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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. Provides professional services - rehabilitation - training/re-training & related costs to assist Insured in returning to work.
Estoppel
Accidental Death & Dismemberment (AD&D) Disability rider
Rehabilitation rider
Spendthrift provision
2. Provides for continued operation of business if partner dies - by allowing surviving partner(s) to buy deceased partner's interest in business.
Spendthrift provision
Current Assumption (aka Interest-Sensitive) Whole Life policy
Trial Application (aka Request for Offer)
Business Continuation (aka Buy-Sell) policy
3. 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.
Risk management
Beneficiary provisions
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
4. Treating or mitigating loss exposures through 1: avoidance; 2: retention (deductibles); 3: sharing; 4: reduction; or 5: transfer.
Risk management
Entire Contract provision
Types of Insurers (miscellaneous)
Residual disability rider
5. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.
Needs approach (most common)
Factors that determine premium
Common Accident provision
Time Limit on Certain Defenses provision
6. Non-qualified Annuity - Non-deductible contributions & tax-deferred growth. At pay-out - tax-free principal but taxable growth.
Tax implications of an Annuity (1 of 2)
Residual disability rider
Partial disability rider
Tax implications of an Estate
7. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).
Incontestability clause/provision
Insurable interest
Family policy
Basic Medical plan
8. Same as Comprehensive Major Medical but w/ integrated deductible; much more expensive.
Dread Disease policy
Free Look provision
Supplemental Major Medical plan
Loss of Earnings Test
9. Life license + NASD (FINRA) Series 6 or 7.
Concealment exceptions
Types of hazards
Requirements to sell variable life products
Law of Large Numbers
10. Provides coverage for specific disease(s) - such as cancer or leukemia.
Premium modes
Types of Agency Authority
Major Medical plan
Dread Disease policy
11. Reappearance of disability w/in 6 mth. period after "recovery" from same disability is considered recurrence - not new disability.
Adverse selection
Pure risk vs. Speculative risk
Non-Occupational Disability policy
Recurrent disability clause/provision
12. The state in which the contract is accepted or delivered is the state that possesses regulatory jurisdiction over Group plan.
Rescission
Types of Insurers (by domicile)
Risk management
Doctrine of Comity
13. Same as WL but w/ Decreasing Term rider; upon death - pays monthly income for REMAINING term AFTER which pays full death benefit.
Family Income policy
Tax implications of Dividends - Loans & Interest
Medical Savings Account (MSA) & Health Savings Account (HSA)
Experience vs. Community rating in Group Health plan
14. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.
Permanent vs. Temporary disability
Renewability provision
7 Pay Test
Dividends
15. Same as WL but premium low for set # yrs. - THEN premiums vary (+ or -) based on Insurer's investment returns - w/ Gmax.
Concealment exceptions
Indeterminate Premium Whole Life policy
Plans A-L of Medical Supplement or Medigap
Applicant Representations vs. Warranties
16. Must be delivered in person or by certified - registered or 1st-class mail w/ signature - unless waived by Insurance Commissioner.
Automatic Premium Loan (APL) provision
Policy delivery
Family policy
Cross Purchase Plan
17. Excludes coverage for specific injury/illness either temporarily or permanently in order to eliminate pre-existing condition.
Employee Retirement Income Security Act (ERISA)
Requirements to sell variable life products
Impairment (Exclusion) rider
Annuity Classifications (2 of 5): When benefits begin
18. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.
Split Dollar Plan
Annuity Classifications (3 of 5): Source of income
Medicare Supplement or Medigap policy
Rescission
19. Compensates business for loss due to disability of key employee; premiums not deductible but benefits tax-free.
Pure risk vs. Speculative risk
Long Term Care (LTC) policy
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Key Employee Disability policy
20. Price of insurance per exposure unit.
Return of Premium rider
Errors & Omissions (E&O)
Insurance contract characteristics (1 of 2)
Rate (as defined by CIC)
21. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.
CA Work. Comp. Statutes
Modified Endowment Contract (MEC)
Health Reimbursement Account (HRA)
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
22. Upon death - death benefit is paid + the aggregate of cash value accumulated to date; add-on to WL policy ONLY.
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Cross Purchase Plan
Equity Indexed annuity
Return of Cash Value rider
23. Covers disabilities occurring both "on" AND "off" job; "on" job benefits paid in addition to work. comp. - if applicable (i.e. individual plan).
Business Continuation (aka Buy-Sell) Disability policy
Long Term Care (LTC) policy
1035 Exchange
Occupational Disability policy
24. Unilateral - Insurer provides contract; Adhesion - parties must adhere to terms; Aleatory - benefits may not inure equally.
Types of Licensed Producers
Insurance contract characteristics (1 of 2)
Market Value Adjusted (aka Modified Guaranteed) annuity
Health Reimbursement Account (HRA)
25. Allows for use of HMO/PPO or other private carrier to provide expanded benefits @ additional premium & if enrolled in BOTH Parts A & B.
