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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. 'The inability to perform ANY gainful occupation'.
Palliative vs. Curative care
Total disability (any-occupational definition)
Return of Premium rider
Types of Accident & Health insurance
2. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.
Policy loans
Approval Type Conditional receipt
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Non-Occupational Disability policy
3. Federally-funded but state-run program for truly indigent individuals & families providing medical care at Federal clinic.
Law of Large Numbers
Medicaid/Medi-Cal
Peril vs. Hazard
Insurance contract characteristics (2 of 2)
4. Tendency of poorer risks to seek insurance.
Workers' Compensation insurance
Estoppel
Adverse selection
Whole (aka Permanent or Straight) Life policy
5. Provides professional services - rehabilitation - training/re-training & related costs to assist Insured in returning to work.
Settlement options for Life policy (1 of 2)
Types of Term Life policies
Rehabilitation rider
Business Overhead Expense (BOE) Disability policy
6. Intentional deception; grounds for rescission.
Types of Accident & Health insurance
Accidental Death (aka Multiple Indemnity) rider
Fraud
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
7. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.
Medicare Part A & B "Gaps"
Key Employee Disability policy
Tax implications of an Annuity (1 of 2)
Underwriting risk categories
8. No coverage for injuries while: 1: @ voluntary social event; 2: self-inflicted (intentional); 3: under alcohol/drug influence; 4: committing criminal act; 5: aggressor in workplace fight; 6: participating in athletic event (non-pro. athletes) 7: par
Types of Insurers (miscellaneous)
Exclusions to Work. Comp.
Fraud
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
9. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).
1035 Exchange
Settlement options for Life policy (1 of 2)
Types of Accident & Health (A&H) providers
Social Security Benefit (Supplement) rider
10. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.
Civil Rights/Pregnancy Discrimination Act
Annuity Classifications (1 of 5): How premium is paid
Medicare Supplement or Medigap policy
Enhanced Ordinary (aka Extraordinary) Whole Life policy
11. Coverage for catastrophic loss w/ high limits - front end deductible; co-insurance (80/20%); blanket coverage; stop loss max.
Comprehensive Major Medical plan
Major Medical plan
Common Disability Exclusions
Life insurance policy
12. Mandatory 100% employer-funded coverage for injuries/illnesses occurring "on" job; full-time employees only; exclusive remedy. Provides: 1: unlimited medical benefit; 2: survivor income replacement & funeral ($5 -000 max.); 3: disability benefit @ 66
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13. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.
Disability Income policy
Annuity surrender charges
Joint Life (aka "First to die") policy
Medicare Supplement or Medigap policy
14. Policy must be delivered w/ original (or copy of same) application attached.
Renewability provision
Types of Accident & Health insurance
Entire Contract provision
Employer-Administered plan
15. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Cash value
Return of Premium rider
Free Look provision
Accidental Death & Dismemberment (AD&D) Disability rider
16. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.
Non-forfeiture options for WL policy
Elimination (aka Waiting) period
Needs approach (most common)
Long Term Care (LTC) policy
17. Non-qualified Annuity - Non-deductible contributions & tax-deferred growth. At pay-out - tax-free principal but taxable growth.
Tax implications of an Annuity (1 of 2)
Presumptive disability
Total disability (more restrictive definition)
Relation of Earnings to Insurance provision
18. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.
Common Life Exclusions
Annuity Classifications (3 of 5): Source of income
Payment of Premium provision
Palliative vs. Curative care
19. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Market Value Adjusted (aka Modified Guaranteed) annuity
Trusts
Equity Index Whole Life policy
Accidental Death & Dismemberment (AD&D) Life policy
20. Policy owner must notify Insurer of loss either in writing - in person or by phone w/in 20 days.
Waiver of Premium (Waiver of Cost of Insurance) rider
Notice of Claim provision
Civil Rights/Pregnancy Discrimination Act
Total disability (as commonly defined)
21. 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.
Tax implications of Disability policy
Insurance contract characteristics (1 of 2)
Viatical Settlement Provider (VSP)
Return of Premium rider
22. Beneficiary has right to leave death benefits / Insurer to protect $ from creditors; interest (taxable) paid on retained funds.
Life insurance policy
Earned vs. Unearned premium
Types of Insurers (miscellaneous)
Spendthrift provision
23. PURELY employer-funded account to reimburse employees for qualified medical expenses not covered by group health plan.
Health Reimbursement Account (HRA)
Binding receipt (aka Temporary Insurance Agreement)
Law of Large Numbers
Medicare Part B (aka Supplemental Medical Insurance or SMI)
24. WL policy covering 2 or more Insureds but ONLY payable upon death of LAST Insured - generally low premium but high death benefit.
Non-Occupational Disability policy
Accidental Death & Dismemberment (AD&D) Life policy
Family policy
Survivorship (aka "Last to die") policy
25. Waives premium upon disability of Insured until return to work; disability must persist for 90 days or longer; 1st 90 day premiums refunded after 90 days.
