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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. Process whereby a reinsurer reinsures w/ another reinsurer.
Retrocession
Medicaid/Medi-Cal
Return of Cash Value rider
Viatical Settlement Provider (VSP)
2. 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.
Tax implications of an Estate
Types of Medical Plans
Adjustable Whole Life policy
Types of Term Life policies
3. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.
Business Overhead Expense (BOE) Disability policy
Beneficiary provisions
Variable Life policy (1 of 2)
Adjustable Whole Life policy
4. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.
Notice of Claim provision
Types of Insurers (by ownership)
Transplant/Cosmetic Surgery rider
Estoppel
5. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.
Blue Cross/Blue Shield
Flexible Spending Account (FSA)
Trial Application (aka Request for Offer)
Long Term Care (LTC) policy
6. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).
Rate (as defined by CIC)
Return of Premium rider
Insurable interest
Types of Renewability provisions
7. War; elective cosmetic surgery; routine dental; work. comp.-covered claims; self-inflicted (intentional); gov't. facility treatment; LTC; private nursing.
Rehabilitation rider
Exclusions for Major Medical plan
Pure risk vs. Speculative risk
Annuity Classifications (5 of 5): # of lives
8. 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.
Small Employer Medical Expense plan
Variable Life policy (1 of 2)
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Major Medical plan
9. Treating or mitigating loss exposures through 1: avoidance; 2: retention (deductibles); 3: sharing; 4: reduction; or 5: transfer.
Types of Insurers (miscellaneous)
Insurance contract characteristics (2 of 2)
Medi-Cal Share Cost plan
Risk management
10. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.
Grace Period provision
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Insurability Type Conditional receipt
Payment of Premium provision
11. Must be delivered in person or by certified - registered or 1st-class mail w/ signature - unless waived by Insurance Commissioner.
Guaranteed Insurability Life rider
Policy delivery
Factors that determine premium
Insurability Type Conditional receipt
12. Same as WL but w/ Level Term rider; upon death - pays monthly income for FULL term AFTER which pays full death benefit.
Medical cost containment (aka Managed care)
Whole (aka Permanent or Straight) Life policy
Split Dollar Plan
Family Maintenance policy
13. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.
Types of Term Life policies
Mortality vs. Morbidity tables
Valid life insurance contracts must identify...
Claim Form (aka Proof of Loss Form) provision
14. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.
Medi-Cal Share Cost plan
Total disability (any-occupational definition)
Free Look provision
Primary Insurance Amount (PIA)
15. Death benefit determined by Insured's financial goals & needs (minus assets).
Non-forfeiture options for WL policy
Medicare Supplement or Medigap policy
Juvenile Life (aka Jumping Juvenile) policy
Needs approach (most common)
16. Same as WL but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Variable Life policy (1 of 2)
Beneficiary provisions
Free Look provision
Exclusions for Major Medical plan
17. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.
Health Reimbursement Account (HRA)
Dental Plan
Family Income policy
Pure risk vs. Speculative risk
18. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.
Modified Endowment Contract (MEC)
Tax implications of an Annuity (1 of 2)
Annuity
Relation of Earnings to Insurance provision
19. Agents - represent Insurer; Brokers - represent themselves & Insured; Solicitors - represent one agent to solicit leads.
Types of Licensed Producers
Insuring clause/provision (aka Insuring Agreement)
Doctrine of Comity
Indemnify
20. Coverage for catastrophic loss w/ high limits - front end deductible; co-insurance (80/20%); blanket coverage; stop loss max.
Major Medical plan
Reinstatement provision
Free Look provision
Relation of Earnings to Insurance provision
21. Qualified Annuity - Tax-deductible contributions & tax-deferred growth but fully taxable w/drawals.
Loss exposure
Guaranteed Insurability Life rider
Disability Income policy
Tax implications of an Annuity (1 of 2)
22. Available for any reason up to full cash value @ fixed (max 8%) OR variable interest rate; loan $ + interest deducted from benefit @ death.
Total disability (any-occupational definition)
AIDS/HIV discrimination
Policy loans
Reinsurance
23. Potential circumstance that could cause a loss; measured in dollars.
Penalties for violating AIDS/HIV privacy laws
Flexible Spending Account (FSA)
Loss exposure
Types of Term Life policies
24. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.
Premium modes
Term Life policy
Types of Accident & Health insurance
Cash value
25. A lapsed policy may be reinstated if not longer than 3-5 yrs. - & proof of insurability re-established - & back premiums + interest paid.
