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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. Peril is the CAUSE of loss. Hazard is a condition that increases LIKELIHOOD of loss.
Peril vs. Hazard
Survivorship (aka "Last to die") policy
Health Reimbursement Account (HRA)
Variable Life policy (2 of 2)
2. Same as Comprehensive Major Medical but w/ integrated deductible; much more expensive.
Occupational Disability policy
Plans A-L of Medical Supplement or Medigap
Supplemental Major Medical plan
Key Employee policy
3. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.
Equity Indexed annuity
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Insurer (as defined by CIC)
Accidental Death (aka Multiple Indemnity) rider
4. Mortality is the statistical possibility of death @ each age. Morbidity is the statistical possibility & extent of disability @ each age.
Family policy
Mortality vs. Morbidity tables
Payment of Premium provision
Annuity Classifications (2 of 5): When benefits begin
5. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.
Annuity Classifications (3 of 5): Source of income
Types of Insurers (by domicile)
Dividends
Tax implications of Disability policy
6. Policy provisions must conform to state regulations where policy is sold.
Conformity with State Statute provision
Types of Medical Plans
Medicaid/Medi-Cal
Adjustable Whole Life policy
7. Receipt whereby coverage incepts ONLY after underwriting approval.
Approval Type Conditional receipt
Tax implications of Disability policy
Adjustable Whole Life policy
Non-forfeiture options for WL policy
8. Available for any reason up to full cash value @ fixed (max 8%) OR variable interest rate; loan $ + interest deducted from benefit @ death.
Variable Life policy (1 of 2)
Policy loans
Modified Endowment Contract (MEC)
Medical Savings Account (MSA) & Health Savings Account (HSA)
9. Written policy terms supersede oral statements made prior to policy issue.
Parole Pardon Rule
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Employee Retirement Income Security Act (ERISA)
Payor (aka Waiver of Payor's Premium) rider
10. Same as WL but w/ adjustable death benefit (& corresponding premium) & over-fund option but w/ annually renewable term (ART).
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Free Look provision
Modified Endowment Contract (MEC)
Equity Index Whole Life policy
11. Treating or mitigating loss exposures through 1: avoidance; 2: retention (deductibles); 3: sharing; 4: reduction; or 5: transfer.
Risk management
Non-forfeiture options for WL policy
Employer-Administered plan
Transplant/Cosmetic Surgery rider
12. Prepaid med. benefits for members w/ approved primary care M.D. (independent); low co-pay; non-PPO M.D. can be used at higher cost.
Whole (aka Permanent or Straight) Life policy
Recurrent disability clause/provision
Types of Insurers (by domicile)
Preferred Provider Organization (PPO)
13. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.
Life insurance policy
Types of Insurers (miscellaneous)
Medical cost containment (aka Managed care)
Medicare Part A (aka Hospital Insurance or HI)
14. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.
Incontestability clause/provision
Primary Insurance Amount (PIA)
Medical cost containment (aka Managed care)
Tax implications of Dividends - Loans & Interest
15. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.
Types of Insurers (miscellaneous)
Automatic Premium Loan (APL) provision
Medicare Part D
Partial disability rider
16. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).
Exclusions for Major Medical plan
Health Maintenance Organization (HMO)
Considerations in replacing Health insurance
1035 Exchange
17. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.
Endowment Life policy
Trial Application (aka Request for Offer)
Tax implications of Dividends - Loans & Interest
Primary Insurance Amount (PIA)
18. Life license + NASD (FINRA) Series 6 or 7.
Medicare
Payor (aka Waiver of Payor's Premium) rider
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Requirements to sell variable life products
19. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.
Single Pay Whole Life policy
Equity Indexed annuity
Needs approach (most common)
Free Look provision
20. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.
Equity Index Whole Life policy
IRS Penalties for Annuities
Medical cost containment (aka Managed care)
Indemnify
21. Death benefit determined by Insured's financial goals & needs (minus assets).
Whole (aka Permanent or Straight) Life policy
Needs approach (most common)
Premium modes
Types of Insurers (miscellaneous)
22. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Settlement options for Life policy (2 of 2)
Accidental Death & Dismemberment (AD&D) Disability rider
Policy loans
Settlement options for Life policy (1 of 2)
23. Permanent disability due to total loss of sight - hearing - speech or use of 2 + limbs; benefits paid even while continuing to work.
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Dividends
Dread Disease policy
Presumptive disability
24. An attempt to contain costs by employing various strategies - including wellness programs - preventative testing - outpatient & alternative procedures.
Medical cost containment (aka Managed care)
Insuring clause/provision (aka Insuring Agreement)
Spendthrift provision
Transplant/Cosmetic Surgery rider
25. Refund of 50-80% of premium (minus claims paid) every 5-10 yrs. OR age 65; expensive!
Return of Premium rider
Term Life policy
Levels of Long Term Care provided
Medicare Supplement or Medigap policy
26. Funding mechanism whereby employer & employee share cost of premium. Upon death - benefit is shared between employer & beneficiary.
