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. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.






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






4. 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.






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






6. Peril is the CAUSE of loss. Hazard is a condition that increases LIKELIHOOD of loss.






7. Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling - stock investment).






8. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.






9. Fixed premium w/ guaranteed min. death benefit that may increase due to higher than expected investment returns.






10. No-charge annuity w/drawals allowed up to 10% of total - THEN penalized on sliding scale based on # policy yrs.; conditionally waived.






11. Provides 24 hr. health coverage both "on" & "off" job - but may cause coverage duplication & coordination challenges.






12. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.






13. Same as WL but premium low for 1st 5 yrs. - THEN has annual premium increases for set # yrs. - THEN level premium.






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






15. If Insured changes to: more hazardous job - benefits reduced; less hazardous job - premiums reduce.






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






17. Basic Medical; Major Medical; Comprehensive Major Medical






18. Price of insurance per exposure unit.






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






20. Agents - represent Insurer; Brokers - represent themselves & Insured; Solicitors - represent one agent to solicit leads.






21. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).






22. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.






23. Upon death - death benefit is paid + the aggregate of premiums paid to date; add-on to Term policy ONLY.






24. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").






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






26. Excludes coverage for specific injury/illness either temporarily or permanently in order to eliminate pre-existing condition.






27. Intentional deception; grounds for rescission.






28. 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.






29. Insured can seek legal action against Insurer for denial of claim only after 60 days and up to 3 yrs. after providing proof of loss.






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






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






32. Prepaid med. benefits for members w/ approved primary care M.D. (independent); low co-pay; non-PPO M.D. can be used at higher cost.






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






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






35. Same as WL but w/ Decreasing Term rider; upon death - pays monthly income for REMAINING term AFTER which pays full death benefit.






36. Conditional - coverage is conditional; Personal - parties are people; Good faith - honesty/integrity; Fiduciary - req's financial trust.






37. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.






38. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.






39. 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.






40. Savings account for medical expenses; Tax-deductible contributions; tax-deferred growth; tax-free for qualified use; taxable for non-qualified use.






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






42. Benefits automatically increase annually based on inflationary index (i.e. Consumer Price Index) OR flat rate (5% max.).






43. No deductible coverage for: daily room/board; ancillary costs; surgeon &/or physician expense (for added premium).






44. Allows for use of HMO/PPO or other private carrier to provide expanded benefits @ additional premium & if enrolled in BOTH Parts A & B.






45. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").






46. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.






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






48. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.






49. Death benefit determined by Insured's projected lost earnings potential.






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