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Test your basic knowledge |
CA Life Agent Exam
Start Test
Study First
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. Same as WL but w/ adjustable death benefit (& corresponding premium) & over-fund option but w/ annually renewable term (ART).
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Notice of Claim provision
Entire Contract provision
Types of reinsurance
2. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Total disability (as commonly defined)
Key Employee policy
Endowment Life policy
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
3. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.
Palliative vs. Curative care
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Annuity Classifications (1 of 5): How premium is paid
CHAMPUS (aka TriCare)
4. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.
Beneficiary provisions
Long Term Care (LTC) policy
Medicaid/Medi-Cal
Annuity Classifications (2 of 5): When benefits begin
5. Responsible adult trustee designated to manage death benefits for minor child beneficiary until adulthood.
Trusts
Dependent coverage
Employer Liability
Incontestability clause/provision
6. 4: Funds retained by Insurer until w/drawn - interest ONLY paid monthly (taxable); 5: Paid-up immediate annuity.
Concealment exceptions
Transplant/Cosmetic Surgery rider
Comprehensive Major Medical plan
Settlement options for Life policy (2 of 2)
7. Compensates business for loss due to disability of key employee; premiums not deductible but benefits tax-free.
Policy loans
Key Employee Disability policy
Primary Insurance Amount (PIA)
Medicare Part A (aka Hospital Insurance or HI)
8. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.
Rehabilitation rider
Convertibility provision
Health Insurance Portability and Accountability Act (HIPAA)
Medi-Cal Share Cost plan
9. Intentional deception; grounds for rescission.
Single Pay Whole Life policy
Types of Agency Authority
Fraud
Current Assumption (aka Interest-Sensitive) Whole Life policy
10. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.
Proof of Loss provision
Types of Insurers (by authorization)
Viatical Settlement Provider (VSP)
Point of Service plan
11. Federal law which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.
Conformity with State Statute provision
Joint Life (aka "First to die") policy
Dread Disease policy
Age Discrimination in Employment Act (ADEA)
12. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.
Annuity Classifications (2 of 5): When benefits begin
7 Pay Test
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Policy loans
13. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.
Total disability (any-occupational definition)
Types of Accident & Health (A&H) providers
Premium modes
Modified Premium Whole Life policy
14. Premiums determined by target cash values or death benefit; partial cash value w/drawals allowed; transparent policy w/ unbundled premium.
Term Life policy
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Limited Pay Whole Life policy
Binding receipt (aka Temporary Insurance Agreement)
15. Same as Universal Life but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Variable Universal Life policy
Law of Large Numbers
Medicare
Return of Premium rider
16. Upon death - death benefit is paid + the aggregate of premiums paid to date; add-on to Term policy ONLY.
Return of Premium rider
Insurance contract characteristics (2 of 2)
Accidental Death & Dismemberment (AD&D) Disability rider
Claim Form (aka Proof of Loss Form) provision
17. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.
Phases of an annuity
7 Pay Test
Key Employee Disability policy
Valid life insurance contracts must identify...
18. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.
Common Disaster (Simultaneous Death Act) clause/provision
Exclusions to Work. Comp.
Misstatement of Age/Sex provision
Law of Large Numbers
19. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.
Premium modes
Annuity Classifications (5 of 5): # of lives
Modified Premium Whole Life policy
Tax implications of Dividends - Loans & Interest
20. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.
Grace Period provision
Tax implications of Disability policy
Human Life Value approach
Modified Premium Whole Life policy
21. Process whereby a reinsurer reinsures w/ another reinsurer.
Whole (aka Permanent or Straight) Life policy
Exclusions to Work. Comp.
Point of Service plan
Retrocession
22. WL policy covering 2 or more Insureds but ONLY payable upon death of LAST Insured - generally low premium but high death benefit.
Settlement options for Life policy (1 of 2)
Survivorship (aka "Last to die") policy
Variable Life policy (2 of 2)
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
23. Covers disabilities occurring ONLY "off" job; benefits do not overlap work. comp. (i.e. Group plan).
Policy loans
Non-Occupational Disability policy
Concealment
Renewability provision
24. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.
Types of Agency Authority
7 Pay Test
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Medical cost containment (aka Managed care)
25. Policy must be delivered w/ original (or copy of same) application attached.
Tax implications of Death Benefit & Cash Value
Types of Medical Plans
Entire Contract provision
Variable Life policy (1 of 2)
26. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.
AIDS/HIV discrimination
Insuring clause/provision (aka Insuring Agreement)
Single Pay Whole Life policy
Dependent coverage
27. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.
