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Test your basic knowledge |
CA Life Agent Exam
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Study First
Subject
:
certifications
Instructions:
Answer 50 questions in 15 minutes.
If you are not ready to take this test, you can
study here
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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. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.
Waiver of Premium provision
7 Pay Test
Peril vs. Hazard
Health Insurance Portability and Accountability Act (HIPAA)
2. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Experience vs. Community rating in Group Health plan
Market Value Adjusted (aka Modified Guaranteed) annuity
Partial disability rider
Group Disability plan
3. 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)
Types of Renewability provisions
Tax implications of medical plans
Long Term Care (LTC) policy
4. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.
Common Life Exclusions
Presumptive disability
Rehabilitation rider
Credit Life policy
5. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.
Penalties for violating AIDS/HIV privacy laws
Cross Purchase Plan
Payment of Premium provision
Juvenile Life (aka Jumping Juvenile) policy
6. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.
Employer Liability
Misstatement of Age/Sex provision
Medicare Part C (aka Medicare Advantage)
Key Employee Disability policy
7. Upon death - death benefit is paid + the aggregate of cash value accumulated to date; add-on to WL policy ONLY.
Point of Service plan
Concealment exceptions
Return of Cash Value rider
Annuity Classifications (1 of 5): How premium is paid
8. 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.
Payment of Premium provision
Limited Pay Whole Life policy
Tax implications of medical plans
Medicare
9. Representation - oral or written statement made to best of knowledge or belief; Warranty - statement guaranteed/presumed/understood to be true.
Settlement options for Life policy (2 of 2)
Applicant Representations vs. Warranties
Suicide clause/provision
Modified Endowment Contract (MEC)
10. 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;
Payment of Premium provision
Transplant/Cosmetic Surgery rider
Preferred Provider Organization (PPO)
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
11. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.
Fraud
Loss of Earnings Test
Workers' Compensation insurance
Revocable vs. Irrevocable beneficiary
12. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.
Palliative vs. Curative care
Rescission
Blue Cross/Blue Shield
Estoppel
13. 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.
Beneficiary provisions
Comprehensive Major Medical plan
Employee Retirement Income Security Act (ERISA)
Whole (aka Permanent or Straight) Life policy
14. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.
Primary Insurance Amount (PIA)
Common Accident provision
Dividends
Free Look provision
15. Basic Medical; Major Medical; Comprehensive Major Medical
Mortality vs. Morbidity tables
Types of Medical Plans
Reinstatement provision
Automatic Premium Loan (APL) provision
16. Type of partial disability rider - which pays fluctuating % of lost income w/out time limit.
24 Hour Coverage (CA)
Residual disability rider
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Trial Application (aka Request for Offer)
17. Must be delivered in person or by certified - registered or 1st-class mail w/ signature - unless waived by Insurance Commissioner.
Automatic Premium Loan (APL) provision
Types of Accident & Health insurance
Policy delivery
Employer-Administered plan
18. If Insured & primary beneficiary die due to same act (w/in 14 days) - primary assumed 1st to die & contingent beneficiary paid death benefit.
Common Disaster (Simultaneous Death Act) clause/provision
Annuity Classifications (2 of 5): When benefits begin
Estoppel
Dividend options
19. Written policy terms supersede oral statements made prior to policy issue.
Parole Pardon Rule
Change of Occupation provision
Reinstatement provision
Impairment (Exclusion) rider
20. A&H - A&S - Sickness only; Medical; Disability; Accident only; Travel accident; LTC; Medicare supplement; AD&D; Dental/Vision/Prescription; Limited.
Types of Insurers (by authorization)
Errors & Omissions (E&O)
Rate (as defined by CIC)
Types of Accident & Health insurance
21. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.
Cross Purchase Plan
Tax implications of an Annuity (1 of 2)
Insurer (as defined by CIC)
Proof of Loss provision
22. Covers disabilities occurring ONLY "off" job; benefits do not overlap work. comp. (i.e. Group plan).
Tax implications of medical plans
Family or Dependents rider
Comprehensive Major Medical plan
Non-Occupational Disability policy
23. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.
Transplant/Cosmetic Surgery rider
Dividends
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Rate (as defined by CIC)
24. Unilateral - Insurer provides contract; Adhesion - parties must adhere to terms; Aleatory - benefits may not inure equally.
Insurance contract characteristics (1 of 2)
Annuity Classifications (2 of 5): When benefits begin
Health Insurance Portability and Accountability Act (HIPAA)
Blue Cross/Blue Shield
25. Provides hospital insurance automatically @ age 65 (if FICA qualified) @ no fee but may have deductible & co-pay.
Medicare Part A (aka Hospital Insurance or HI)
Medicare
Comprehensive Major Medical plan
Life insurance policy
26. 'The inability to perform ANY reasonable occupation based on education - training or experience'.
