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: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)






2. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.






3. Provides supplemental coverage for physician/surgeon fees if enrolled (during enrollment period ONLY) & pay monthly premium w/ deductible and co-insurance.






4. Coverage remains in effect for 31 days past premium due date; benefits paid during grace period would be deducted from sum.






5. Permanent disability due to total loss of sight - hearing - speech or use of 2 + limbs; benefits paid even while continuing to work.






6. Provides for continued operation of business if partner dies - by allowing surviving partner(s) to buy deceased partner's interest in business.






7. 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.






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






9. Intentional deception; grounds for rescission.






10. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).






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






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






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






14. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.






15. 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.






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






17. Waives premium on Life policy for minor child until age 21 in event premium payor dies or becomes disabled.

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






19. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).






20. 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.






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






22. Info already known; Info that should have been known; Waived info; Irrelevant info.






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






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






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






26. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.






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






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






29. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.






30. Two death benefit options - Option A: death benefit ONLY; Option B: death benefit + cash value; death benefit NOT guaranteed.






31. PURELY employer-funded account to reimburse employees for qualified medical expenses not covered by group health plan.






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






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






34. The state in which the contract is accepted or delivered is the state that possesses regulatory jurisdiction over Group plan.






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






36. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.






37. Provides disability income during surgery recovery from life-threatening condition (& sometimes cosmetic surgery).






38. Identical to Incontestable Clause in Life policy.






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






40. Receipt whereby coverage incepts conditionally upon submission of full consideration and that all underwriting reqs. are met.






41. 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.






42. Beneficiary has right to leave death benefits / Insurer to protect $ from creditors; interest (taxable) paid on retained funds.






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






44. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.






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






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






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






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






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






50. 1: Straight aka Pure Life - lifetime income but no survivorship refund; 2: Life w/ Period Certain - lifetime income w/ death benefit of monthly annuity for remaining predetermined term. 3: Annuity Certain - monthly income paid for predetermined term