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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. Funding mechanism whereby employer & employee share cost of premium. Upon death - benefit is shared between employer & beneficiary.
Split Dollar Plan
Automatic Premium Loan (APL) provision
Levels of Long Term Care provided
Consolidated Omnibus Budget Reconciliation Act (COBRA)
2. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.
Errors & Omissions (E&O)
Comprehensive Major Medical plan
Modified Premium Whole Life policy
Permanent vs. Temporary disability
3. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.
Common Accident provision
Reinstatement provision
Indemnify
Medicare Part A (aka Hospital Insurance or HI)
4. Facultative - case by case agreements; Automatic/Treaty - automatic acceptance of risk percentage per previous agreement.
Non-forfeiture options for WL policy
Suicide clause/provision
Types of reinsurance
Return of Premium rider
5. A&H - A&S - Sickness only; Medical; Disability; Accident only; Travel accident; LTC; Medicare supplement; AD&D; Dental/Vision/Prescription; Limited.
Cost of Living Adjustment (COLA) Life rider
Types of Accident & Health insurance
Tax implications of an Annuity (1 of 2)
Estoppel
6. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.
Underwriting risk categories
Health Maintenance Organization (HMO)
Age Discrimination in Employment Act (ADEA)
Legal Action provision
7. Death benefit determined by Insured's projected lost earnings potential.
Health Maintenance Organization (HMO)
Business Overhead Expense (BOE) Disability policy
Human Life Value approach
Annuity surrender charges
8. Provides 24 hr. health coverage both "on" & "off" job - but may cause coverage duplication & coordination challenges.
Recurrent disability clause/provision
Cost of Living Adjustment (COLA) Disability rider
24 Hour Coverage (CA)
Supplemental Major Medical plan
9. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.
Free Look provision
Types of reinsurance
Return of Premium rider
Equity Indexed annuity
10. Same as WL but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Types of Term Life policies
Variable Life policy (1 of 2)
Insurable interest
Free Look provision
11. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.
Medical Savings Account (MSA) & Health Savings Account (HSA)
Modified Endowment Contract (MEC)
Common Life Exclusions
Market Value Adjusted (aka Modified Guaranteed) annuity
12. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.
CHAMPUS (aka TriCare)
Spendthrift provision
Elimination (aka Waiting) period
Survivorship (aka "Last to die") policy
13. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.
Cash value
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Policy delivery
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
14. 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.
Settlement options for Life policy (2 of 2)
CA Work. Comp. Statutes
Plans A-L of Medical Supplement or Medigap
Payment of Premium provision
15. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.
Employee Retirement Income Security Act (ERISA)
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Entire Contract provision
Earned vs. Unearned premium
16. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Departments of an Insurer
Employer Liability
Adjustable Whole Life policy
17. 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.
CA Work. Comp. Statutes
Adjustable Whole Life policy
Medical Savings Account (MSA) & Health Savings Account (HSA)
Small Employer Medical Expense plan
18. PURELY employer-funded account to reimburse employees for qualified medical expenses not covered by group health plan.
Insurer (as defined by CIC)
Common Life Exclusions
Health Reimbursement Account (HRA)
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
19. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.
Types of Licensed Producers
Business Continuation (aka Buy-Sell) Disability policy
Payor (aka Waiver of Payor's Premium) rider
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
20. A lapsed policy may be reinstated if not longer than 3-5 yrs. - & proof of insurability re-established - & back premiums + interest paid.
Binding receipt (aka Temporary Insurance Agreement)
Types of Accident & Health insurance
Needs approach (most common)
Reinstatement provision
21. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).
Graded Premium Whole Life policy
Exclusions to Work. Comp.
Settlement options for Life policy (2 of 2)
Loss of Earnings Test
22. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.
Credit Life policy
Law of Large Numbers
Medicare Part A & B "Gaps"
7 Pay Test
23. 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.
Valid life insurance contracts must identify...
Small Employer Medical Expense plan
Primary Insurance Amount (PIA)
Workers' Compensation insurance
24. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.
Indeterminate Premium Whole Life policy
Entire Contract provision
Key Employee policy
Whole (aka Permanent or Straight) Life policy
25. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.
Applicant Representations vs. Warranties
Family or Dependents rider
Indemnify
Factors that determine premium
26. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Presumptive disability
Indeterminate Premium Whole Life policy
Group Disability plan
Credit Life policy
27. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Time Limit on Certain Defenses provision
Errors & Omissions (E&O)
Accidental Death (aka Multiple Indemnity) rider
28. Benefits automatically increase annually based on inflationary index (i.e. Consumer Price Index) OR flat rate (5% max.).
