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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. Agreement - Offer & acceptance; Consideration - application + premium; Legal capacity - licensed &/or competent; Legal purpose - public good.
Elements to contract
Insurability Type Conditional receipt
Types of Licensed Producers
Business Overhead Expense (BOE) Disability policy
2. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.
Return of Cash Value rider
Reinstatement provision
Insurer (as defined by CIC)
CA Work. Comp. Statutes
3. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.
Automatic Premium Loan (APL) provision
Types of Accident & Health (A&H) providers
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Types of Agency Authority
4. PURELY employer-funded account to reimburse employees for qualified medical expenses not covered by group health plan.
Law of Large Numbers
Health Reimbursement Account (HRA)
Common Accident provision
Insurance contract characteristics (1 of 2)
5. An unintentional mistake committed by an insurance representative; may be covered by E&O insurance.
Accidental Death (aka Multiple Indemnity) rider
Experience vs. Community rating in Group Health plan
Errors & Omissions (E&O)
Variable Life policy (2 of 2)
6. Unintentional - up to $1 -000 + legal $; Intentional - $1 -000-5 -000 + legal $; If harmful - misdemeanor + up to 1 yr. prison + up to $10 -000.
Penalties for violating AIDS/HIV privacy laws
Equity Index Whole Life policy
Types of reinsurance
Insurable interest
7. Waives premium on Life policy for minor child until age 21 in event premium payor dies or becomes disabled.
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8. Agents - represent Insurer; Brokers - represent themselves & Insured; Solicitors - represent one agent to solicit leads.
Types of Licensed Producers
Fraud
CA Work. Comp. Statutes
Concealment
9. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.
Spendthrift provision
Types of Accident & Health (A&H) providers
Automatic Premium Loan (APL) provision
Considerations in replacing Health insurance
10. Provides medical & personal services for people needing extended assistance w/ Activities of Daily Living (ADL). Other benefits include: assisted living care; respite care; hospice care; adult day care.
7 Pay Test
Exclusions to Work. Comp.
Long Term Care (LTC) policy
AIDS/HIV discrimination
11. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Annuity surrender charges
Common Accident provision
Change of Occupation provision
Key Employee policy
12. Federal law which allows health coverage portability when changing jobs - so long as previous coverage was in effect 63+ days; allows some tax deductibility for LTC.
Graded Premium Whole Life policy
Health Insurance Portability and Accountability Act (HIPAA)
Split Dollar Plan
Adjustable Whole Life policy
13. Employer w/ 25 or less employees must offer all eligible employees @ least 2 medical plan options where pre-existing conditions can't be excluded more than 1 yr.
Single Pay Whole Life policy
Concealment exceptions
Small Employer Medical Expense plan
Types of Insurers (by authorization)
14. A company providing lump sum buyout (50-90% of total) of Life policy; becomes owner & beneficiary & assumes premium payments; usually terminally ill viator.
Incontestability clause/provision
Family or Dependents rider
Viatical Settlement Provider (VSP)
Premium modes
15. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Medicare Part D
Single Pay Whole Life policy
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Group Disability plan
16. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.
Misstatement of Age/Sex provision
Dividend options
Medicare Part A (aka Hospital Insurance or HI)
Family or Dependents rider
17. No deductible coverage for: daily room/board; ancillary costs; surgeon &/or physician expense (for added premium).
Health Maintenance Organization (HMO)
Pure risk vs. Speculative risk
Key Employee policy
Basic Medical plan
18. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Penalties for violating AIDS/HIV privacy laws
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Total disability (more restrictive definition)
19. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.
Medical cost containment (aka Managed care)
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Relation of Earnings to Insurance provision
Cross Purchase Plan
20. Same as WL but premium low for set # yrs. - THEN premiums vary (+ or -) based on Insurer's investment returns - w/ Gmax.
Types of Accident & Health insurance
Departments of an Insurer
Adjustable Whole Life policy
Indeterminate Premium Whole Life policy
21. Qualified Annuity - Tax-deductible contributions & tax-deferred growth but fully taxable w/drawals.
Tax implications of an Annuity (1 of 2)
Family or Dependents rider
Flexible Spending Account (FSA)
Civil Rights/Pregnancy Discrimination Act
22. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.
Single Pay Whole Life policy
Return of Premium rider
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Business Overhead Expense (BOE) Disability policy
23. Excludes coverage for suicide during 1st 2 yrs. ONLY but - if it does - all premiums must be returned to beneficiary.
Suicide clause/provision
Adverse selection
Business Continuation (aka Buy-Sell) Disability policy
Insurance contract characteristics (1 of 2)
24. Domestic - within home state; Foreign - outside home state; Alien - outside home country.
Human Life Value approach
Types of Insurers (by domicile)
Penalties for violating AIDS/HIV privacy laws
Modified Premium Whole Life policy
25. Req. by CA statute & may provide workers coverage for action-over claims.
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Equity Indexed annuity
Employer Liability
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
26. If Insured & primary beneficiary die due to same act (w/in 14 days) - primary assumed 1st to die & contingent beneficiary paid death benefit.
