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. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.






2. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.






3. Must be delivered in person or by certified - registered or 1st-class mail w/ signature - unless waived by Insurance Commissioner.






4. Non-qualified Annuity - Non-deductible contributions & tax-deferred growth. At pay-out - tax-free principal but taxable growth.






5. Waives premium upon disability of Insured until return to work; disability must persist for 6 mths. or longer. Cash value & dividends not affected.






6. Price of insurance per exposure unit.






7. Prohibited w/ regard to testing for people of same class; test results must remain confidential; coverage may be declined (once discovered).






8. 1: Tax-free lump sum; 2: Monthly pay-outs for fixed time; 3: Fixed monthly payments until depleted.






9. Covers disabilities occurring both "on" AND "off" job; "on" job benefits paid in addition to work. comp. - if applicable (i.e. individual plan).






10. Req. by CA statute & may provide workers coverage for action-over claims.






11. Provides benefit during Social Security "black-out" period - up to 1 yr.






12. Life license + NASD (FINRA) Series 6 or 7.






13. Agreement - Offer & acceptance; Consideration - application + premium; Legal capacity - licensed &/or competent; Legal purpose - public good.






14. Compensates business for loss due to disability of key employee; premiums not deductible but benefits tax-free.






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






16. Prepaid med. benefits for "subscribers" @ approved facilities; many non-profit; Blue Cross - Hospital stays; Blue Shield - M.D. costs.






17. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.






18. Excludes coverage for suicide during 1st 2 yrs. ONLY but - if it does - all premiums must be returned to beneficiary.






19. 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.






20. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.






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






22. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.






23. Permanent - not recoverable (spinal cord injury); Temporary - recoverable (temp. illness/injury - broken limb).






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






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






26. Policy provisions must conform to state regulations where policy is sold.






27. A company providing lump sum buyout (50-90% of total) of Life policy; becomes owner & beneficiary & assumes premium payments; usually terminally ill viator.






28. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.






29. Federal law which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.






30. 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.






31. Part A - Inpatient hospital deductibles vary on # of days; limited reserve days; finite benefit; 1st 3 pints blood; Part B - 20% co-payment.






32. Group plan initially self-funded by employer (like SIR); after which - group plan Insurer covers (up to policy limit); requires TPA.






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






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






35. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.






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






37. Guaranteed min. interest rate on cash value buildup but possible higher rate if short-term investment returns higher than expected.






38. 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.






39. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.






40. Premiums determined by target cash values or death benefit; partial cash value w/drawals allowed; transparent policy w/ unbundled premium.






41. Level - fixed death benefit - premium fixed until renewal; Decreasing - death benefit decreases over term - premium fixed until renewal; Increasing - death benefit increases over term - premium fixed until renewal.






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






43. Allows Insured to increase death benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age.






44. 'The inability to perform your OWN normal occupation or daily duties'.






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.






46. Receipt whereby coverage incepts immediately upon submission of full consideration - unless declined & premium refunded.






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






48. Representation - oral or written statement made to best of knowledge or belief; Warranty - statement guaranteed/presumed/understood to be true.






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






50. Qualified Annuity - Tax-deductible contributions & tax-deferred growth but fully taxable w/drawals.