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Test your basic knowledge |
CA Life Agent Exam
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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. 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.
Legal Action provision
Pure risk vs. Speculative risk
Total disability (any-occupational definition)
Indemnify
2. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.
Return of Premium rider
Indemnify
Parole Pardon Rule
Split Dollar Plan
3. Fixed premium w/ guaranteed min. death benefit that may increase due to higher than expected investment returns.
Common Disaster (Simultaneous Death Act) clause/provision
Variable Life policy (2 of 2)
Employer-Administered plan
Payment of Premium provision
4. 'The inability to perform ANY reasonable occupation based on education - training or experience'.
Return of Cash Value rider
Types of reinsurance
Partial disability rider
Total disability (more restrictive definition)
5. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.
Insurability Type Conditional receipt
Presumptive disability
Tax implications of Dividends - Loans & Interest
Rescission
6. Fraternal - non-profit - members only; Reciprocal - unincorp'd org. - members insure each other; Lloyd's Assoc. - groups sharing risks; Surplus lines - special market risks.
Types of Insurers (miscellaneous)
Rehabilitation rider
Limited Pay Whole Life policy
Insurance contract characteristics (1 of 2)
7. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.
Variable Life policy (2 of 2)
Parole Pardon Rule
Change of Occupation provision
Primary Insurance Amount (PIA)
8. Policy provisions must conform to state regulations where policy is sold.
Medicare
Conformity with State Statute provision
Types of Insurers (by sector)
Common Disability Exclusions
9. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.
Family or Dependents rider
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Phases of an annuity
Insurable interest
10. A lapsed policy may be reinstated if not longer than 3-5 yrs. - & proof of insurability re-established - & back premiums + interest paid.
Annuity Classifications (1 of 5): How premium is paid
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Tax implications of an Estate
Reinstatement provision
11. Permanent - not recoverable (spinal cord injury); Temporary - recoverable (temp. illness/injury - broken limb).
Risk management
Permanent vs. Temporary disability
Trial Application (aka Request for Offer)
Preferred Provider Organization (PPO)
12. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.
Types of Agency Authority
Point of Service plan
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Single Pay Whole Life policy
13. 'The inability to perform your OWN normal occupation or daily duties'.
Medical cost containment (aka Managed care)
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Total disability (as commonly defined)
Non-forfeiture options for WL policy
14. 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.
Limited Pay Whole Life policy
Spendthrift provision
Types of Renewability provisions
Market Value Adjusted (aka Modified Guaranteed) annuity
15. 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.
Employer Liability
Dread Disease policy
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Tax implications of an Annuity (1 of 2)
16. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).
Time Limit on Certain Defenses provision
Common Disability Exclusions
Employer-Administered plan
Modified Endowment Contract (MEC)
17. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.
Group Disability plan
IRS Penalties for Annuities
Estoppel
Elimination (aka Waiting) period
18. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.
Types of Agency Authority
CA Work. Comp. Statutes
Parole Pardon Rule
Tax implications of Death Benefit & Cash Value
19. 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.
COBRA Time Limitations
Premium modes
Family Income policy
Tax implications of medical plans
20. Agreement - Offer & acceptance; Consideration - application + premium; Legal capacity - licensed &/or competent; Legal purpose - public good.
Family or Dependents rider
Non-forfeiture options for WL policy
Endowment Life policy
Elements to contract
21. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.
Proof of Loss provision
Health Maintenance Organization (HMO)
Concealment exceptions
Dental Plan
22. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.
Premium modes
Types of Accident & Health (A&H) providers
Revocable vs. Irrevocable beneficiary
Medi-Cal Share Cost plan
23. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).
Cash value
Types of Insurers (by authorization)
Modified Endowment Contract (MEC)
Equity Index Whole Life policy
24. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).
Return of Premium rider
Cost of Living Adjustment (COLA) Life rider
Valid life insurance contracts must identify...
Medicaid/Medi-Cal
25. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.
Disability Income policy
Proof of Loss provision
Free Look provision
Renewability provision
26. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.
Blue Cross/Blue Shield
Phases of an annuity
Tax implications of an Annuity (1 of 2)
Fraud
27. Available for any reason up to full cash value @ fixed (max 8%) OR variable interest rate; loan $ + interest deducted from benefit @ death.