Cost of Living Adjustment (COLA) Disability rider
Conformity with State Statute provision
Annuity Classifications (3 of 5): Source of income
Pure risk vs. Speculative risk
29. The state in which the contract is accepted or delivered is the state that possesses regulatory jurisdiction over Group plan.
Insurance contract characteristics (1 of 2)
Doctrine of Comity
Indemnify
Beneficiary provisions
30. Representation - oral or written statement made to best of knowledge or belief; Warranty - statement guaranteed/presumed/understood to be true.
Applicant Representations vs. Warranties
24 Hour Coverage (CA)
Concealment exceptions
Underwriting risk categories
31. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.
Tax implications of an Annuity (1 of 2)
Types of reinsurance
Types of Insurers (by sector)
Types of Insurers (by ownership)
32. Insurance purchased by other Insurer(s) to spread or diversify risk; promotes industry stability.
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Proof of Loss provision
Health Insurance Portability and Accountability Act (HIPAA)
Reinsurance
33. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.
Departments of an Insurer
Adjustable Whole Life policy
Health Maintenance Organization (HMO)
Claim Form (aka Proof of Loss Form) provision
34. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.
Tax implications of Disability policy
Credit Life policy
7 Pay Test
Joint Life (aka "First to die") policy
35. Basic Medical; Major Medical; Comprehensive Major Medical
Endowment Life policy
Types of Medical Plans
Annuity Classifications (5 of 5): # of lives
Dread Disease policy
36. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.
Approval Type Conditional receipt
Cross Purchase Plan
Term Life policy
Legal Action provision
37. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).
Fraud
Employer-Administered plan
Suicide clause/provision
1035 Exchange
38. Monthly; Quarterly; Semi-annually; Annually (cheapest due to less admin cost).
Types of Insurers (by authorization)
Experience vs. Community rating in Group Health plan
Premium modes
Free Look provision
39. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.
Automatic Premium Loan (APL) provision
Estoppel
Notice of Claim provision
Concealment exceptions
40. Info already known; Info that should have been known; Waived info; Irrelevant info.
Flexible Spending Account (FSA)
Concealment exceptions
Employer-Administered plan
CHAMPUS (aka TriCare)
41. Price of insurance per exposure unit.
Types of Insurers (by sector)
Comprehensive Major Medical plan
Rate (as defined by CIC)
Waiver of Premium provision
42. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.
Adjustable Whole Life policy
Term Life policy
Palliative vs. Curative care
Medi-Cal Share Cost plan
43. War - 2 types; Suicide (1st 2 yrs.); Aviation (non-commercial); Hazardous hobbies; Criminal acts; Alcohol/Drug influenced.
Non-Occupational Disability policy
Estoppel
Point of Service plan
Common Life Exclusions
44. Same as Comprehensive Major Medical but w/ integrated deductible; much more expensive.
Legal Action provision
Indeterminate Premium Whole Life policy
Supplemental Major Medical plan
Underwriting risk categories
45. Private sector (Commercial) - provides LA&H - P&C - & LTC; Public sector (Gov't) - provides flood - work. comp. - Medicare/Medicaid - Group Life (SGLI/FEGLI).
Modified Premium Whole Life policy
Health Reimbursement Account (HRA)
Tax implications of Death Benefit & Cash Value
Types of Insurers (by sector)
46. Allows policy owner to w/draw set % of death benefit upon verification of terminal illness w/ expectancy 12-24 mths.; generally tax-free.
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Survivorship (aka "Last to die") policy
Flexible Spending Account (FSA)
Cost of Living Adjustment (COLA) Disability rider
47. 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.
Joint Life (aka "First to die") policy
Types of Insurers (by domicile)
Waiver of Premium (Waiver of Cost of Insurance) rider
Health Insurance Portability and Accountability Act (HIPAA)
48. Life license + NASD (FINRA) Series 6 or 7.
Levels of Long Term Care provided
Requirements to sell variable life products
Common Accident provision
Key Employee policy
49. 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 Term Life policies
Penalties for violating AIDS/HIV privacy laws
Legal Action provision
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
50. Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling - stock investment).
Entire Contract provision
Pure risk vs. Speculative risk
Employee Retirement Income Security Act (ERISA)
Variable Universal Life policy