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. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.






2. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.






3. War; elective cosmetic surgery; routine dental; work. comp.-covered claims; self-inflicted (intentional); gov't. facility treatment; LTC; private nursing.






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






5. 'The inability to perform ANY reasonable occupation based on education - training or experience'.






6. Price of insurance per exposure unit.






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






8. Responsible adult trustee designated to manage death benefits for minor child beneficiary until adulthood.






9. Unilateral - Insurer provides contract; Adhesion - parties must adhere to terms; Aleatory - benefits may not inure equally.






10. Available for any reason up to full cash value @ fixed (max 8%) OR variable interest rate; loan $ + interest deducted from benefit @ death.






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






12. Provides professional services - rehabilitation - training/re-training & related costs to assist Insured in returning to work.






13. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.






14. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).






15. 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.






16. Death benefit is NOT taxable. Cash value grows tax-deferred but cost basis (base premium) is not taxable - only interest is.






17. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.






18. Funding mechanism whereby employer & employee share cost of premium. Upon death - benefit is shared between employer & beneficiary.






19. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.






20. 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.






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






22. An attempt to contain costs by employing various strategies - including wellness programs - preventative testing - outpatient & alternative procedures.






23. A lapsed policy may be reinstated if not longer than 3-5 yrs. - & proof of insurability re-established - & back premiums + interest paid.






24. Expands individual WL policy to include Term Life for dependents (spouse - children - etc.).






25. 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.






26. Unintentional - up to $1 -000 + legal $; Intentional - $1 -000-5 -000 + legal $; If harmful - misdemeanor + up to 1 yr. prison + up to $10 -000.






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






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






29. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.






30. Federally-funded but state-run program for truly indigent individuals & families providing medical care at Federal clinic.






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






32. Written policy terms supersede oral statements made prior to policy issue.






33. Dividends are NOT taxable but interest is. Loan interest is NOT tax-deductible. Interest paid by Insurer on retained funds is taxable.






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






35. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).






36. Temp. coverage for set duration w/ death benefit ONLY (no cash value) - offers largest $ for lowest premium; renewable; convertible.






37. Policy owner must notify Insurer of loss either in writing - in person or by phone w/in 20 days.






38. Same as Term Life but provides living benefit (endowment) to policy owner if Insured survives entire term.






39. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.






40. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.






41. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.






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






43. 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.






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






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






46. Same as WL but w/ Level Term rider; upon death - pays monthly income for FULL term AFTER which pays full death benefit.






47. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.






48. 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.






49. 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;






50. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).