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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. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.
Juvenile Life (aka Jumping Juvenile) policy
Payment of Premium provision
Joint Life (aka "First to die") policy
Dividend options
2. Dividends are NOT taxable but interest is. Loan interest is NOT tax-deductible. Interest paid by Insurer on retained funds is taxable.
Payor (aka Waiver of Payor's Premium) rider
Variable Life policy (1 of 2)
Tax implications of Dividends - Loans & Interest
Types of Insurers (miscellaneous)
3. Must be delivered in person or by certified - registered or 1st-class mail w/ signature - unless waived by Insurance Commissioner.
Policy delivery
Risk management
Equity Indexed annuity
Estoppel
4. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.
Medi-Cal Share Cost plan
Business Overhead Expense (BOE) Disability policy
Common Disability Exclusions
Insurer (as defined by CIC)
5. 1: Cash (tax-free); 2: Apply to future premiums; 3: Retained by Insurer @ interest; 4: Buy Paid-up WL policy add-ons; 5: Pay-up existing policy; 6: Buy 1-yr. Term policy.
Dividend options
Annuity Classifications (2 of 5): When benefits begin
Workers' Compensation insurance
Medi-Cal Share Cost plan
6. Treating or mitigating loss exposures through 1: avoidance; 2: retention (deductibles); 3: sharing; 4: reduction; or 5: transfer.
Risk management
Beneficiary provisions
Family or Dependents rider
Preferred Provider Organization (PPO)
7. Agreement - Offer & acceptance; Consideration - application + premium; Legal capacity - licensed &/or competent; Legal purpose - public good.
Spendthrift provision
Elements to contract
Credit Life policy
Dental Plan
8. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.
Loss exposure
Business Continuation (aka Buy-Sell) Disability policy
Policy delivery
Workers' Compensation insurance
9. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.
Elimination (aka Waiting) period
Applicant Representations vs. Warranties
Primary Insurance Amount (PIA)
Medical cost containment (aka Managed care)
10. If Insured & primary beneficiary die due to same act (w/in 14 days) - primary assumed 1st to die & contingent beneficiary paid death benefit.
Trusts
Comprehensive Major Medical plan
Impairment (Exclusion) rider
Common Disaster (Simultaneous Death Act) clause/provision
11. 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
Graded Premium Whole Life policy
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Pure risk vs. Speculative risk
12. Period of time following any children's survivor benefit & before benefits are provided to employee's widow/widower.
Blackout Period
Variable Life policy (2 of 2)
Payment of Premium provision
Term Life policy
13. Provides supplemental coverage for physician/surgeon fees if enrolled (during enrollment period ONLY) & pay monthly premium w/ deductible and co-insurance.
Exclusions to Work. Comp.
Change of Occupation provision
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Common Accident provision
14. Intentional deception; grounds for rescission.
Dividends
Fraud
Valid life insurance contracts must identify...
Earned vs. Unearned premium
15. 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.
Revocable vs. Irrevocable beneficiary
Medicare Supplement or Medigap policy
Small Employer Medical Expense plan
Tax implications of Disability policy
16. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).
Juvenile Life (aka Jumping Juvenile) policy
Time Limit on Certain Defenses provision
Underwriting risk categories
Loss of Earnings Test
17. Savings account for medical expenses; Tax-deductible contributions; tax-deferred growth; tax-free for qualified use; taxable for non-qualified use.
Permanent vs. Temporary disability
Key Employee Disability policy
Medical Savings Account (MSA) & Health Savings Account (HSA)
Dividend options
18. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.
Non-forfeiture options for WL policy
Impairment (Exclusion) rider
Indemnify
Insurance contract characteristics (2 of 2)
19. 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.
Business Overhead Expense (BOE) Disability policy
Reinstatement provision
Annuity Classifications (5 of 5): # of lives
Medicare
20. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.
Supplemental Major Medical plan
Misstatement of Age/Sex provision
Modified Endowment Contract (MEC)
Medicare Part A (aka Hospital Insurance or HI)
21. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.
Cash value
Dividends
Tax implications of an Estate
Reinstatement provision
22. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.
Medicare Part D
Business Continuation (aka Buy-Sell) policy
Departments of an Insurer
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
23. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Employee Retirement Income Security Act (ERISA)
Survivorship (aka "Last to die") policy
Accidental Death & Dismemberment (AD&D) Life policy
CA Work. Comp. Statutes
24. Both Contributory & Non-contributory Group policies are deductible to employer (not employee) but benefits are taxable. Individual policy premium is NOT deductible but benefit is received tax-free.
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Grace Period provision
Medicare
Tax implications of Disability policy
25. Same as WL but w/ adjustable death benefit (& corresponding premium) & over-fund option but w/ annually renewable term (ART).
