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Test your basic knowledge |
CA Life Agent Exam
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Subject
:
certifications
Instructions:
Answer 50 questions in 15 minutes.
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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. 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
Accidental Death & Dismemberment (AD&D) Disability rider
Indemnify
Juvenile Life (aka Jumping Juvenile) policy
2. Representation - oral or written statement made to best of knowledge or belief; Warranty - statement guaranteed/presumed/understood to be true.
Applicant Representations vs. Warranties
Tax implications of an Annuity (1 of 2)
Renewability provision
Major Medical plan
3. Prepaid med. benefits for members ONLY w/ approved primary care M.D. (HMO employee); focus on preventative care; low co-pay.
Health Maintenance Organization (HMO)
Dread Disease policy
Term Life policy
Settlement options for Life policy (2 of 2)
4. Same as WL but cash value increases @ current interest rates (not set); premium can start low or high & may change.
Automatic Premium Loan (APL) provision
Current Assumption (aka Interest-Sensitive) Whole Life policy
Claim Form (aka Proof of Loss Form) provision
Tax implications of medical plans
5. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.
Whole (aka Permanent or Straight) Life policy
Life insurance policy
Single Pay Whole Life policy
Medicaid/Medi-Cal
6. Unilateral - Insurer provides contract; Adhesion - parties must adhere to terms; Aleatory - benefits may not inure equally.
Return of Premium rider
Legal Action provision
Settlement options for Life policy (1 of 2)
Insurance contract characteristics (1 of 2)
7. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.
Insuring clause/provision (aka Insuring Agreement)
Payment of Premium provision
Convertibility provision
Notice of Claim provision
8. Written policy terms supersede oral statements made prior to policy issue.
Reinstatement provision
Parole Pardon Rule
Indeterminate Premium Whole Life policy
Types of Accident & Health (A&H) providers
9. An attempt to contain costs by employing various strategies - including wellness programs - preventative testing - outpatient & alternative procedures.
Medical cost containment (aka Managed care)
Annuity Classifications (1 of 5): How premium is paid
Indeterminate Premium Whole Life policy
Split Dollar Plan
10. Monthly; Quarterly; Semi-annually; Annually (cheapest due to less admin cost).
Types of reinsurance
Requirements to sell variable life products
Medicare Part D
Premium modes
11. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.
Tax implications of an Estate
Limited Pay Whole Life policy
Dividend options
Life insurance policy
12. Provides professional services - rehabilitation - training/re-training & related costs to assist Insured in returning to work.
Rehabilitation rider
Group Disability plan
Pure risk vs. Speculative risk
Policy delivery
13. 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
Equity Indexed annuity
Accidental Death (aka Multiple Indemnity) rider
Exclusions to Work. Comp.
Medicare Part A & B "Gaps"
14. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.
Binding receipt (aka Temporary Insurance Agreement)
1035 Exchange
Adjustable Whole Life policy
Medi-Cal Share Cost plan
15. Provides supplemental coverage for physician/surgeon fees if enrolled (during enrollment period ONLY) & pay monthly premium w/ deductible and co-insurance.
Cash value
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Insurable interest
Grace Period provision
16. A lapsed policy may be reinstated if not longer than 3-5 yrs. - & proof of insurability re-established - & back premiums + interest paid.
Binding receipt (aka Temporary Insurance Agreement)
Reinstatement provision
Variable Life policy (2 of 2)
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
17. Grows @ fixed min. interest rate but w/ possible higher rate tied to equity index (i.e S&P Equity Index) appreciation; gains shared w/ Insurer.
Equity Indexed annuity
Permanent vs. Temporary disability
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Graded Premium Whole Life policy
18. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.
Workers' Compensation insurance
Return of Premium rider
Needs approach (most common)
Incontestability clause/provision
19. Federal law to protect Federal employees' (& their beneficiaries') pension - group insurance - & welfare benefits.
Employee Retirement Income Security Act (ERISA)
Disability Income policy
Modified Endowment Contract (MEC)
CA Work. Comp. Statutes
20. Waives premium upon disability of Insured until return to work; disability must persist for 6 mths. or longer. Cash value & dividends not affected.
Needs approach (most common)
Waiver of Premium (Waiver of Cost of Insurance) rider
Health Maintenance Organization (HMO)
Family policy
21. Benefits NOT taxable; employer-paid premiums deductible to employer; individual plans not deductible unless over 7 1/2% of adjusted gross income - then excess deductible.
Tax implications of medical plans
Non-Occupational Disability policy
Medicare Part C (aka Medicare Advantage)
Total disability (as commonly defined)
22. War; elective cosmetic surgery; routine dental; work. comp.-covered claims; self-inflicted (intentional); gov't. facility treatment; LTC; private nursing.
Limited Pay Whole Life policy
Exclusions for Major Medical plan
Tax implications of an Annuity (1 of 2)
Reinstatement provision
23. Must be delivered in person or by certified - registered or 1st-class mail w/ signature - unless waived by Insurance Commissioner.
Major Medical plan
Life insurance policy
Current Assumption (aka Interest-Sensitive) Whole Life policy
Policy delivery
24. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.