Reinstatement provision
Joint Life (aka "First to die") policy
Insurer (as defined by CIC)
Non-forfeiture options for WL policy
28. Same as WL but premium low for 1st 5 yrs. - THEN has annual premium increases for set # yrs. - THEN level premium.
Family policy
Indeterminate Premium Whole Life policy
Tax implications of medical plans
Graded Premium Whole Life policy
29. 'The inability to perform ANY gainful occupation'.
Total disability (any-occupational definition)
Settlement options for Life policy (1 of 2)
Common Disability Exclusions
Medical cost containment (aka Managed care)
30. Must be delivered in person or by certified - registered or 1st-class mail w/ signature - unless waived by Insurance Commissioner.
Suicide clause/provision
Workers' Compensation insurance
Policy delivery
Rate (as defined by CIC)
31. 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.
Medical cost containment (aka Managed care)
Return of Cash Value rider
Types of Medical Plans
Partial disability rider
32. Same as WL but can be "paid-up" early by paying larger premium for shorter payment period (i.e. 10 Pay Life - 20 Pay Life).
Medicare Part D
Common Disability Exclusions
Conformity with State Statute provision
Limited Pay Whole Life policy
33. 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.
Factors that determine premium
Reinsurance
Waiver of Premium provision
1035 Exchange
34. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.
Equity Index Whole Life policy
Fraud
Comprehensive Major Medical plan
Insurable interest
35. Federally-funded but state-run program for truly indigent individuals & families providing medical care at Federal clinic.
Medicaid/Medi-Cal
Variable Life policy (2 of 2)
Trial Application (aka Request for Offer)
Reinstatement provision
36. 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;
Time Limit on Certain Defenses provision
Incontestability clause/provision
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Enhanced Ordinary (aka Extraordinary) Whole Life policy
37. A&H - A&S - Sickness only; Medical; Disability; Accident only; Travel accident; LTC; Medicare supplement; AD&D; Dental/Vision/Prescription; Limited.
Types of Accident & Health insurance
Permanent vs. Temporary disability
Variable Universal Life policy
Reinstatement provision
38. Process which prevents claim denial as a result of false statement or promise (made by Insurer) - which was relied upon by Insured.
Human Life Value approach
Settlement options for Life policy (2 of 2)
Estoppel
Tax implications of Death Benefit & Cash Value
39. Treating or mitigating loss exposures through 1: avoidance; 2: retention (deductibles); 3: sharing; 4: reduction; or 5: transfer.
CA Work. Comp. Statutes
Risk management
Legal Action provision
Current Assumption (aka Interest-Sensitive) Whole Life policy
40. Available for any reason up to full cash value @ fixed (max 8%) OR variable interest rate; loan $ + interest deducted from benefit @ death.
Policy loans
Key Employee Disability policy
Medicare Supplement or Medigap policy
Trial Application (aka Request for Offer)
41. Facultative - case by case agreements; Automatic/Treaty - automatic acceptance of risk percentage per previous agreement.
Reinsurance
Preferred Provider Organization (PPO)
Entire Contract provision
Types of reinsurance
42. 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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43. Provides supplemental coverage for physician/surgeon fees if enrolled (during enrollment period ONLY) & pay monthly premium w/ deductible and co-insurance.
Major Medical plan
Accidental Death (aka Multiple Indemnity) rider
Free Look provision
Medicare Part B (aka Supplemental Medical Insurance or SMI)
44. 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.
Tax implications of Disability policy
Tax implications of medical plans
Blue Cross/Blue Shield
Types of Term Life policies
45. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.
Business Continuation (aka Buy-Sell) Disability policy
Dread Disease policy
Types of Term Life policies
Rehabilitation rider
46. Dividends are NOT taxable but interest is. Loan interest is NOT tax-deductible. Interest paid by Insurer on retained funds is taxable.
Reinsurance
Equity Index Whole Life policy
Tax implications of Dividends - Loans & Interest
Guaranteed Insurability Life rider
47. Private sector (Commercial) - provides LA&H - P&C - & LTC; Public sector (Gov't) - provides flood - work. comp. - Medicare/Medicaid - Group Life (SGLI/FEGLI).
Annuity
Common Life Exclusions
Types of Insurers (by sector)
Dividend options
48. 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.
Annuity surrender charges
Dependent coverage
Types of Agency Authority
Tax implications of an Estate
49. Plan A is the CORE benefit & is least expensive; All other plans include Plan A + additional benefits. Plans F & J are high deductible. K & L are both deductible & co-pay plans.
Cost of Living Adjustment (COLA) Life rider
Rate (as defined by CIC)
Policy loans
Plans A-L of Medical Supplement or Medigap
50. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).
Types of Medical Plans
Graded Premium Whole Life policy
Insurable interest
Recurrent disability clause/provision