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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
Exclusions for Major Medical plan
Automatic Premium Loan (APL) provision
Medicare Supplement or Medigap policy
2. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.
Fraud
Annuity surrender charges
Palliative vs. Curative care
Family or Dependents rider
3. Mathematical law stating the larger # of occurrences - the more predictable the losses; used to calculate premiums.
Law of Large Numbers
Indeterminate Premium Whole Life policy
Tax implications of medical plans
Loss exposure
4. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.
Types of Accident & Health insurance
Factors that determine premium
Renewability provision
Dividends
5. Same as Term Life but provides living benefit (endowment) to policy owner if Insured survives entire term.
Types of Accident & Health insurance
Endowment Life policy
1035 Exchange
Types of Insurers (by domicile)
6. Qualified Annuity - Tax-deductible contributions & tax-deferred growth but fully taxable w/drawals.
Peril vs. Hazard
Retrocession
Family policy
Tax implications of an Annuity (1 of 2)
7. Agents - represent Insurer; Brokers - represent themselves & Insured; Solicitors - represent one agent to solicit leads.
Annuity surrender charges
Types of Licensed Producers
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
IRS Penalties for Annuities
8. Savings account for medical expenses; Tax-deductible contributions; tax-deferred growth; tax-free for qualified use; taxable for non-qualified use.
Medicare
Medical Savings Account (MSA) & Health Savings Account (HSA)
Rescission
Supplemental Major Medical plan
9. A&H - A&S - Sickness only; Medical; Disability; Accident only; Travel accident; LTC; Medicare supplement; AD&D; Dental/Vision/Prescription; Limited.
Types of Accident & Health insurance
Small Employer Medical Expense plan
Juvenile Life (aka Jumping Juvenile) policy
Insurance contract characteristics (1 of 2)
10. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.
Insurance contract characteristics (1 of 2)
Annuity Classifications (5 of 5): # of lives
Insurer (as defined by CIC)
Non-Occupational Disability policy
11. Privately-provided or Medicare-provided (if no private carrier) prescription drug plans for qualified individuals but w/ premium - deductible & co-pay.
Total disability (as commonly defined)
Medicare Part D
Underwriting risk categories
Fraud
12. Same as WL but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Earned vs. Unearned premium
Types of hazards
Health Insurance Portability and Accountability Act (HIPAA)
Variable Life policy (1 of 2)
13. Same as Comprehensive Major Medical but w/ integrated deductible; much more expensive.
Supplemental Major Medical plan
Reinstatement provision
Graded Premium Whole Life policy
Elimination (aka Waiting) period
14. 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
Doctrine of Comity
IRS Penalties for Annuities
Settlement options for Life policy (2 of 2)
15. Level - fixed death benefit - premium fixed until renewal; Decreasing - death benefit decreases over term - premium fixed until renewal; Increasing - death benefit increases over term - premium fixed until renewal.
Workers' Compensation insurance
Tax implications of medical plans
Types of Term Life policies
Social Security Benefit (Supplement) rider
16. Info already known; Info that should have been known; Waived info; Irrelevant info.
Approval Type Conditional receipt
Common Disaster (Simultaneous Death Act) clause/provision
Return of Cash Value rider
Concealment exceptions
17. Unilateral - Insurer provides contract; Adhesion - parties must adhere to terms; Aleatory - benefits may not inure equally.
Insurance contract characteristics (1 of 2)
Business Continuation (aka Buy-Sell) policy
Supplemental Major Medical plan
Experience vs. Community rating in Group Health plan
18. 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.
Primary Insurance Amount (PIA)
Medicare Part C (aka Medicare Advantage)
Types of reinsurance
Long Term Care (LTC) policy
19. Excludes coverage for suicide during 1st 2 yrs. ONLY but - if it does - all premiums must be returned to beneficiary.
Suicide clause/provision
Earned vs. Unearned premium
Dividend options
Juvenile Life (aka Jumping Juvenile) policy
20. 4: Funds retained by Insurer until w/drawn - interest ONLY paid monthly (taxable); 5: Paid-up immediate annuity.
Presumptive disability
Settlement options for Life policy (2 of 2)
Accidental Death (aka Multiple Indemnity) rider
Employer-Administered plan
21. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.
Levels of Long Term Care provided
7 Pay Test
Current Assumption (aka Interest-Sensitive) Whole Life policy
Residual disability rider
22. Part A - Inpatient hospital deductibles vary on # of days; limited reserve days; finite benefit; 1st 3 pints blood; Part B - 20% co-payment.
Current Assumption (aka Interest-Sensitive) Whole Life policy
Non-forfeiture options for WL policy
Medicare Part A & B "Gaps"
AIDS/HIV discrimination
23. Fixed premium w/ guaranteed min. death benefit that may increase due to higher than expected investment returns.
Total disability (as commonly defined)
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Variable Life policy (2 of 2)
Types of reinsurance
24. WL policy covering 2 or more Insureds but ONLY payable upon death of LAST Insured - generally low premium but high death benefit.