Waiver of Premium provision
Fraud
Health Reimbursement Account (HRA)
Flexible Spending Account (FSA)
26. Mathematical law stating the larger # of occurrences - the more predictable the losses; used to calculate premiums.
CA Work. Comp. Statutes
Tax implications of an Annuity (1 of 2)
Law of Large Numbers
Presumptive disability
27. An attempt to contain costs by employing various strategies - including wellness programs - preventative testing - outpatient & alternative procedures.
Palliative vs. Curative care
Medicare Part D
Medical cost containment (aka Managed care)
Payment of Premium provision
28. Provides % of monthly income benefit if Insured becomes disabled due to illness or accident.
Annuity surrender charges
Disability Income policy
Non-forfeiture options for WL policy
Rescission
29. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.
Whole (aka Permanent or Straight) Life policy
Annuity
Beneficiary provisions
Mortality vs. Morbidity tables
30. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).
Reinstatement provision
CA Work. Comp. Statutes
Insurable interest
Fraud
31. Refund of 50-80% of premium (minus claims paid) every 5-10 yrs. OR age 65; expensive!
Types of Medical Plans
Return of Premium rider
Occupational Disability policy
Long Term Care (LTC) policy
32. Death benefit is NOT taxable. Cash value grows tax-deferred but cost basis (base premium) is not taxable - only interest is.
Errors & Omissions (E&O)
Grace Period provision
Types of Insurers (by authorization)
Tax implications of Death Benefit & Cash Value
33. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.
Adverse selection
Total disability (any-occupational definition)
Return of Cash Value rider
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
34. 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)
CHAMPUS (aka TriCare)
Pure risk vs. Speculative risk
Medical cost containment (aka Managed care)
35. Part A - Inpatient hospital deductibles vary on # of days; limited reserve days; finite benefit; 1st 3 pints blood; Part B - 20% co-payment.
Supplemental Major Medical plan
Medicare Part A & B "Gaps"
Reinstatement provision
Civil Rights/Pregnancy Discrimination Act
36. Potential circumstance that could cause a loss; measured in dollars.
Cost of Living Adjustment (COLA) Life rider
Health Maintenance Organization (HMO)
Loss exposure
Limited Pay Whole Life policy
37. Receipt whereby coverage incepts immediately upon submission of full consideration - unless declined & premium refunded.
Total disability (as commonly defined)
Underwriting risk categories
Proof of Loss provision
Binding receipt (aka Temporary Insurance Agreement)
38. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.
Guaranteed Insurability Life rider
Single Pay Whole Life policy
Penalties for violating AIDS/HIV privacy laws
24 Hour Coverage (CA)
39. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.
Incontestability clause/provision
Rehabilitation rider
CHAMPUS (aka TriCare)
Business Overhead Expense (BOE) Disability policy
40. Physical - slippery floor; Moral - dishonest acts; Morale - carelessness or recklessness.
Types of hazards
Cost of Living Adjustment (COLA) Life rider
Tax implications of an Annuity (1 of 2)
Cross Purchase Plan
41. Domestic - within home state; Foreign - outside home state; Alien - outside home country.
Blue Cross/Blue Shield
Types of Insurers (by domicile)
Fraud
Revocable vs. Irrevocable beneficiary
42. 'The inability to perform ANY reasonable occupation based on education - training or experience'.
Trial Application (aka Request for Offer)
Total disability (more restrictive definition)
Preferred Provider Organization (PPO)
Considerations in replacing Health insurance
43. 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;
Flexible Spending Account (FSA)
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Misstatement of Age/Sex provision
Medicare Part A & B "Gaps"
44. Responsible adult trustee designated to manage death benefits for minor child beneficiary until adulthood.
Tax implications of an Annuity (1 of 2)
Cost of Living Adjustment (COLA) Life rider
Trusts
Tax implications of Death Benefit & Cash Value
45. Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling - stock investment).
Approval Type Conditional receipt
Limited Pay Whole Life policy
Convertibility provision
Pure risk vs. Speculative risk
46. Federal law to protect Federal employees' (& their beneficiaries') pension - group insurance - & welfare benefits.
Payment of Premium provision
Employee Retirement Income Security Act (ERISA)
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Estoppel
47. No-charge annuity w/drawals allowed up to 10% of total - THEN penalized on sliding scale based on # policy yrs.; conditionally waived.
Basic Medical plan
Trusts
Whole (aka Permanent or Straight) Life policy
Annuity surrender charges
48. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.
Dividends
Medicare Part C (aka Medicare Advantage)
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
49. Upon death - death benefit is paid + the aggregate of cash value accumulated to date; add-on to WL policy ONLY.
Permanent vs. Temporary disability
Return of Cash Value rider
Viatical Settlement Provider (VSP)
Employee Retirement Income Security Act (ERISA)
50. Guaranteed min. interest rate on cash value buildup but possible higher rate if short-term investment returns higher than expected.
Doctrine of Comity
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Health Maintenance Organization (HMO)
Accidental Death & Dismemberment (AD&D) Disability rider
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