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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. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.
Medicare Supplement or Medigap policy
Suicide clause/provision
Joint Life (aka "First to die") policy
Annuity Classifications (1 of 5): How premium is paid
2. Same as Term Life but provides living benefit (endowment) to policy owner if Insured survives entire term.
Total disability (more restrictive definition)
Automatic Premium Loan (APL) provision
Endowment Life policy
Dependent coverage
3. Same as Universal Life but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Variable Universal Life policy
Trial Application (aka Request for Offer)
Elimination (aka Waiting) period
Comprehensive Major Medical plan
4. Policy must be delivered w/ original (or copy of same) application attached.
Annuity Classifications (3 of 5): Source of income
Entire Contract provision
CA Work. Comp. Statutes
Annuity Classifications (1 of 5): How premium is paid
5. Conditional - coverage is conditional; Personal - parties are people; Good faith - honesty/integrity; Fiduciary - req's financial trust.
Non-Occupational Disability policy
Tax implications of an Annuity (1 of 2)
Insurance contract characteristics (2 of 2)
Juvenile Life (aka Jumping Juvenile) policy
6. Death benefit determined by Insured's financial goals & needs (minus assets).
Departments of an Insurer
Major Medical plan
Needs approach (most common)
Suicide clause/provision
7. Provides coverage for specific disease(s) - such as cancer or leukemia.
Dread Disease policy
Term Life policy
Supplemental Major Medical plan
Graded Premium Whole Life policy
8. Provides supplemental coverage for physician/surgeon fees if enrolled (during enrollment period ONLY) & pay monthly premium w/ deductible and co-insurance.
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Accidental Death & Dismemberment (AD&D) Disability rider
Incontestability clause/provision
Blue Cross/Blue Shield
9. 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
Annuity Classifications (2 of 5): When benefits begin
Levels of Long Term Care provided
Pure risk vs. Speculative risk
Exclusions to Work. Comp.
10. Waives premium upon disability of Insured until return to work; disability must persist for 6 mths. or longer. Cash value & dividends not affected.
Waiver of Premium (Waiver of Cost of Insurance) rider
Elements to contract
Family Maintenance policy
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
11. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)
Exclusions for Major Medical plan
Annuity Classifications (1 of 5): How premium is paid
Tax implications of an Annuity (1 of 2)
Doctrine of Comity
12. Provides % of monthly income benefit if Insured becomes disabled due to illness or accident.
Disability Income policy
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Waiver of Premium provision
Pure risk vs. Speculative risk
13. Policy provisions must conform to state regulations where policy is sold.
Equity Indexed annuity
Business Continuation (aka Buy-Sell) Disability policy
Conformity with State Statute provision
Blue Cross/Blue Shield
14. Unilateral - Insurer provides contract; Adhesion - parties must adhere to terms; Aleatory - benefits may not inure equally.
Types of Accident & Health (A&H) providers
Common Accident provision
Insurance contract characteristics (1 of 2)
Dread Disease policy
15. Group plan initially self-funded by employer (like SIR); after which - group plan Insurer covers (up to policy limit); requires TPA.
Employer Liability
Needs approach (most common)
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Employer-Administered plan
16. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Tax implications of Disability policy
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Equity Index Whole Life policy
17. Intentional deception; grounds for rescission.
Waiver of Premium provision
Medicare Part A (aka Hospital Insurance or HI)
Proof of Loss provision
Fraud
18. Beneficiary has right to leave death benefits / Insurer to protect $ from creditors; interest (taxable) paid on retained funds.
Family Income policy
Cash value
Spendthrift provision
Doctrine of Comity
19. Agreement - Offer & acceptance; Consideration - application + premium; Legal capacity - licensed &/or competent; Legal purpose - public good.
Juvenile Life (aka Jumping Juvenile) policy
Limited Pay Whole Life policy
Elements to contract
Medicare Part C (aka Medicare Advantage)
20. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.
Tax implications of an Annuity (1 of 2)
Modified Endowment Contract (MEC)
Entire Contract provision
Convertibility provision
21. Info already known; Info that should have been known; Waived info; Irrelevant info.
Cross Purchase Plan
Applicant Representations vs. Warranties
Experience vs. Community rating in Group Health plan
Concealment exceptions
22. Fixed premium w/ guaranteed min. death benefit that may increase due to higher than expected investment returns.
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Variable Life policy (2 of 2)
Accidental Death & Dismemberment (AD&D) Disability rider
Major Medical plan
23. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.
