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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. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.
Single Pay Whole Life policy
Palliative vs. Curative care
Binding receipt (aka Temporary Insurance Agreement)
Earned vs. Unearned premium
2. Permanent - not recoverable (spinal cord injury); Temporary - recoverable (temp. illness/injury - broken limb).
Revocable vs. Irrevocable beneficiary
Disability Income policy
Risk management
Permanent vs. Temporary disability
3. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.
Beneficiary provisions
Medicare Part A & B "Gaps"
Convertibility provision
Dividends
4. Identical to Incontestable Clause in Life policy.
Types of Accident & Health (A&H) providers
Fraud
Time Limit on Certain Defenses provision
IRS Penalties for Annuities
5. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).
1035 Exchange
Tax implications of Death Benefit & Cash Value
Modified Endowment Contract (MEC)
Levels of Long Term Care provided
6. Mathematical law stating the larger # of occurrences - the more predictable the losses; used to calculate premiums.
Credit Life policy
Split Dollar Plan
Law of Large Numbers
Point of Service plan
7. Fixed premium w/ guaranteed min. death benefit that may increase due to higher than expected investment returns.
Variable Life policy (2 of 2)
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Adjustable Whole Life policy
Settlement options for Life policy (2 of 2)
8. Same as WL but w/ Decreasing Term rider; upon death - pays monthly income for REMAINING term AFTER which pays full death benefit.
Family Income policy
Settlement options for Life policy (1 of 2)
Medical Savings Account (MSA) & Health Savings Account (HSA)
Non-forfeiture options for WL policy
9. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.
Credit Life policy
Free Look provision
Whole (aka Permanent or Straight) Life policy
Trial Application (aka Request for Offer)
10. A company providing lump sum buyout (50-90% of total) of Life policy; becomes owner & beneficiary & assumes premium payments; usually terminally ill viator.
Viatical Settlement Provider (VSP)
Factors that determine premium
Family Income policy
Workers' Compensation insurance
11. Benefits automatically increase annually based on inflationary index (i.e. Consumer Price Index) OR flat rate (5% max.).
Settlement options for Life policy (1 of 2)
Cost of Living Adjustment (COLA) Disability rider
Joint Life (aka "First to die") policy
Notice of Claim provision
12. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).
Common Disability Exclusions
Trusts
Types of Agency Authority
Blackout Period
13. Allows Insured to increase death benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age.
Guaranteed Insurability Life rider
Dividends
Social Security Benefit (Supplement) rider
Employee Retirement Income Security Act (ERISA)
14. Upon death - death benefit is paid + the aggregate of premiums paid to date; add-on to Term policy ONLY.
Equity Index Whole Life policy
Types of Term Life policies
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Return of Premium rider
15. 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.
Medicare Part A & B "Gaps"
24 Hour Coverage (CA)
Convertibility provision
Workers' Compensation insurance
16. Provides hospital insurance automatically @ age 65 (if FICA qualified) @ no fee but may have deductible & co-pay.
Premium modes
Insuring clause/provision (aka Insuring Agreement)
Business Continuation (aka Buy-Sell) policy
Medicare Part A (aka Hospital Insurance or HI)
17. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.
Family Income policy
Preferred Provider Organization (PPO)
Relation of Earnings to Insurance provision
Modified Endowment Contract (MEC)
18. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.
Earned vs. Unearned premium
Flexible Spending Account (FSA)
Small Employer Medical Expense plan
Rate (as defined by CIC)
19. Excludes coverage for suicide during 1st 2 yrs. ONLY but - if it does - all premiums must be returned to beneficiary.
Preferred Provider Organization (PPO)
Estoppel
Graded Premium Whole Life policy
Suicide clause/provision
20. Covers entire family w/ WL for breadwinner & (convertible) Level Term for spouse & children (until certain age).
Family policy
Family or Dependents rider
Blackout Period
Settlement options for Life policy (2 of 2)
21. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.
Trial Application (aka Request for Offer)
Common Accident provision
Life insurance policy
Penalties for violating AIDS/HIV privacy laws
22. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.
Types of Term Life policies
Equity Index Whole Life policy
Estoppel
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
23. Premiums determined by target cash values or death benefit; partial cash value w/drawals allowed; transparent policy w/ unbundled premium.
Business Continuation (aka Buy-Sell) Disability policy
Types of Insurers (by sector)
Beneficiary provisions
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
24. Provides % of monthly income benefit if Insured becomes disabled due to illness or accident.
Parole Pardon Rule
Disability Income policy
Legal Action provision
1035 Exchange
25. 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.
