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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.
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. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.
Claim Form (aka Proof of Loss Form) provision
Life insurance policy
Equity Index Whole Life policy
Entire Contract provision
2. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Rescission
Employer Liability
Insurable interest
3. 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
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Total disability (any-occupational definition)
IRS Penalties for Annuities
4. Provides coverage for specific disease(s) - such as cancer or leukemia.
Key Employee Disability policy
Dread Disease policy
Joint Life (aka "First to die") policy
Dividends
5. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.
Variable Life policy (2 of 2)
Business Overhead Expense (BOE) Disability policy
Concealment exceptions
1035 Exchange
6. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Accidental Death & Dismemberment (AD&D) Life policy
Common Accident provision
Levels of Long Term Care provided
Departments of an Insurer
7. Receipt whereby coverage incepts ONLY after underwriting approval.
Approval Type Conditional receipt
Endowment Life policy
Equity Indexed annuity
Comprehensive Major Medical plan
8. Same as WL but w/ Decreasing Term rider; upon death - pays monthly income for REMAINING term AFTER which pays full death benefit.
Medicare
Family Income policy
Guaranteed Insurability Life rider
Risk management
9. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Annuity
Beneficiary provisions
Peril vs. Hazard
Group Disability plan
10. Agreement - Offer & acceptance; Consideration - application + premium; Legal capacity - licensed &/or competent; Legal purpose - public good.
Medicare
Blue Cross/Blue Shield
Elements to contract
Total disability (more restrictive definition)
11. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).
Dividends
Approval Type Conditional receipt
Types of Insurers (by authorization)
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
12. Life license + NASD (FINRA) Series 6 or 7.
Equity Indexed annuity
CA Work. Comp. Statutes
Return of Cash Value rider
Requirements to sell variable life products
13. Primary - if 2 or more - equally shared; Contingent (Secondary) - only if primary dead; Tertiary - only if both primary & secondary dead. If none listed - goes to estate.
COBRA Time Limitations
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Earned vs. Unearned premium
Beneficiary provisions
14. Representation - oral or written statement made to best of knowledge or belief; Warranty - statement guaranteed/presumed/understood to be true.
Spendthrift provision
Applicant Representations vs. Warranties
Cross Purchase Plan
Cost of Living Adjustment (COLA) Disability rider
15. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.
Insurable interest
Change of Occupation provision
Payment of Premium provision
Age Discrimination in Employment Act (ADEA)
16. Tendency of poorer risks to seek insurance.
24 Hour Coverage (CA)
Exclusions to Work. Comp.
Adverse selection
Single Pay Whole Life policy
17. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.
Business Continuation (aka Buy-Sell) Disability policy
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Major Medical plan
Rate (as defined by CIC)
18. 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.
Social Security Benefit (Supplement) rider
Types of Insurers (by sector)
Permanent vs. Temporary disability
Equity Indexed annuity
19. Info already known; Info that should have been known; Waived info; Irrelevant info.
Concealment exceptions
Settlement options for Life policy (2 of 2)
Return of Premium rider
Primary Insurance Amount (PIA)
20. Same as Universal Life but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Types of Licensed Producers
Claim Form (aka Proof of Loss Form) provision
Survivorship (aka "Last to die") policy
Variable Universal Life policy
21. Process which prevents claim denial as a result of false statement or promise (made by Insurer) - which was relied upon by Insured.
Law of Large Numbers
Fraud
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Estoppel
22. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).
Cost of Living Adjustment (COLA) Life rider
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Presumptive disability
Parole Pardon Rule
23. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.
Group Disability plan
Single Pay Whole Life policy
Insurer (as defined by CIC)
Automatic Premium Loan (APL) provision
24. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
IRS Penalties for Annuities
Renewability provision
Insurability Type Conditional receipt
25. WL policy covering 2 or more Insureds but ONLY payable upon death of LAST Insured - generally low premium but high death benefit.
Health Reimbursement Account (HRA)
Survivorship (aka "Last to die") policy
AIDS/HIV discrimination
Return of Premium rider
26. Covers disabilities occurring both "on" AND "off" job; "on" job benefits paid in addition to work. comp. - if applicable (i.e. individual plan).
Split Dollar Plan
Renewability provision
Peril vs. Hazard
Occupational Disability policy
27. Covers disabilities occurring ONLY "off" job; benefits do not overlap work. comp. (i.e. Group plan).
Social Security Benefit (Supplement) rider
Preferred Provider Organization (PPO)
Non-Occupational Disability policy
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
28. 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.