Insurer (as defined by CIC)
Variable Life policy (1 of 2)
Medicaid/Medi-Cal
Relation of Earnings to Insurance provision
24. Domestic - within home state; Foreign - outside home state; Alien - outside home country.
Spendthrift provision
Types of Insurers (by domicile)
Health Reimbursement Account (HRA)
Policy delivery
25. Provides benefit during Social Security "black-out" period - up to 1 yr.
Free Look provision
Types of reinsurance
Social Security Benefit (Supplement) rider
Total disability (more restrictive definition)
26. 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.
Grace Period provision
Insurance contract characteristics (2 of 2)
Tax implications of an Estate
Notice of Claim provision
27. 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.
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Variable Universal Life policy
Equity Indexed annuity
Types of Term Life policies
28. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.
Dependent coverage
Mortality vs. Morbidity tables
Applicant Representations vs. Warranties
7 Pay Test
29. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.
Whole (aka Permanent or Straight) Life policy
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Elimination (aka Waiting) period
Medical Savings Account (MSA) & Health Savings Account (HSA)
30. Process whereby a reinsurer reinsures w/ another reinsurer.
Variable Universal Life policy
Life insurance policy
Employer Liability
Retrocession
31. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.
IRS Penalties for Annuities
Medical Savings Account (MSA) & Health Savings Account (HSA)
Medi-Cal Share Cost plan
Insurer (as defined by CIC)
32. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.
Permanent vs. Temporary disability
Primary Insurance Amount (PIA)
Departments of an Insurer
Phases of an annuity
33. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.
Spendthrift provision
Types of Licensed Producers
Departments of an Insurer
Penalties for violating AIDS/HIV privacy laws
34. No-charge annuity w/drawals allowed up to 10% of total - THEN penalized on sliding scale based on # policy yrs.; conditionally waived.
Rescission
Residual disability rider
Annuity surrender charges
Blackout Period
35. 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.
Health Reimbursement Account (HRA)
Common Disability Exclusions
Policy loans
Convertibility provision
36. 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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37. 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;
Single Pay Whole Life policy
Common Disability Exclusions
Trial Application (aka Request for Offer)
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
38. 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
Dental Plan
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Valid life insurance contracts must identify...
39. Unintentional - up to $1 -000 + legal $; Intentional - $1 -000-5 -000 + legal $; If harmful - misdemeanor + up to 1 yr. prison + up to $10 -000.
Indemnify
Accidental Death (aka Multiple Indemnity) rider
Penalties for violating AIDS/HIV privacy laws
Endowment Life policy
40. Facultative - case by case agreements; Automatic/Treaty - automatic acceptance of risk percentage per previous agreement.
Types of reinsurance
Claim Form (aka Proof of Loss Form) provision
Trial Application (aka Request for Offer)
Market Value Adjusted (aka Modified Guaranteed) annuity
41. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.
Types of Renewability provisions
Elements to contract
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Guaranteed Insurability Life rider
42. Treating or mitigating loss exposures through 1: avoidance; 2: retention (deductibles); 3: sharing; 4: reduction; or 5: transfer.
Business Continuation (aka Buy-Sell) Disability policy
Reinsurance
Entire Contract provision
Risk management
43. Federally-sponsored health care for individuals 65+ &/or w/ certain disabilities; may run concurrent w/ group plan but group plan would act primary - THEN Medicare.
Medicare
Variable Universal Life policy
Occupational Disability policy
Tax implications of Death Benefit & Cash Value
44. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.
Payor (aka Waiver of Payor's Premium) rider
Types of Medical Plans
Indemnify
Equity Indexed annuity
45. Monthly; Quarterly; Semi-annually; Annually (cheapest due to less admin cost).
Premium modes
Impairment (Exclusion) rider
Cash value
Factors that determine premium
46. If Insured changes to: more hazardous job - benefits reduced; less hazardous job - premiums reduce.
Beneficiary provisions
Insurance contract characteristics (2 of 2)
Total disability (as commonly defined)
Change of Occupation provision
47. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Accidental Death & Dismemberment (AD&D) Life policy
Dental Plan
Parole Pardon Rule
Reinsurance
48. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.
Revocable vs. Irrevocable beneficiary
Types of Insurers (by ownership)
Occupational Disability policy
Trial Application (aka Request for Offer)
49. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.
Underwriting risk categories
Types of Licensed Producers
Insurable interest
Claim Form (aka Proof of Loss Form) provision
50. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.
Social Security Benefit (Supplement) rider
Primary Insurance Amount (PIA)
Medical Savings Account (MSA) & Health Savings Account (HSA)
CHAMPUS (aka TriCare)