Permanent vs. Temporary disability
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Small Employer Medical Expense plan
26. Provides % of monthly income benefit if Insured becomes disabled due to illness or accident.
Medicare Part D
Disability Income policy
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Settlement options for Life policy (2 of 2)
27. Potential circumstance that could cause a loss; measured in dollars.
Automatic Premium Loan (APL) provision
Employer-Administered plan
Blue Cross/Blue Shield
Loss exposure
28. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.
Cost of Living Adjustment (COLA) Life rider
Trusts
Medi-Cal Share Cost plan
Common Life Exclusions
29. A company providing lump sum buyout (50-90% of total) of Life policy; becomes owner & beneficiary & assumes premium payments; usually terminally ill viator.
Revocable vs. Irrevocable beneficiary
Family Income policy
Viatical Settlement Provider (VSP)
Employer Liability
30. Same as Comprehensive Major Medical but w/ integrated deductible; much more expensive.
Basic Medical plan
Supplemental Major Medical plan
Medicare
Equity Indexed annuity
31. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.
Single Pay Whole Life policy
7 Pay Test
Term Life policy
Return of Cash Value rider
32. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.
Comprehensive Major Medical plan
Entire Contract provision
Non-forfeiture options for WL policy
Common Life Exclusions
33. Policy provisions must conform to state regulations where policy is sold.
Variable Life policy (1 of 2)
Entire Contract provision
Conformity with State Statute provision
Joint Life (aka "First to die") policy
34. Coverage for catastrophic loss w/ high limits - front end deductible; co-insurance (80/20%); blanket coverage; stop loss max.
Major Medical plan
Underwriting risk categories
Free Look provision
Incontestability clause/provision
35. Info already known; Info that should have been known; Waived info; Irrelevant info.
Waiver of Premium provision
Concealment exceptions
Common Accident provision
Concealment
36. Available for any reason up to full cash value @ fixed (max 8%) OR variable interest rate; loan $ + interest deducted from benefit @ death.
Policy loans
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Exclusions to Work. Comp.
Palliative vs. Curative care
37. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.
Family policy
Peril vs. Hazard
Flexible Spending Account (FSA)
Proof of Loss provision
38. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.
Insuring clause/provision (aka Insuring Agreement)
Accidental Death (aka Multiple Indemnity) rider
Dental Plan
Automatic Premium Loan (APL) provision
39. Monthly; Quarterly; Semi-annually; Annually (cheapest due to less admin cost).
Medicare
IRS Penalties for Annuities
Premium modes
Cost of Living Adjustment (COLA) Disability rider
40. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.
Waiver of Premium (Waiver of Cost of Insurance) rider
Types of Accident & Health insurance
IRS Penalties for Annuities
Medicare Part C (aka Medicare Advantage)
41. 'The inability to perform ANY gainful occupation'.
Total disability (any-occupational definition)
Employer-Administered plan
Indemnify
Medical cost containment (aka Managed care)
42. Covers disabilities occurring ONLY "off" job; benefits do not overlap work. comp. (i.e. Group plan).
Common Disaster (Simultaneous Death Act) clause/provision
Non-Occupational Disability policy
Retrocession
Types of Accident & Health insurance
43. 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.
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Equity Indexed annuity
Types of Accident & Health insurance
Suicide clause/provision
44. Same as WL but cash value increases @ current interest rates (not set); premium can start low or high & may change.
Civil Rights/Pregnancy Discrimination Act
Variable Universal Life policy
Current Assumption (aka Interest-Sensitive) Whole Life policy
Applicant Representations vs. Warranties
45. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.
Age Discrimination in Employment Act (ADEA)
Medicare
Life insurance policy
Automatic Premium Loan (APL) provision
46. A&H - A&S - Sickness only; Medical; Disability; Accident only; Travel accident; LTC; Medicare supplement; AD&D; Dental/Vision/Prescription; Limited.
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Types of Accident & Health insurance
Exclusions for Major Medical plan
Key Employee Disability policy
47. Provides benefit during Social Security "black-out" period - up to 1 yr.
1035 Exchange
Recurrent disability clause/provision
Trusts
Social Security Benefit (Supplement) rider
48. Reappearance of disability w/in 6 mth. period after "recovery" from same disability is considered recurrence - not new disability.
Departments of an Insurer
Recurrent disability clause/provision
Small Employer Medical Expense plan
Tax implications of an Annuity (1 of 2)
49. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.
Types of Insurers (by ownership)
Estoppel
Tax implications of Death Benefit & Cash Value
Adjustable Whole Life policy
50. Domestic - within home state; Foreign - outside home state; Alien - outside home country.
Binding receipt (aka Temporary Insurance Agreement)
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Blue Cross/Blue Shield
Types of Insurers (by domicile)