Family or Dependents rider
Business Overhead Expense (BOE) Disability policy
Medicare Part C (aka Medicare Advantage)
Convertibility provision
26. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.
Variable Universal Life policy
Tax implications of an Estate
Viatical Settlement Provider (VSP)
IRS Penalties for Annuities
27. Basic Medical; Major Medical; Comprehensive Major Medical
Reinsurance
Types of Medical Plans
IRS Penalties for Annuities
Civil Rights/Pregnancy Discrimination Act
28. Same as WL but w/ Level Term rider; upon death - pays monthly income for FULL term AFTER which pays full death benefit.
Family Maintenance policy
Policy delivery
Survivorship (aka "Last to die") policy
Spendthrift provision
29. Intentional deception; grounds for rescission.
Accidental Death (aka Multiple Indemnity) rider
Fraud
Insurable interest
Business Continuation (aka Buy-Sell) policy
30. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).
Recurrent disability clause/provision
Common Disability Exclusions
Major Medical plan
Adjustable Whole Life policy
31. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.
Misstatement of Age/Sex provision
Types of Insurers (miscellaneous)
Comprehensive Major Medical plan
Impairment (Exclusion) rider
32. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.
Group Disability plan
Medicare Supplement or Medigap policy
Business Overhead Expense (BOE) Disability policy
Types of Insurers (miscellaneous)
33. Federally-funded but state-run program for truly indigent individuals & families providing medical care at Federal clinic.
Medicaid/Medi-Cal
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Long Term Care (LTC) policy
Dread Disease policy
34. Written policy terms supersede oral statements made prior to policy issue.
Human Life Value approach
Graded Premium Whole Life policy
Levels of Long Term Care provided
Parole Pardon Rule
35. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.
Insurance contract characteristics (2 of 2)
Adjustable Whole Life policy
Graded Premium Whole Life policy
Policy delivery
36. If Insured changes to: more hazardous job - benefits reduced; less hazardous job - premiums reduce.
Annuity Classifications (1 of 5): How premium is paid
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Change of Occupation provision
Peril vs. Hazard
37. Unintentional - up to $1 -000 + legal $; Intentional - $1 -000-5 -000 + legal $; If harmful - misdemeanor + up to 1 yr. prison + up to $10 -000.
Employee Retirement Income Security Act (ERISA)
Penalties for violating AIDS/HIV privacy laws
Underwriting risk categories
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
38. No deductible coverage for: daily room/board; ancillary costs; surgeon &/or physician expense (for added premium).
Split Dollar Plan
Experience vs. Community rating in Group Health plan
Basic Medical plan
Loss of Earnings Test
39. Representation - oral or written statement made to best of knowledge or belief; Warranty - statement guaranteed/presumed/understood to be true.
CA Work. Comp. Statutes
Applicant Representations vs. Warranties
Key Employee Disability policy
Employer Liability
40. Dividends are NOT taxable but interest is. Loan interest is NOT tax-deductible. Interest paid by Insurer on retained funds is taxable.
Workers' Compensation insurance
Retrocession
Tax implications of Dividends - Loans & Interest
Group Disability plan
41. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.
Revocable vs. Irrevocable beneficiary
Transplant/Cosmetic Surgery rider
Blue Cross/Blue Shield
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
42. Prohibited w/ regard to testing for people of same class; test results must remain confidential; coverage may be declined (once discovered).
Experience vs. Community rating in Group Health plan
Types of Accident & Health (A&H) providers
AIDS/HIV discrimination
Exclusions for Major Medical plan
43. 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.
Age Discrimination in Employment Act (ADEA)
Basic Medical plan
Long Term Care (LTC) policy
Accidental Death & Dismemberment (AD&D) Disability rider
44. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.
Types of Licensed Producers
Phases of an annuity
Health Insurance Portability and Accountability Act (HIPAA)
Modified Endowment Contract (MEC)
45. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Insurable interest
Family Income policy
Key Employee policy
Dividends
46. Tendency of poorer risks to seek insurance.
Adverse selection
Binding receipt (aka Temporary Insurance Agreement)
Requirements to sell variable life products
Settlement options for Life policy (2 of 2)
47. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.
Parole Pardon Rule
Joint Life (aka "First to die") policy
Equity Index Whole Life policy
Tax implications of an Estate
48. Waives premium upon disability of Insured until return to work; disability must persist for 90 days or longer; 1st 90 day premiums refunded after 90 days.
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Waiver of Premium provision
Rescission
Modified Premium Whole Life policy
49. Same as WL but w/ adjustable death benefit (& corresponding premium) & over-fund option but w/ annually renewable term (ART).
Revocable vs. Irrevocable beneficiary
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Cost of Living Adjustment (COLA) Life rider
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
50. War; elective cosmetic surgery; routine dental; work. comp.-covered claims; self-inflicted (intentional); gov't. facility treatment; LTC; private nursing.
Guaranteed Insurability Life rider
Permanent vs. Temporary disability
Exclusions for Major Medical plan
Binding receipt (aka Temporary Insurance Agreement)