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. Waives premium upon disability of Insured until return to work; disability must persist for 6 mths. or longer. Cash value & dividends not affected.






2. Intentional deception; grounds for rescission.






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






4. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.






5. Disability policy rider covering "the inability to perform some - but not all of your duties"; pays max. 50% of disability benefit for up to 6 mths.






6. Qualified Annuity - Tax-deductible contributions & tax-deferred growth but fully taxable w/drawals.






7. Benefits automatically increase annually based on inflationary index (i.e. Consumer Price Index) OR flat rate (5% max.).






8. 1: Req. - unless self-employed; 2: 7-day wait for disability benefits; 3: Premium based on ex-mod; 4: Rates approved by CDI; 5: to sell - must satisfy education reqs.






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






10. Savings account for medical expenses; Tax-deductible contributions; tax-deferred growth; tax-free for qualified use; taxable for non-qualified use.






11. Same as Universal Life but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.






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






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






14. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.






15. 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.






16. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.






17. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.






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






19. Federally-funded but state-run program for truly indigent individuals & families providing medical care at Federal clinic.






20. Process whereby a reinsurer reinsures w/ another reinsurer.






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






22. Insurance purchased by other Insurer(s) to spread or diversify risk; promotes industry stability.






23. 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.






24. Identical to Incontestable Clause in Life policy.






25. 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.






26. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.






27. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.






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






29. Life license + NASD (FINRA) Series 6 or 7.






30. Policy provisions must conform to state regulations where policy is sold.






31. Federal law allows employees/their dependents to continue group benefits w/in 60 days after termination (if employer has 20+ employees); Insured pays premium @ 102% of group cost.






32. Mathematical law stating the larger # of occurrences - the more predictable the losses; used to calculate premiums.






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






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






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






36. PURELY employer-funded account to reimburse employees for qualified medical expenses not covered by group health plan.






37. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.






38. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).






39. Monthly; Quarterly; Semi-annually; Annually (cheapest due to less admin cost).






40. Employer w/ 25 or less employees must offer all eligible employees @ least 2 medical plan options where pre-existing conditions can't be excluded more than 1 yr.






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






42. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)






43. Compensates business for loss due to disability of key employee; premiums not deductible but benefits tax-free.






44. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.






45. Coverage remains in effect for 31 days past premium due date; benefits paid during grace period would be deducted from sum.






46. Same as Comprehensive Major Medical but w/ integrated deductible; much more expensive.






47. Combination of Basic Medical & Major Medical in one policy; Basic pays 1st - then Major Medical w/ corridor deductible.






48. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").






49. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.






50. Receipt whereby coverage incepts ONLY after underwriting approval.