life policy
Business Overhead Expense (BOE) Disability policy
Dread Disease policy
16. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.
Settlement options for Life policy (1 of 2)
Policy delivery
Adjustable Whole Life policy
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
17. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.
Needs approach (most common)
Types of Medical Plans
Approval Type Conditional receipt
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
18. 'The inability to perform ANY gainful occupation'.
Total disability (any-occupational definition)
Penalties for violating AIDS/HIV privacy laws
Blue Cross/Blue Shield
Payor (aka Waiver of Payor's Premium) rider
19. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.
Cash value
Dividends
Renewability provision
Legal Action provision
20. Allows Insured to increase death benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age.
Guaranteed Insurability Life rider
Reinstatement provision
Health Insurance Portability and Accountability Act (HIPAA)
7 Pay Test
21. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.
Cost of Living Adjustment (COLA) Disability rider
Annuity Classifications (2 of 5): When benefits begin
Payment of Premium provision
Concealment exceptions
22. Excludes coverage for specific injury/illness either temporarily or permanently in order to eliminate pre-existing condition.
Tax implications of Death Benefit & Cash Value
Impairment (Exclusion) rider
Health Maintenance Organization (HMO)
Insurance contract characteristics (1 of 2)
23. Permanent - not recoverable (spinal cord injury); Temporary - recoverable (temp. illness/injury - broken limb).
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Cash value
Permanent vs. Temporary disability
Return of Premium rider
24. Federal law to protect Federal employees' (& their beneficiaries') pension - group insurance - & welfare benefits.
Cost of Living Adjustment (COLA) Disability rider
Employee Retirement Income Security Act (ERISA)
Common Accident provision
Adverse selection
25. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Insurance contract characteristics (1 of 2)
Pure risk vs. Speculative risk
Key Employee Disability policy
Accidental Death & Dismemberment (AD&D) Disability rider
26. Potential circumstance that could cause a loss; measured in dollars.
Loss exposure
Insurer (as defined by CIC)
Types of Insurers (by sector)
Types of Insurers (miscellaneous)
27. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Indeterminate Premium Whole Life policy
Medical cost containment (aka Managed care)
Comprehensive Major Medical plan
Key Employee policy
28. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.
Life insurance policy
Tax implications of an Annuity (1 of 2)
Doctrine of Comity
Departments of an Insurer
29. Federally-funded but state-run program for truly indigent individuals & families providing medical care at Federal clinic.
AIDS/HIV discrimination
Relation of Earnings to Insurance provision
Mortality vs. Morbidity tables
Medicaid/Medi-Cal
30. Policy provisions must conform to state regulations where policy is sold.
Major Medical plan
Notice of Claim provision
Employer-Administered plan
Conformity with State Statute provision
31. 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.
Medicare Part C (aka Medicare Advantage)
Earned vs. Unearned premium
CA Work. Comp. Statutes
Spendthrift provision
32. Compensates business for loss due to disability of key employee; premiums not deductible but benefits tax-free.
Preferred Provider Organization (PPO)
Life insurance policy
Key Employee Disability policy
Incontestability clause/provision
33. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.
Revocable vs. Irrevocable beneficiary
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Adverse selection
Single Pay Whole Life policy
34. Same as WL but cash value increases @ current interest rates (not set); premium can start low or high & may change.
Human Life Value approach
Current Assumption (aka Interest-Sensitive) Whole Life policy
Adverse selection
Legal Action provision
35. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.
Settlement options for Life policy (2 of 2)
Juvenile Life (aka Jumping Juvenile) policy
Insurer (as defined by CIC)
Market Value Adjusted (aka Modified Guaranteed) annuity
36. Covers disabilities occurring both "on" AND "off" job; "on" job benefits paid in addition to work. comp. - if applicable (i.e. individual plan).
Tax implications of an Annuity (1 of 2)
Insuring clause/provision (aka Insuring Agreement)
Family or Dependents rider
Occupational Disability policy
37. Unilateral - Insurer provides contract; Adhesion - parties must adhere to terms; Aleatory - benefits may not inure equally.
Partial disability rider
Types of Accident & Health (A&H) providers
Free Look provision
Insurance contract characteristics (1 of 2)
38. Federal law which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.
Types of hazards
CA Work. Comp. Statutes
Business Continuation (aka Buy-Sell) Disability policy
Age Discrimination in Employment Act (ADEA)
39. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.
Estoppel
Revocable vs. Irrevocable beneficiary
Misstatement of Age/Sex provision
Guaranteed Insurability Life rider
40. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.
Total disability (more restrictive definition)
Family Maintenance policy
Cross Purchase Plan
Risk management
41. Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling - stock investment).
Grace Period provision
Common Disaster (Simultaneous Death Act) clause/provision
Pure risk vs. Speculative risk
Family or Dependents rider
42. Domestic - within home state; Foreign - outside home state; Alien - outside home country.
Conformity with State Statute provision
Common Accident provision
Types of Renewability provisions
Types of Insurers (by domicile)
43. Earned premium is $ paid for coverage to date. Unearned premium is $ paid & returnable due to coverage not provided.
Annuity Classifications (2 of 5): When benefits begin
Credit Life policy
Concealment
Earned vs. Unearned premium
44. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).
Cost of Living Adjustment (COLA) Life rider
Automatic Premium Loan (APL) provision
Retrocession
Departments of an Insurer
45. 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.
Juvenile Life (aka Jumping Juvenile) policy
Retrocession
Valid life insurance contracts must identify...
Consolidated Omnibus Budget Reconciliation Act (COBRA)
46. Provides disability income during surgery recovery from life-threatening condition (& sometimes cosmetic surgery).
Transplant/Cosmetic Surgery rider
Types of Licensed Producers
Health Reimbursement Account (HRA)
Policy delivery
47. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.
Settlement options for Life policy (1 of 2)
Misstatement of Age/Sex provision
Peril vs. Hazard
Relation of Earnings to Insurance provision
48. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.
Rescission
Workers' Compensation insurance
Equity Indexed annuity
IRS Penalties for Annuities
49. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.
Guaranteed Insurability Life rider
Medical cost containment (aka Managed care)
Tax implications of Dividends - Loans & Interest
Trial Application (aka Request for Offer)
50. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.
Tax implications of an Annuity (1 of 2)
Payment of Premium provision
Dividend options
Health Reimbursement Account (HRA)
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