Business Continuation (aka Buy-Sell) Disability policy
Total disability (more restrictive definition)
Underwriting risk categories
Endowment Life policy
27. Prepaid med. benefits for "subscribers" @ approved facilities; many non-profit; Blue Cross - Hospital stays; Blue Shield - M.D. costs.
Blue Cross/Blue Shield
Elimination (aka Waiting) period
Flexible Spending Account (FSA)
Grace Period provision
28. Same as WL but w/ Decreasing Term rider; upon death - pays monthly income for REMAINING term AFTER which pays full death benefit.
Group Disability plan
Family Income policy
Types of reinsurance
Misstatement of Age/Sex provision
29. Death benefit determined by Insured's financial goals & needs (minus assets).
Risk management
1035 Exchange
Needs approach (most common)
Tax implications of medical plans
30. Disability policy rider covering "the inability to perform some - but not all of your duties"; pays max. 50% of disability benefit for up to 6 mths.
Partial disability rider
Rehabilitation rider
Variable Life policy (1 of 2)
Types of Insurers (by domicile)
31. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Types of Renewability provisions
Experience vs. Community rating in Group Health plan
Valid life insurance contracts must identify...
32. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.
Dividend options
Business Overhead Expense (BOE) Disability policy
Dental Plan
Key Employee Disability policy
33. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.
Insurability Type Conditional receipt
Recurrent disability clause/provision
Current Assumption (aka Interest-Sensitive) Whole Life policy
Annuity Classifications (2 of 5): When benefits begin
34. 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.
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Convertibility provision
Health Maintenance Organization (HMO)
Accidental Death & Dismemberment (AD&D) Life policy
35. 1: Tax-free lump sum; 2: Monthly pay-outs for fixed time; 3: Fixed monthly payments until depleted.
Palliative vs. Curative care
Key Employee Disability policy
Settlement options for Life policy (1 of 2)
Juvenile Life (aka Jumping Juvenile) policy
36. Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling - stock investment).
Pure risk vs. Speculative risk
Cost of Living Adjustment (COLA) Disability rider
Modified Premium Whole Life policy
Concealment exceptions
37. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.
Types of Accident & Health (A&H) providers
Medicare Supplement or Medigap policy
Limited Pay Whole Life policy
Medicare Part D
38. If Insured changes to: more hazardous job - benefits reduced; less hazardous job - premiums reduce.
Penalties for violating AIDS/HIV privacy laws
Change of Occupation provision
Health Maintenance Organization (HMO)
Non-forfeiture options for WL policy
39. Death benefit is NOT taxable. Cash value grows tax-deferred but cost basis (base premium) is not taxable - only interest is.
Underwriting risk categories
Credit Life policy
Tax implications of Death Benefit & Cash Value
Waiver of Premium (Waiver of Cost of Insurance) rider
40. Process which prevents claim denial as a result of false statement or promise (made by Insurer) - which was relied upon by Insured.
Insurable interest
Levels of Long Term Care provided
Presumptive disability
Estoppel
41. Provides % of monthly income benefit if Insured becomes disabled due to illness or accident.
Employer Liability
Peril vs. Hazard
Basic Medical plan
Disability Income policy
42. Same as WL but w/ Level Term rider; upon death - pays monthly income for FULL term AFTER which pays full death benefit.
Policy loans
Family Maintenance policy
Residual disability rider
Equity Index Whole Life policy
43. Facultative - case by case agreements; Automatic/Treaty - automatic acceptance of risk percentage per previous agreement.
Types of reinsurance
Tax implications of an Estate
Policy delivery
Free Look provision
44. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.
Presumptive disability
Conformity with State Statute provision
Dividend options
Trial Application (aka Request for Offer)
45. A lapsed policy may be reinstated if not longer than 3-5 yrs. - & proof of insurability re-established - & back premiums + interest paid.
Point of Service plan
Types of Insurers (miscellaneous)
COBRA Time Limitations
Reinstatement provision
46. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.
Total disability (more restrictive definition)
Policy delivery
Medicare Part A & B "Gaps"
Life insurance policy
47. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.
CA Work. Comp. Statutes
Family Income policy
Types of Insurers (by ownership)
Approval Type Conditional receipt
48. Federal law which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.
Proof of Loss provision
Errors & Omissions (E&O)
Age Discrimination in Employment Act (ADEA)
Annuity
49. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.
Variable Life policy (2 of 2)
Accidental Death (aka Multiple Indemnity) rider
Single Pay Whole Life policy
Renewability provision
50. An unintentional mistake committed by an insurance representative; may be covered by E&O insurance.
Cost of Living Adjustment (COLA) Life rider
Family policy
Beneficiary provisions
Errors & Omissions (E&O)
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