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






2. Agreement - Offer & acceptance; Consideration - application + premium; Legal capacity - licensed &/or competent; Legal purpose - public good.






3. Death benefit determined by Insured's financial goals & needs (minus assets).






4. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.






5. Non-qualified Annuity - Non-deductible contributions & tax-deferred growth. At pay-out - tax-free principal but taxable growth.






6. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.






7. 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.






8. Insured can seek legal action against Insurer for denial of claim only after 60 days and up to 3 yrs. after providing proof of loss.






9. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.






10. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.






11. Provides hospital insurance automatically @ age 65 (if FICA qualified) @ no fee but may have deductible & co-pay.






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






13. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.






14. Same as WL but cash value increases @ current interest rates (not set); premium can start low or high & may change.






15. Peril is the CAUSE of loss. Hazard is a condition that increases LIKELIHOOD of loss.






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






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






18. Basic Medical; Major Medical; Comprehensive Major Medical






19. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.






20. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.






21. Provides professional services - rehabilitation - training/re-training & related costs to assist Insured in returning to work.






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






23. Temp. coverage for set duration w/ death benefit ONLY (no cash value) - offers largest $ for lowest premium; renewable; convertible.






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






25. Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling - stock investment).






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






27. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.






28. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).






29. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.






30. Written policy terms supersede oral statements made prior to policy issue.






31. Covers entire family w/ WL for breadwinner & (convertible) Level Term for spouse & children (until certain age).






32. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).






33. Allows Insured to increase death benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age.






34. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)






35. 1: parties to contract; 2: insured party or life; 3: insurable interest - if 3rd party; 4: risks insured against; 5: policy period (term); 6: premium & mode.






36. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.






37. Fraternal - non-profit - members only; Reciprocal - unincorp'd org. - members insure each other; Lloyd's Assoc. - groups sharing risks; Surplus lines - special market risks.






38. Conditional - coverage is conditional; Personal - parties are people; Good faith - honesty/integrity; Fiduciary - req's financial trust.






39. 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.






40. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.






41. Same as WL but w/ adjustable death benefit (& corresponding premium) & over-fund option but w/ annually renewable term (ART).






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






43. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.






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






45. Govt. organization providing health care benefits for dependents of military personnel.






46. Same as Term Life but provides living benefit (endowment) to policy owner if Insured survives entire term.






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






48. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.






49. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.






50. Dividends are NOT taxable but interest is. Loan interest is NOT tax-deductible. Interest paid by Insurer on retained funds is taxable.