Annuity Classifications (1 of 5): How premium is paid
Common Disaster (Simultaneous Death Act) clause/provision
Indemnify
Medicare Part D
27. Govt. organization providing health care benefits for dependents of military personnel.
CHAMPUS (aka TriCare)
Change of Occupation provision
Reinsurance
Accidental Death (aka Multiple Indemnity) rider
28. Period of time following any children's survivor benefit & before benefits are provided to employee's widow/widower.
Medi-Cal Share Cost plan
Settlement options for Life policy (1 of 2)
Blackout Period
Free Look provision
29. Covers entire family w/ WL for breadwinner & (convertible) Level Term for spouse & children (until certain age).
Adjustable Whole Life policy
Family policy
Current Assumption (aka Interest-Sensitive) Whole Life policy
Modified Premium Whole Life policy
30. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.
Convertibility provision
Spendthrift provision
Factors that determine premium
Return of Premium rider
31. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).
Applicant Representations vs. Warranties
Health Maintenance Organization (HMO)
Types of Insurers (by authorization)
Exclusions for Major Medical plan
32. Reappearance of disability w/in 6 mth. period after "recovery" from same disability is considered recurrence - not new disability.
Suicide clause/provision
Recurrent disability clause/provision
COBRA Time Limitations
Cross Purchase Plan
33. Price of insurance per exposure unit.
Employer Liability
Modified Endowment Contract (MEC)
Rate (as defined by CIC)
Elements to contract
34. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.
Business Continuation (aka Buy-Sell) Disability policy
Employer-Administered plan
Medical Savings Account (MSA) & Health Savings Account (HSA)
Annuity
35. 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;
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Tax implications of an Annuity (1 of 2)
Types of Agency Authority
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
36. Provides hospital insurance automatically @ age 65 (if FICA qualified) @ no fee but may have deductible & co-pay.
Considerations in replacing Health insurance
Adverse selection
Employer Liability
Medicare Part A (aka Hospital Insurance or HI)
37. Tendency of poorer risks to seek insurance.
Annuity surrender charges
Medicare
Types of Accident & Health (A&H) providers
Adverse selection
38. Policy must be delivered w/ original (or copy of same) application attached.
CA Work. Comp. Statutes
Entire Contract provision
Insurance contract characteristics (2 of 2)
Considerations in replacing Health insurance
39. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.
Earned vs. Unearned premium
Common Accident provision
Dividends
7 Pay Test
40. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.
Medicaid/Medi-Cal
Comprehensive Major Medical plan
Misstatement of Age/Sex provision
Equity Index Whole Life policy
41. Physical - slippery floor; Moral - dishonest acts; Morale - carelessness or recklessness.
Types of hazards
Law of Large Numbers
Social Security Benefit (Supplement) rider
Applicant Representations vs. Warranties
42. 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.
AIDS/HIV discrimination
Suicide clause/provision
Market Value Adjusted (aka Modified Guaranteed) annuity
Plans A-L of Medical Supplement or Medigap
43. Death benefit determined by Insured's financial goals & needs (minus assets).
Medi-Cal Share Cost plan
Needs approach (most common)
Mortality vs. Morbidity tables
Variable Universal Life policy
44. Prepaid med. benefits for members ONLY w/ approved primary care M.D. (HMO employee); focus on preventative care; low co-pay.
Errors & Omissions (E&O)
Occupational Disability policy
Health Maintenance Organization (HMO)
Annuity
45. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.
Age Discrimination in Employment Act (ADEA)
Total disability (as commonly defined)
Modified Endowment Contract (MEC)
Palliative vs. Curative care
46. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.
Variable Life policy (2 of 2)
Tax implications of an Annuity (1 of 2)
Types of Renewability provisions
Levels of Long Term Care provided
47. Info already known; Info that should have been known; Waived info; Irrelevant info.
Types of Insurers (by authorization)
Dread Disease policy
Concealment exceptions
Tax implications of medical plans
48. WL policy covering 2 or more Insureds but ONLY payable upon death of LAST Insured - generally low premium but high death benefit.
Survivorship (aka "Last to die") policy
Total disability (more restrictive definition)
Dependent coverage
Indemnify
49. Type of partial disability rider - which pays fluctuating % of lost income w/out time limit.
Levels of Long Term Care provided
Retrocession
Residual disability rider
Transplant/Cosmetic Surgery rider
50. A lapsed policy may be reinstated if not longer than 3-5 yrs. - & proof of insurability re-established - & back premiums + interest paid.
Accidental Death & Dismemberment (AD&D) Life policy
Workers' Compensation insurance
Reinstatement provision
Cash value