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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. Written policy terms supersede oral statements made prior to policy issue.
Variable Universal Life policy
Parole Pardon Rule
Major Medical plan
Family policy
2. 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.
Cost of Living Adjustment (COLA) Disability rider
Business Overhead Expense (BOE) Disability policy
Types of Licensed Producers
Plans A-L of Medical Supplement or Medigap
3. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.
Payment of Premium provision
Family policy
Common Life Exclusions
Applicant Representations vs. Warranties
4. Refund of 50-80% of premium (minus claims paid) every 5-10 yrs. OR age 65; expensive!
Return of Premium rider
Departments of an Insurer
Binding receipt (aka Temporary Insurance Agreement)
Payor (aka Waiver of Payor's Premium) rider
5. Allows for Term policy renewal @ higher premium w/out medical exam; guarantees insurability; based on actual/attained age.
Adjustable Whole Life policy
Renewability provision
Underwriting risk categories
7 Pay Test
6. If Insured changes to: more hazardous job - benefits reduced; less hazardous job - premiums reduce.
Experience vs. Community rating in Group Health plan
Change of Occupation provision
Annuity Classifications (2 of 5): When benefits begin
Types of Medical Plans
7. 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.
Experience vs. Community rating in Group Health plan
Flexible Spending Account (FSA)
Valid life insurance contracts must identify...
Rate (as defined by CIC)
8. Expands individual WL policy to include Term Life for dependents (spouse - children - etc.).
Policy delivery
Employer-Administered plan
Mortality vs. Morbidity tables
Family or Dependents rider
9. Life license + NASD (FINRA) Series 6 or 7.
Annuity surrender charges
IRS Penalties for Annuities
Split Dollar Plan
Requirements to sell variable life products
10. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.
Modified Premium Whole Life policy
Payor (aka Waiver of Payor's Premium) rider
Medicare
Accidental Death & Dismemberment (AD&D) Life policy
11. 4: Funds retained by Insurer until w/drawn - interest ONLY paid monthly (taxable); 5: Paid-up immediate annuity.
Trial Application (aka Request for Offer)
Settlement options for Life policy (2 of 2)
Insurable interest
Doctrine of Comity
12. Tendency of poorer risks to seek insurance.
Adverse selection
Equity Index Whole Life policy
Pure risk vs. Speculative risk
Non-forfeiture options for WL policy
13. Covers entire family w/ WL for breadwinner & (convertible) Level Term for spouse & children (until certain age).
Types of Accident & Health (A&H) providers
Retrocession
Family policy
Exclusions to Work. Comp.
14. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.
Payor (aka Waiver of Payor's Premium) rider
Payment of Premium provision
Modified Endowment Contract (MEC)
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
15. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.
Claim Form (aka Proof of Loss Form) provision
Annuity
Family policy
Factors that determine premium
16. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.
Levels of Long Term Care provided
Preferred Provider Organization (PPO)
Dental Plan
Beneficiary provisions
17. Permanent - not recoverable (spinal cord injury); Temporary - recoverable (temp. illness/injury - broken limb).
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Permanent vs. Temporary disability
Accidental Death & Dismemberment (AD&D) Disability rider
Insurance contract characteristics (1 of 2)
18. WL policy covering 2 or more Insureds but ONLY payable upon death of LAST Insured - generally low premium but high death benefit.
Elements to contract
Survivorship (aka "Last to die") policy
Family Maintenance policy
Annuity
19. Federal law which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.
Life insurance policy
Tax implications of Death Benefit & Cash Value
Rehabilitation rider
Age Discrimination in Employment Act (ADEA)
20. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.
Medicare Part A & B "Gaps"
AIDS/HIV discrimination
Common Accident provision
Phases of an annuity
21. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.
Policy delivery
Juvenile Life (aka Jumping Juvenile) policy
Insurability Type Conditional receipt
Indemnify
22. An unintentional mistake committed by an insurance representative; may be covered by E&O insurance.
Dental Plan
Errors & Omissions (E&O)
Comprehensive Major Medical plan
Guaranteed Insurability Life rider
23. Provides % of monthly income benefit if Insured becomes disabled due to illness or accident.
Insurance contract characteristics (1 of 2)
Disability Income policy
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Medicare Supplement or Medigap policy
24. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.
Total disability (more restrictive definition)
Payor (aka Waiver of Payor's Premium) rider
Medicare Supplement or Medigap policy
Social Security Benefit (Supplement) rider
25. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.
Common Disability Exclusions
Misstatement of Age/Sex provision
Loss of Earnings Test
Factors that determine premium
26. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.