Total disability (more restrictive definition)
Policy loans
Premium modes
Renewability provision
28. 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
Rescission
Medicare Part C (aka Medicare Advantage)
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
29. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.
Modified Endowment Contract (MEC)
Insurable interest
Fraud
Annuity Classifications (1 of 5): How premium is paid
30. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)
Annuity Classifications (1 of 5): How premium is paid
Loss of Earnings Test
Proof of Loss provision
Business Overhead Expense (BOE) Disability policy
31. Unilateral - Insurer provides contract; Adhesion - parties must adhere to terms; Aleatory - benefits may not inure equally.
Return of Premium rider
Return of Cash Value rider
Equity Index Whole Life policy
Insurance contract characteristics (1 of 2)
32. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.
Common Accident provision
Cost of Living Adjustment (COLA) Life rider
Graded Premium Whole Life policy
Credit Life policy
33. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.
Needs approach (most common)
Experience vs. Community rating in Group Health plan
Whole (aka Permanent or Straight) Life policy
Single Pay Whole Life policy
34. Same as WL but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Penalties for violating AIDS/HIV privacy laws
Permanent vs. Temporary disability
Variable Life policy (1 of 2)
Loss exposure
35. Combination of Basic Medical & Major Medical in one policy; Basic pays 1st - then Major Medical w/ corridor deductible.
Reinstatement provision
Departments of an Insurer
1035 Exchange
Comprehensive Major Medical plan
36. Physical - slippery floor; Moral - dishonest acts; Morale - carelessness or recklessness.
Doctrine of Comity
Policy loans
Types of hazards
Concealment
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.
Types of Insurers (by sector)
Preferred Provider Organization (PPO)
Tax implications of Disability policy
Flexible Spending Account (FSA)
38. The state in which the contract is accepted or delivered is the state that possesses regulatory jurisdiction over Group plan.
Doctrine of Comity
Experience vs. Community rating in Group Health plan
Parole Pardon Rule
Enhanced Ordinary (aka Extraordinary) Whole Life policy
39. PURELY employer-funded account to reimburse employees for qualified medical expenses not covered by group health plan.
Primary Insurance Amount (PIA)
Health Reimbursement Account (HRA)
Health Insurance Portability and Accountability Act (HIPAA)
Civil Rights/Pregnancy Discrimination Act
40. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.
Single Pay Whole Life policy
Reinsurance
Estoppel
Medical Savings Account (MSA) & Health Savings Account (HSA)
41. 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.
Annuity Classifications (5 of 5): # of lives
Accidental Death & Dismemberment (AD&D) Disability rider
Types of Insurers (by domicile)
Valid life insurance contracts must identify...
42. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.
CHAMPUS (aka TriCare)
Transplant/Cosmetic Surgery rider
Cross Purchase Plan
Medical cost containment (aka Managed care)
43. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.
Graded Premium Whole Life policy
Palliative vs. Curative care
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Non-Occupational Disability policy
44. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.
Health Reimbursement Account (HRA)
Modified Premium Whole Life policy
Variable Life policy (2 of 2)
Consolidated Omnibus Budget Reconciliation Act (COBRA)
45. 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.
CA Work. Comp. Statutes
Automatic Premium Loan (APL) provision
Viatical Settlement Provider (VSP)
Entire Contract provision
46. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.
Blue Cross/Blue Shield
Business Overhead Expense (BOE) Disability policy
Levels of Long Term Care provided
Life insurance policy
47. Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling - stock investment).
Total disability (as commonly defined)
Pure risk vs. Speculative risk
Elimination (aka Waiting) period
Free Look provision
48. Level - fixed death benefit - premium fixed until renewal; Decreasing - death benefit decreases over term - premium fixed until renewal; Increasing - death benefit increases over term - premium fixed until renewal.
Types of Insurers (by ownership)
Modified Premium Whole Life policy
Types of Term Life policies
Change of Occupation provision
49. Qualified Annuity - Tax-deductible contributions & tax-deferred growth but fully taxable w/drawals.
Tax implications of an Annuity (1 of 2)
Family policy
Plans A-L of Medical Supplement or Medigap
Variable Life policy (2 of 2)
50. Refund of 50-80% of premium (minus claims paid) every 5-10 yrs. OR age 65; expensive!
Return of Premium rider
Renewability provision
Medi-Cal Share Cost plan
Insurance contract characteristics (1 of 2)
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