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. No deductible coverage for: daily room/board; ancillary costs; surgeon &/or physician expense (for added premium).






2. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.






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






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






5. Provides supplemental coverage for physician/surgeon fees if enrolled (during enrollment period ONLY) & pay monthly premium w/ deductible and co-insurance.






6. Primary - if 2 or more - equally shared; Contingent (Secondary) - only if primary dead; Tertiary - only if both primary & secondary dead. If none listed - goes to estate.






7. Domestic - within home state; Foreign - outside home state; Alien - outside home country.






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






9. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.






10. Dependent children are covered until 19 or 23 (full-time student only) or until self-sufficient (if handicapped).






11. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.






12. If Insured changes to: more hazardous job - benefits reduced; less hazardous job - premiums reduce.






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






14. Written policy terms supersede oral statements made prior to policy issue.






15. WL policy covering 2 or more Insureds but ONLY payable upon death of LAST Insured - generally low premium but high death benefit.






16. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.






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. 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.






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






20. Same as WL but premium low for set # yrs. - THEN premiums vary (+ or -) based on Insurer's investment returns - w/ Gmax.






21. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.






22. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.






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






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






25. Unintentional - up to $1 -000 + legal $; Intentional - $1 -000-5 -000 + legal $; If harmful - misdemeanor + up to 1 yr. prison + up to $10 -000.






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






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






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






29. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).






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






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






32. 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.






33. Excludes coverage for suicide during 1st 2 yrs. ONLY but - if it does - all premiums must be returned to beneficiary.






34. Allows policy owner to w/draw set % of death benefit upon verification of terminal illness w/ expectancy 12-24 mths.; generally tax-free.






35. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.






36. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.






37. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.






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






39. Allows for use of HMO/PPO or other private carrier to provide expanded benefits @ additional premium & if enrolled in BOTH Parts A & B.






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






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






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






43. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.






44. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.






45. An unintentional mistake committed by an insurance representative; may be covered by E&O insurance.






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






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






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






49. Prepaid med. benefits for "subscribers" @ approved facilities; many non-profit; Blue Cross - Hospital stays; Blue Shield - M.D. costs.






50. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.