Errors & Omissions (E&O)
Survivorship (aka "Last to die") policy
Annuity
Levels of Long Term Care provided
25. Disability policy rider covering "the inability to perform some - but not all of your duties"; pays max. 50% of disability benefit for up to 6 mths.
Return of Premium rider
Cost of Living Adjustment (COLA) Disability rider
Partial disability rider
Types of Term Life policies
26. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.
Departments of an Insurer
Presumptive disability
Free Look provision
Experience vs. Community rating in Group Health plan
27. Conditional - coverage is conditional; Personal - parties are people; Good faith - honesty/integrity; Fiduciary - req's financial trust.
Insurance contract characteristics (2 of 2)
Graded Premium Whole Life policy
Residual disability rider
Concealment exceptions
28. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.
Accidental Death (aka Multiple Indemnity) rider
Long Term Care (LTC) policy
Medicare Part A & B "Gaps"
Credit Life policy
29. Receipt whereby coverage incepts conditionally upon submission of full consideration and that all underwriting reqs. are met.
Health Maintenance Organization (HMO)
Disability Income policy
Insurability Type Conditional receipt
Occupational Disability policy
30. Provides for continued operation of business if partner dies - by allowing surviving partner(s) to buy deceased partner's interest in business.
Permanent vs. Temporary disability
Business Continuation (aka Buy-Sell) policy
Common Disaster (Simultaneous Death Act) clause/provision
Comprehensive Major Medical plan
31. Provides 24 hr. health coverage both "on" & "off" job - but may cause coverage duplication & coordination challenges.
Needs approach (most common)
Limited Pay Whole Life policy
Renewability provision
24 Hour Coverage (CA)
32. Policy owner must notify Insurer of loss either in writing - in person or by phone w/in 20 days.
Tax implications of an Estate
Key Employee policy
Trusts
Notice of Claim provision
33. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Family Income policy
Types of Renewability provisions
Return of Cash Value rider
Group Disability plan
34. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.
Needs approach (most common)
Types of Term Life policies
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Point of Service plan
35. Govt. organization providing health care benefits for dependents of military personnel.
Health Maintenance Organization (HMO)
Medical cost containment (aka Managed care)
CHAMPUS (aka TriCare)
Business Overhead Expense (BOE) Disability policy
36. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).
Term Life policy
Relation of Earnings to Insurance provision
Loss of Earnings Test
Life insurance policy
37. Life license + NASD (FINRA) Series 6 or 7.
Key Employee policy
Types of reinsurance
Requirements to sell variable life products
COBRA Time Limitations
38. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.
Modified Endowment Contract (MEC)
7 Pay Test
Basic Medical plan
Supplemental Major Medical plan
39. Coverage for catastrophic loss w/ high limits - front end deductible; co-insurance (80/20%); blanket coverage; stop loss max.
Major Medical plan
Law of Large Numbers
Retrocession
Insurance contract characteristics (2 of 2)
40. Expands individual WL policy to include Term Life for dependents (spouse - children - etc.).
Indeterminate Premium Whole Life policy
Family or Dependents rider
Policy loans
Accidental Death & Dismemberment (AD&D) Life policy
41. Mortality is the statistical possibility of death @ each age. Morbidity is the statistical possibility & extent of disability @ each age.
Common Disaster (Simultaneous Death Act) clause/provision
Types of Insurers (by sector)
Elements to contract
Mortality vs. Morbidity tables
42. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.
Settlement options for Life policy (2 of 2)
Proof of Loss provision
Valid life insurance contracts must identify...
Mortality vs. Morbidity tables
43. Available for any reason up to full cash value @ fixed (max 8%) OR variable interest rate; loan $ + interest deducted from benefit @ death.
Exclusions to Work. Comp.
Employer-Administered plan
Policy loans
Business Continuation (aka Buy-Sell) policy
44. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.
Life insurance policy
Total disability (as commonly defined)
Blackout Period
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
45. Beneficiary has right to leave death benefits / Insurer to protect $ from creditors; interest (taxable) paid on retained funds.
Spendthrift provision
CHAMPUS (aka TriCare)
Insurance contract characteristics (2 of 2)
Plans A-L of Medical Supplement or Medigap
46. If Insured & primary beneficiary die due to same act (w/in 14 days) - primary assumed 1st to die & contingent beneficiary paid death benefit.
Presumptive disability
Return of Premium rider
Common Disaster (Simultaneous Death Act) clause/provision
Concealment
47. Both Contributory & Non-contributory Group policies are deductible to employer (not employee) but benefits are taxable. Individual policy premium is NOT deductible but benefit is received tax-free.
Tax implications of Disability policy
Family policy
Doctrine of Comity
Impairment (Exclusion) rider
48. Federal law which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.
Insurance contract characteristics (2 of 2)
Types of Insurers (by domicile)
Spendthrift provision
Age Discrimination in Employment Act (ADEA)
49. 'The inability to perform your OWN normal occupation or daily duties'.
Tax implications of an Estate
Total disability (as commonly defined)
Risk management
Grace Period provision
50. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.
Reinsurance
Split Dollar Plan
Types of Renewability provisions
Health Maintenance Organization (HMO)