Departments of an Insurer
Underwriting risk categories
Automatic Premium Loan (APL) provision
Cash value
27. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.
Concealment exceptions
Claim Form (aka Proof of Loss Form) provision
Flexible Spending Account (FSA)
Indemnify
28. Private sector (Commercial) - provides LA&H - P&C - & LTC; Public sector (Gov't) - provides flood - work. comp. - Medicare/Medicaid - Group Life (SGLI/FEGLI).
Credit Life policy
Types of Insurers (by sector)
Needs approach (most common)
Impairment (Exclusion) rider
29. 'The inability to perform ANY reasonable occupation based on education - training or experience'.
Types of Term Life policies
Workers' Compensation insurance
Types of Licensed Producers
Total disability (more restrictive definition)
30. Fixed premium w/ guaranteed min. death benefit that may increase due to higher than expected investment returns.
1035 Exchange
Variable Life policy (2 of 2)
Medi-Cal Share Cost plan
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
31. Basic Medical; Major Medical; Comprehensive Major Medical
Endowment Life policy
Parole Pardon Rule
Types of Medical Plans
Binding receipt (aka Temporary Insurance Agreement)
32. 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.
Experience vs. Community rating in Group Health plan
Mortality vs. Morbidity tables
Common Disability Exclusions
Tax implications of an Estate
33. Coverage for catastrophic loss w/ high limits - front end deductible; co-insurance (80/20%); blanket coverage; stop loss max.
Insuring clause/provision (aka Insuring Agreement)
Rescission
Blue Cross/Blue Shield
Major Medical plan
34. Permanent disability due to total loss of sight - hearing - speech or use of 2 + limbs; benefits paid even while continuing to work.
Presumptive disability
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Reinsurance
Cash value
35. Provides coverage for specific disease(s) - such as cancer or leukemia.
Permanent vs. Temporary disability
Total disability (more restrictive definition)
Dread Disease policy
Common Life Exclusions
36. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.
Experience vs. Community rating in Group Health plan
Palliative vs. Curative care
Survivorship (aka "Last to die") policy
Reinsurance
37. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.
Annuity surrender charges
Adjustable Whole Life policy
Accidental Death & Dismemberment (AD&D) Disability rider
Elimination (aka Waiting) period
38. Req. by CA statute & may provide workers coverage for action-over claims.
Basic Medical plan
Total disability (as commonly defined)
Employer Liability
Notice of Claim provision
39. 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.
Settlement options for Life policy (2 of 2)
Annuity Classifications (1 of 5): How premium is paid
Convertibility provision
Medicaid/Medi-Cal
40. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.
Levels of Long Term Care provided
Tax implications of Dividends - Loans & Interest
Exclusions to Work. Comp.
Payor (aka Waiver of Payor's Premium) rider
41. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.
Flexible Spending Account (FSA)
Limited Pay Whole Life policy
Key Employee Disability policy
Elimination (aka Waiting) period
42. Provides benefit during Social Security "black-out" period - up to 1 yr.
Tax implications of an Annuity (1 of 2)
Health Maintenance Organization (HMO)
Social Security Benefit (Supplement) rider
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
43. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.
Annuity
Accidental Death (aka Multiple Indemnity) rider
Retrocession
Annuity Classifications (3 of 5): Source of income
44. 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)
Flexible Spending Account (FSA)
Small Employer Medical Expense plan
Insurable interest
45. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.
Types of Insurers (by sector)
Free Look provision
Split Dollar Plan
Viatical Settlement Provider (VSP)
46. Federal law allows employees/their dependents to continue group benefits w/in 60 days after termination (if employer has 20+ employees); Insured pays premium @ 102% of group cost.
Valid life insurance contracts must identify...
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Pure risk vs. Speculative risk
Tax implications of medical plans
47. 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.
Time Limit on Certain Defenses provision
Medicare Part A (aka Hospital Insurance or HI)
Accidental Death (aka Multiple Indemnity) rider
Waiver of Premium provision
48. Covers disabilities occurring both "on" AND "off" job; "on" job benefits paid in addition to work. comp. - if applicable (i.e. individual plan).
Medicare Part C (aka Medicare Advantage)
Cost of Living Adjustment (COLA) Life rider
Occupational Disability policy
Dividend options
49. Excludes coverage for suicide during 1st 2 yrs. ONLY but - if it does - all premiums must be returned to beneficiary.
Elimination (aka Waiting) period
Partial disability rider
Suicide clause/provision
Doctrine of Comity
50. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.
Suicide clause/provision
Survivorship (aka "Last to die") policy
Experience vs. Community rating in Group Health plan
7 Pay Test