Estoppel
Split Dollar Plan
Fraud
Types of hazards
27. 4: Funds retained by Insurer until w/drawn - interest ONLY paid monthly (taxable); 5: Paid-up immediate annuity.
Settlement options for Life policy (2 of 2)
Dread Disease policy
Rescission
Payment of Premium provision
28. 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;
Dental Plan
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Common Disaster (Simultaneous Death Act) clause/provision
Term Life policy
29. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.
Incontestability clause/provision
Legal Action provision
Rehabilitation rider
Total disability (any-occupational definition)
30. Plan A is the CORE benefit & is least expensive; All other plans include Plan A + additional benefits. Plans F & J are high deductible. K & L are both deductible & co-pay plans.
Plans A-L of Medical Supplement or Medigap
Viatical Settlement Provider (VSP)
Long Term Care (LTC) policy
Rate (as defined by CIC)
31. Receipt whereby coverage incepts immediately upon submission of full consideration - unless declined & premium refunded.
Binding receipt (aka Temporary Insurance Agreement)
Permanent vs. Temporary disability
Medicare Part C (aka Medicare Advantage)
Return of Cash Value rider
32. Provides for continued operation of business if partner dies - by allowing surviving partner(s) to buy deceased partner's interest in business.
Waiver of Premium (Waiver of Cost of Insurance) rider
Revocable vs. Irrevocable beneficiary
Business Continuation (aka Buy-Sell) policy
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
33. Domestic - within home state; Foreign - outside home state; Alien - outside home country.
Time Limit on Certain Defenses provision
Phases of an annuity
Supplemental Major Medical plan
Types of Insurers (by domicile)
34. Same as WL but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Variable Life policy (1 of 2)
Medi-Cal Share Cost plan
Proof of Loss provision
Variable Universal Life policy
35. Federal law which prohibits companies w/ 15+ employees from decreasing coverage benefits for women affected by pregnancy or childbirth.
Types of Insurers (by ownership)
Civil Rights/Pregnancy Discrimination Act
Family Income policy
Return of Premium rider
36. 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
1035 Exchange
Business Continuation (aka Buy-Sell) Disability policy
Modified Premium Whole Life policy
37. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Underwriting risk categories
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Exclusions to Work. Comp.
38. Part A - Inpatient hospital deductibles vary on # of days; limited reserve days; finite benefit; 1st 3 pints blood; Part B - 20% co-payment.
Medicare Part A & B "Gaps"
Annuity Classifications (5 of 5): # of lives
Medicaid/Medi-Cal
Business Continuation (aka Buy-Sell) Disability policy
39. 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.
Business Continuation (aka Buy-Sell) policy
Human Life Value approach
Endowment Life policy
Equity Indexed annuity
40. Grows @ fixed interest rate for set term but cash value may adjust to prevailing rate (+ or -) if fully surrendered before term ends; % w/drawal ok.
Exclusions for Major Medical plan
Plans A-L of Medical Supplement or Medigap
Market Value Adjusted (aka Modified Guaranteed) annuity
Current Assumption (aka Interest-Sensitive) Whole Life policy
41. Beneficiary has right to leave death benefits / Insurer to protect $ from creditors; interest (taxable) paid on retained funds.
7 Pay Test
Reinstatement provision
Spendthrift provision
Employer-Administered plan
42. Identical to Incontestable Clause in Life policy.
Errors & Omissions (E&O)
Types of reinsurance
Fraud
Time Limit on Certain Defenses provision
43. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.
Palliative vs. Curative care
Indemnify
Modified Premium Whole Life policy
Medicare Part A (aka Hospital Insurance or HI)
44. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.
Revocable vs. Irrevocable beneficiary
Valid life insurance contracts must identify...
Impairment (Exclusion) rider
Insurer (as defined by CIC)
45. Process which prevents claim denial as a result of false statement or promise (made by Insurer) - which was relied upon by Insured.
Reinstatement provision
Earned vs. Unearned premium
Estoppel
Parole Pardon Rule
46. Representation - oral or written statement made to best of knowledge or belief; Warranty - statement guaranteed/presumed/understood to be true.
Change of Occupation provision
Applicant Representations vs. Warranties
Preferred Provider Organization (PPO)
Annuity Classifications (2 of 5): When benefits begin
47. Earned premium is $ paid for coverage to date. Unearned premium is $ paid & returnable due to coverage not provided.
Occupational Disability policy
Supplemental Major Medical plan
Earned vs. Unearned premium
Major Medical plan
48. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.
Juvenile Life (aka Jumping Juvenile) policy
Relation of Earnings to Insurance provision
Tax implications of an Estate
Insurer (as defined by CIC)
49. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.
Cross Purchase Plan
Retrocession
Term Life policy
Settlement options for Life policy (2 of 2)
50. Private sector (Commercial) - provides LA&H - P&C - & LTC; Public sector (Gov't) - provides flood - work. comp. - Medicare/Medicaid - Group Life (SGLI/FEGLI).
Types of Insurers (by sector)
7 Pay Test
Dependent coverage
Non-forfeiture options for WL policy