Insuring clause/provision (aka Insuring Agreement)
Types of reinsurance
Adjustable Whole Life policy
Convertibility provision
25. Provides hospital insurance automatically @ age 65 (if FICA qualified) @ no fee but may have deductible & co-pay.
Common Disability Exclusions
Health Reimbursement Account (HRA)
Medicare Part A (aka Hospital Insurance or HI)
Misstatement of Age/Sex provision
26. Req. by CA statute & may provide workers coverage for action-over claims.
Disability Income policy
Return of Cash Value rider
Employer Liability
Premium modes
27. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.
IRS Penalties for Annuities
CHAMPUS (aka TriCare)
Major Medical plan
Types of Insurers (miscellaneous)
28. Agreement - Offer & acceptance; Consideration - application + premium; Legal capacity - licensed &/or competent; Legal purpose - public good.
Return of Cash Value rider
Concealment exceptions
Elements to contract
Primary Insurance Amount (PIA)
29. 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
Types of hazards
Insurable interest
Spendthrift provision
30. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).
Rate (as defined by CIC)
Settlement options for Life policy (2 of 2)
Annuity
Loss of Earnings Test
31. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.
Tax implications of medical plans
Partial disability rider
Departments of an Insurer
Types of Accident & Health insurance
32. Process whereby a reinsurer reinsures w/ another reinsurer.
Retrocession
Time Limit on Certain Defenses provision
Tax implications of Death Benefit & Cash Value
Rehabilitation rider
33. Non-qualified Annuity - Non-deductible contributions & tax-deferred growth. At pay-out - tax-free principal but taxable growth.
Non-Occupational Disability policy
Health Insurance Portability and Accountability Act (HIPAA)
Tax implications of an Annuity (1 of 2)
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
34. Basic Medical; Major Medical; Comprehensive Major Medical
Renewability provision
Common Disability Exclusions
Loss exposure
Types of Medical Plans
35. Provides % of monthly income benefit if Insured becomes disabled due to illness or accident.
Disability Income policy
Medicaid/Medi-Cal
Annuity Classifications (1 of 5): How premium is paid
Dental Plan
36. 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
Whole (aka Permanent or Straight) Life policy
Blue Cross/Blue Shield
Limited Pay Whole Life policy
37. Guaranteed min. interest rate on cash value buildup but possible higher rate if short-term investment returns higher than expected.
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Retrocession
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Impairment (Exclusion) rider
38. Domestic - within home state; Foreign - outside home state; Alien - outside home country.
Reinstatement provision
Beneficiary provisions
Dread Disease policy
Types of Insurers (by domicile)
39. Intentional OR unintentional failure to disclose material underwriting facts that should have been disclosed; grounds for policy rescission.
Concealment
Rate (as defined by CIC)
Non-Occupational Disability policy
Types of Insurers (by sector)
40. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.
Equity Indexed annuity
Revocable vs. Irrevocable beneficiary
Health Insurance Portability and Accountability Act (HIPAA)
Flexible Spending Account (FSA)
41. Mandatory 100% employer-funded coverage for injuries/illnesses occurring "on" job; full-time employees only; exclusive remedy. Provides: 1: unlimited medical benefit; 2: survivor income replacement & funeral ($5 -000 max.); 3: disability benefit @ 66
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42. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.
Annuity Classifications (2 of 5): When benefits begin
Proof of Loss provision
Return of Premium rider
Annuity Classifications (3 of 5): Source of income
43. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Annuity
Indeterminate Premium Whole Life policy
Current Assumption (aka Interest-Sensitive) Whole Life policy
44. A company providing lump sum buyout (50-90% of total) of Life policy; becomes owner & beneficiary & assumes premium payments; usually terminally ill viator.
Beneficiary provisions
Annuity Classifications (5 of 5): # of lives
Annuity Classifications (2 of 5): When benefits begin
Viatical Settlement Provider (VSP)
45. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.
Trial Application (aka Request for Offer)
Experience vs. Community rating in Group Health plan
AIDS/HIV discrimination
Health Insurance Portability and Accountability Act (HIPAA)
46. 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.
Convertibility provision
Cross Purchase Plan
Small Employer Medical Expense plan
Considerations in replacing Health insurance
47. Federal law which allows health coverage portability when changing jobs - so long as previous coverage was in effect 63+ days; allows some tax deductibility for LTC.
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Health Insurance Portability and Accountability Act (HIPAA)
Whole (aka Permanent or Straight) Life policy
Binding receipt (aka Temporary Insurance Agreement)
48. 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.
Exclusions to Work. Comp.
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Settlement options for Life policy (1 of 2)
Annuity Classifications (2 of 5): When benefits begin
49. Mathematical law stating the larger # of occurrences - the more predictable the losses; used to calculate premiums.
Modified Endowment Contract (MEC)
Medicare Part D
Civil Rights/Pregnancy Discrimination Act
Law of Large Numbers
50. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.
Concealment exceptions
Beneficiary provisions
24 Hour Coverage (CA)
Types of Agency Authority
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