Reinstatement provision
Beneficiary provisions
Employee Retirement Income Security Act (ERISA)
Total disability (any-occupational definition)
26. Same as WL but can be "paid-up" early by paying larger premium for shorter payment period (i.e. 10 Pay Life - 20 Pay Life).
Residual disability rider
Plans A-L of Medical Supplement or Medigap
Limited Pay Whole Life policy
Return of Cash Value rider
27. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.
Dividends
Cost of Living Adjustment (COLA) Disability rider
Policy loans
Employee Retirement Income Security Act (ERISA)
28. Non-qualified Annuity - Non-deductible contributions & tax-deferred growth. At pay-out - tax-free principal but taxable growth.
Tax implications of an Annuity (1 of 2)
Spendthrift provision
Types of Insurers (by ownership)
Types of Accident & Health (A&H) providers
29. No deductible coverage for: daily room/board; ancillary costs; surgeon &/or physician expense (for added premium).
Relation of Earnings to Insurance provision
Return of Cash Value rider
Basic Medical plan
Medicaid/Medi-Cal
30. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).
Estoppel
Medicaid/Medi-Cal
Types of Insurers (by authorization)
Key Employee policy
31. 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.
Civil Rights/Pregnancy Discrimination Act
Waiver of Premium provision
Incontestability clause/provision
Return of Premium rider
32. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.
Common Accident provision
Approval Type Conditional receipt
Accidental Death (aka Multiple Indemnity) rider
Annuity
33. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.
Phases of an annuity
Time Limit on Certain Defenses provision
Trial Application (aka Request for Offer)
Recurrent disability clause/provision
34. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.
Health Reimbursement Account (HRA)
Accidental Death (aka Multiple Indemnity) rider
Factors that determine premium
Small Employer Medical Expense plan
35. Covers disabilities occurring both "on" AND "off" job; "on" job benefits paid in addition to work. comp. - if applicable (i.e. individual plan).
Peril vs. Hazard
Occupational Disability policy
Insurance contract characteristics (2 of 2)
Business Continuation (aka Buy-Sell) Disability policy
36. Info already known; Info that should have been known; Waived info; Irrelevant info.
Concealment exceptions
Flexible Spending Account (FSA)
Family Income policy
CA Work. Comp. Statutes
37. No coverage for injuries while: 1: @ voluntary social event; 2: self-inflicted (intentional); 3: under alcohol/drug influence; 4: committing criminal act; 5: aggressor in workplace fight; 6: participating in athletic event (non-pro. athletes) 7: par
Automatic Premium Loan (APL) provision
Rate (as defined by CIC)
Types of Insurers (miscellaneous)
Exclusions to Work. Comp.
38. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).
Medicare Part D
Point of Service plan
Risk management
Loss of Earnings Test
39. Covers entire family w/ WL for breadwinner & (convertible) Level Term for spouse & children (until certain age).
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Key Employee Disability policy
Departments of an Insurer
Family policy
40. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Common Accident provision
Group Disability plan
Blue Cross/Blue Shield
Types of reinsurance
41. Basic Medical; Major Medical; Comprehensive Major Medical
Limited Pay Whole Life policy
Applicant Representations vs. Warranties
Types of Medical Plans
CHAMPUS (aka TriCare)
42. Grows @ fixed interest rate for set term but cash value may adjust to prevailing rate (+ or -) if fully surrendered before term ends; % w/drawal ok.
Total disability (as commonly defined)
Market Value Adjusted (aka Modified Guaranteed) annuity
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Types of Agency Authority
43. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.
Free Look provision
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Elimination (aka Waiting) period
Annuity Classifications (2 of 5): When benefits begin
44. Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling - stock investment).
7 Pay Test
Juvenile Life (aka Jumping Juvenile) policy
Pure risk vs. Speculative risk
Relation of Earnings to Insurance provision
45. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
AIDS/HIV discrimination
Cash value
Legal Action provision
46. 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.
Social Security Benefit (Supplement) rider
CA Work. Comp. Statutes
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Types of Insurers (by sector)
47. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.
Types of Renewability provisions
CHAMPUS (aka TriCare)
Limited Pay Whole Life policy
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
48. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.
Credit Life policy
Phases of an annuity
Key Employee policy
Cost of Living Adjustment (COLA) Disability rider
49. Refund of 50-80% of premium (minus claims paid) every 5-10 yrs. OR age 65; expensive!
Annuity
Return of Premium rider
Indemnify
Claim Form (aka Proof of Loss Form) provision
50. No-charge annuity w/drawals allowed up to 10% of total - THEN penalized on sliding scale based on # policy yrs.; conditionally waived.
Approval Type Conditional receipt
Blackout Period
Earned vs. Unearned premium
Annuity surrender charges