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. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.






2. Federal law which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.






3. Federal law allows employees/their dependents to continue group benefits w/in 60 days after termination (if employer has 20+ employees); Insured pays premium @ 102% of group cost.






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






5. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.






6. Provides % of monthly income benefit if Insured becomes disabled due to illness or accident.






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






8. Prepaid med. benefits for members ONLY w/ approved primary care M.D. (HMO employee); focus on preventative care; low co-pay.






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






10. Prohibited w/ regard to testing for people of same class; test results must remain confidential; coverage may be declined (once discovered).






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






12. Privately-provided or Medicare-provided (if no private carrier) prescription drug plans for qualified individuals but w/ premium - deductible & co-pay.






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






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






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






16. Upon death - death benefit is paid + the aggregate of cash value accumulated to date; add-on to WL policy ONLY.






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






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






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






20. War - 2 types; Suicide (1st 2 yrs.); Aviation (non-commercial); Hazardous hobbies; Criminal acts; Alcohol/Drug influenced.






21. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.






22. 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.






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






24. Same as Universal Life but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.






25. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.






26. Potential circumstance that could cause a loss; measured in dollars.






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






28. Insurance purchased by other Insurer(s) to spread or diversify risk; promotes industry stability.






29. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.






30. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.






31. Waives premium upon disability of Insured until return to work; disability must persist for 6 mths. or longer. Cash value & dividends not affected.






32. 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;






33. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.






34. Federally-funded but state-run program for truly indigent individuals & families providing medical care at Federal clinic.






35. Federal law which prohibits companies w/ 15+ employees from decreasing coverage benefits for women affected by pregnancy or childbirth.






36. 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.






37. Mathematical law stating the larger # of occurrences - the more predictable the losses; used to calculate premiums.






38. Premiums determined by target cash values or death benefit; partial cash value w/drawals allowed; transparent policy w/ unbundled premium.






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






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






41. Group plan initially self-funded by employer (like SIR); after which - group plan Insurer covers (up to policy limit); requires TPA.






42. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.






43. Same as Comprehensive Major Medical but w/ integrated deductible; much more expensive.






44. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.






45. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.






46. 1: Cash (tax-free); 2: Apply to future premiums; 3: Retained by Insurer @ interest; 4: Buy Paid-up WL policy add-ons; 5: Pay-up existing policy; 6: Buy 1-yr. Term policy.






47. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.






48. Req. by CA statute & may provide workers coverage for action-over claims.






49. Same as WL but premium low for set # yrs. - THEN premiums vary (+ or -) based on Insurer's investment returns - w/ Gmax.






50. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.