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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. Death benefit determined by Insured's financial goals & needs (minus assets).






2. Facultative - case by case agreements; Automatic/Treaty - automatic acceptance of risk percentage per previous agreement.






3. 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.






4. 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.






5. 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.






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






7. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.






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






9. 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;






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






11. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.






12. Part A - Inpatient hospital deductibles vary on # of days; limited reserve days; finite benefit; 1st 3 pints blood; Part B - 20% co-payment.






13. 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.






14. Policy must be delivered w/ original (or copy of same) application attached.






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






16. Same as Term Life but provides living benefit (endowment) to policy owner if Insured survives entire term.






17. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.






18. Federal law which prohibits companies w/ 15+ employees from decreasing coverage benefits for women affected by pregnancy or childbirth.






19. Tendency of poorer risks to seek insurance.






20. 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.






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






22. Fixed premium w/ guaranteed min. death benefit that may increase due to higher than expected investment returns.






23. Expands individual WL policy to include Term Life for dependents (spouse - children - etc.).






24. Refund of 50-80% of premium (minus claims paid) every 5-10 yrs. OR age 65; expensive!






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






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






27. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.






28. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.






29. Death benefit is NOT taxable. Cash value grows tax-deferred but cost basis (base premium) is not taxable - only interest is.






30. Federal law which allows health coverage portability when changing jobs - so long as previous coverage was in effect 63+ days; allows some tax deductibility for LTC.






31. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.






32. Non-qualified Annuity - Non-deductible contributions & tax-deferred growth. At pay-out - tax-free principal but taxable growth.






33. Funding mechanism whereby employer & employee share cost of premium. Upon death - benefit is shared between employer & beneficiary.






34. Private sector (Commercial) - provides LA&H - P&C - & LTC; Public sector (Gov't) - provides flood - work. comp. - Medicare/Medicaid - Group Life (SGLI/FEGLI).






35. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.






36. Type of partial disability rider - which pays fluctuating % of lost income w/out time limit.






37. 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.






38. 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.






39. Allows for Term policy renewal @ higher premium w/out medical exam; guarantees insurability; based on actual/attained age.






40. Time extension of benefits based on "qualifying" event. 18 mth. extension if laid off or fired; 36 mth. extension if death - divorce or child leaves home.






41. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.






42. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).






43. Same as WL but w/ Level Term rider; upon death - pays monthly income for FULL term AFTER which pays full death benefit.






44. Representation - oral or written statement made to best of knowledge or belief; Warranty - statement guaranteed/presumed/understood to be true.






45. War - 2 types; Suicide (1st 2 yrs.); Aviation (non-commercial); Hazardous hobbies; Criminal acts; Alcohol/Drug influenced.






46. Receipt whereby coverage incepts immediately upon submission of full consideration - unless declined & premium refunded.






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






48. Intentional OR unintentional failure to disclose material underwriting facts that should have been disclosed; grounds for policy rescission.






49. Same as WL but w/ Decreasing Term rider; upon death - pays monthly income for REMAINING term AFTER which pays full death benefit.






50. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.







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