Graded Premium Whole Life policy
Types of Medical Plans
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Waiver of Premium provision
26. 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
Recurrent disability clause/provision
Risk management
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Retrocession
27. Expands individual WL policy to include Term Life for dependents (spouse - children - etc.).
Family or Dependents rider
Health Reimbursement Account (HRA)
Cost of Living Adjustment (COLA) Disability rider
Dividend options
28. Conditional - coverage is conditional; Personal - parties are people; Good faith - honesty/integrity; Fiduciary - req's financial trust.
Tax implications of an Annuity (1 of 2)
Conformity with State Statute provision
Insurance contract characteristics (2 of 2)
Limited Pay Whole Life policy
29. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.
Common Accident provision
Trusts
Annuity Classifications (3 of 5): Source of income
Loss exposure
30. Same as WL but premium low for 1st 5 yrs. - THEN has annual premium increases for set # yrs. - THEN level premium.
Graded Premium Whole Life policy
Insuring clause/provision (aka Insuring Agreement)
Time Limit on Certain Defenses provision
Medi-Cal Share Cost plan
31. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.
Insurance contract characteristics (1 of 2)
Dental Plan
Parole Pardon Rule
Misstatement of Age/Sex provision
32. Federally-funded but state-run program for truly indigent individuals & families providing medical care at Federal clinic.
Medicaid/Medi-Cal
Common Disaster (Simultaneous Death Act) clause/provision
Types of hazards
Medicare Part C (aka Medicare Advantage)
33. 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.
COBRA Time Limitations
Concealment exceptions
Common Disability Exclusions
Convertibility provision
34. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).
Employer Liability
Non-Occupational Disability policy
Loss of Earnings Test
Medi-Cal Share Cost plan
35. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.
Trusts
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Annuity
Single Pay Whole Life policy
36. Monthly; Quarterly; Semi-annually; Annually (cheapest due to less admin cost).
Law of Large Numbers
Waiver of Premium provision
Tax implications of an Estate
Premium modes
37. Basic Medical; Major Medical; Comprehensive Major Medical
COBRA Time Limitations
Conformity with State Statute provision
Types of Medical Plans
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
38. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).
Medicaid/Medi-Cal
Insurable interest
Tax implications of Death Benefit & Cash Value
Modified Endowment Contract (MEC)
39. 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;
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Tax implications of an Annuity (1 of 2)
Medi-Cal Share Cost plan
Experience vs. Community rating in Group Health plan
40. Provides professional services - rehabilitation - training/re-training & related costs to assist Insured in returning to work.
Concealment
Rehabilitation rider
Waiver of Premium provision
Levels of Long Term Care provided
41. A&H - A&S - Sickness only; Medical; Disability; Accident only; Travel accident; LTC; Medicare supplement; AD&D; Dental/Vision/Prescription; Limited.
Policy delivery
Dividend options
Factors that determine premium
Types of Accident & Health insurance
42. Savings account for medical expenses; Tax-deductible contributions; tax-deferred growth; tax-free for qualified use; taxable for non-qualified use.
Basic Medical plan
Indemnify
Medical Savings Account (MSA) & Health Savings Account (HSA)
Approval Type Conditional receipt
43. Covers disabilities occurring both "on" AND "off" job; "on" job benefits paid in addition to work. comp. - if applicable (i.e. individual plan).
Occupational Disability policy
Change of Occupation provision
Medicare Part C (aka Medicare Advantage)
Cost of Living Adjustment (COLA) Life rider
44. Funding mechanism whereby employer & employee share cost of premium. Upon death - benefit is shared between employer & beneficiary.
Annuity Classifications (2 of 5): When benefits begin
Medicare Part C (aka Medicare Advantage)
Split Dollar Plan
Relation of Earnings to Insurance provision
45. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.
Indemnify
Elimination (aka Waiting) period
Reinsurance
Legal Action provision
46. Provides coverage for specific disease(s) - such as cancer or leukemia.
Dread Disease policy
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Consolidated Omnibus Budget Reconciliation Act (COBRA)
7 Pay Test
47. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.
Cash value
Graded Premium Whole Life policy
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Payment of Premium provision
48. Must be delivered in person or by certified - registered or 1st-class mail w/ signature - unless waived by Insurance Commissioner.
Policy delivery
Adverse selection
Tax implications of Disability policy
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
49. Receipt whereby coverage incepts conditionally upon submission of full consideration and that all underwriting reqs. are met.
Settlement options for Life policy (2 of 2)
Total disability (more restrictive definition)
Payment of Premium provision
Insurability Type Conditional receipt
50. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.
Types of Insurers (by authorization)
Settlement options for Life policy (2 of 2)
Incontestability clause/provision
Types of Renewability provisions