Insurance contract characteristics (1 of 2)
Types of Accident & Health insurance
Tax implications of medical plans
Medicare Part D
29. Two death benefit options - Option A: death benefit ONLY; Option B: death benefit + cash value; death benefit NOT guaranteed.
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Non-Occupational Disability policy
Legal Action provision
Experience vs. Community rating in Group Health plan
30. 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.
Types of Term Life policies
Survivorship (aka "Last to die") policy
Concealment
Partial disability rider
31. Fixed premium w/ guaranteed min. death benefit that may increase due to higher than expected investment returns.
AIDS/HIV discrimination
Variable Life policy (2 of 2)
Types of Renewability provisions
Policy loans
32. 1: Tax-free lump sum; 2: Monthly pay-outs for fixed time; 3: Fixed monthly payments until depleted.
Equity Index Whole Life policy
Recurrent disability clause/provision
Settlement options for Life policy (1 of 2)
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
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.
Types of Insurers (by authorization)
COBRA Time Limitations
Variable Universal Life policy
Needs approach (most common)
34. The state in which the contract is accepted or delivered is the state that possesses regulatory jurisdiction over Group plan.
Doctrine of Comity
Key Employee Disability policy
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Claim Form (aka Proof of Loss Form) provision
35. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.
Annuity Classifications (1 of 5): How premium is paid
Common Life Exclusions
Life insurance policy
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
36. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.
Return of Premium rider
Split Dollar Plan
Cash value
Types of Insurers (by domicile)
37. Funding mechanism whereby employer & employee share cost of premium. Upon death - benefit is shared between employer & beneficiary.
Split Dollar Plan
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Loss of Earnings Test
38. Temp. coverage for set duration w/ death benefit ONLY (no cash value) - offers largest $ for lowest premium; renewable; convertible.
Dividends
Term Life policy
Elements to contract
Total disability (more restrictive definition)
39. Policy must be delivered w/ original (or copy of same) application attached.
Entire Contract provision
Business Overhead Expense (BOE) Disability policy
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Types of hazards
40. 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
Medicare Supplement or Medigap policy
Exclusions to Work. Comp.
Beneficiary provisions
Insurance contract characteristics (2 of 2)
41. A lapsed policy may be reinstated if not longer than 3-5 yrs. - & proof of insurability re-established - & back premiums + interest paid.
Reinstatement provision
Point of Service plan
Insurance contract characteristics (2 of 2)
Recurrent disability clause/provision
42. Policy owner must notify Insurer of loss either in writing - in person or by phone w/in 20 days.
Accidental Death & Dismemberment (AD&D) Disability rider
Notice of Claim provision
Parole Pardon Rule
Types of Accident & Health insurance
43. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.
Non-forfeiture options for WL policy
Policy delivery
Supplemental Major Medical plan
Residual disability rider
44. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.
Modified Premium Whole Life policy
Annuity Classifications (2 of 5): When benefits begin
Tax implications of medical plans
Endowment Life policy
45. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.
Annuity Classifications (5 of 5): # of lives
Business Continuation (aka Buy-Sell) Disability policy
Transplant/Cosmetic Surgery rider
Annuity Classifications (1 of 5): How premium is paid
46. Allows for Term policy renewal @ higher premium w/out medical exam; guarantees insurability; based on actual/attained age.
Renewability provision
Split Dollar Plan
Employer Liability
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
47. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.
Tax implications of Death Benefit & Cash Value
Flexible Spending Account (FSA)
Business Continuation (aka Buy-Sell) policy
Permanent vs. Temporary disability
48. Death benefit is NOT taxable. Cash value grows tax-deferred but cost basis (base premium) is not taxable - only interest is.
Tax implications of Death Benefit & Cash Value
Small Employer Medical Expense plan
Misstatement of Age/Sex provision
Consolidated Omnibus Budget Reconciliation Act (COBRA)
49. Excludes coverage for specific injury/illness either temporarily or permanently in order to eliminate pre-existing condition.
Graded Premium Whole Life policy
Convertibility provision
Preferred Provider Organization (PPO)
Impairment (Exclusion) rider
50. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.
Medicare Part A (aka Hospital Insurance or HI)
Adjustable Whole Life policy
Split Dollar Plan
Social Security Benefit (Supplement) rider
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