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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. 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.
Accidental Death & Dismemberment (AD&D) Life policy
Levels of Long Term Care provided
Convertibility provision
Concealment exceptions
2. Permanent - not recoverable (spinal cord injury); Temporary - recoverable (temp. illness/injury - broken limb).
Family Income policy
Relation of Earnings to Insurance provision
Permanent vs. Temporary disability
Indemnify
3. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.
Fraud
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Survivorship (aka "Last to die") policy
Insuring clause/provision (aka Insuring Agreement)
4. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Annuity Classifications (2 of 5): When benefits begin
Employer-Administered plan
Peril vs. Hazard
5. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.
Medi-Cal Share Cost plan
Life insurance policy
Types of Insurers (by domicile)
Juvenile Life (aka Jumping Juvenile) policy
6. Identical to Incontestable Clause in Life policy.
Family policy
Time Limit on Certain Defenses provision
Notice of Claim provision
Tax implications of an Annuity (1 of 2)
7. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.
Premium modes
Earned vs. Unearned premium
Health Maintenance Organization (HMO)
Cross Purchase Plan
8. Waives premium on Life policy for minor child until age 21 in event premium payor dies or becomes disabled.
9. Privately-provided or Medicare-provided (if no private carrier) prescription drug plans for qualified individuals but w/ premium - deductible & co-pay.
Medicare Part D
Common Disability Exclusions
Types of Insurers (by ownership)
Medicare
10. 'The inability to perform ANY gainful occupation'.
Total disability (any-occupational definition)
Basic Medical plan
Employer-Administered plan
Adjustable Whole Life policy
11. Must be delivered in person or by certified - registered or 1st-class mail w/ signature - unless waived by Insurance Commissioner.
Endowment Life policy
Long Term Care (LTC) policy
Policy delivery
Variable Life policy (2 of 2)
12. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.
Annuity Classifications (3 of 5): Source of income
Experience vs. Community rating in Group Health plan
Types of Insurers (by ownership)
Tax implications of Death Benefit & Cash Value
13. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.
Earned vs. Unearned premium
Family or Dependents rider
Factors that determine premium
Point of Service plan
14. Earned premium is $ paid for coverage to date. Unearned premium is $ paid & returnable due to coverage not provided.
Conformity with State Statute provision
Flexible Spending Account (FSA)
Long Term Care (LTC) policy
Earned vs. Unearned premium
15. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.
Partial disability rider
Exclusions for Major Medical plan
Joint Life (aka "First to die") policy
Reinsurance
16. Written policy terms supersede oral statements made prior to policy issue.
Tax implications of an Annuity (1 of 2)
Types of Accident & Health insurance
Parole Pardon Rule
Loss of Earnings Test
17. Unilateral - Insurer provides contract; Adhesion - parties must adhere to terms; Aleatory - benefits may not inure equally.
Insuring clause/provision (aka Insuring Agreement)
Insurance contract characteristics (1 of 2)
Convertibility provision
Return of Premium rider
18. Receipt whereby coverage incepts ONLY after underwriting approval.
Dividends
Payor (aka Waiver of Payor's Premium) rider
Departments of an Insurer
Approval Type Conditional receipt
19. Period of time following any children's survivor benefit & before benefits are provided to employee's widow/widower.
Blackout Period
IRS Penalties for Annuities
Types of Insurers (by sector)
24 Hour Coverage (CA)
20. Info already known; Info that should have been known; Waived info; Irrelevant info.
Types of Accident & Health (A&H) providers
Concealment exceptions
Non-forfeiture options for WL policy
Key Employee policy
21. 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.
Common Accident provision
Medicare Part D
Health Insurance Portability and Accountability Act (HIPAA)
Occupational Disability policy
22. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.
Claim Form (aka Proof of Loss Form) provision
Policy loans
Partial disability rider
Medicare Part A & B "Gaps"
23. Same as WL but w/ adjustable death benefit (& corresponding premium) & over-fund option but w/ annually renewable term (ART).
Valid life insurance contracts must identify...
Adverse selection
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Employee Retirement Income Security Act (ERISA)
24. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).
Basic Medical plan
Cost of Living Adjustment (COLA) Life rider
Common Accident provision
Types of hazards
25. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).
Adjustable Whole Life policy
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Insurable interest
26. 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
Peril vs. Hazard
Blackout Period
Binding receipt (aka Temporary Insurance Agreement)
27. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.
Phases of an annuity
Settlement options for Life policy (2 of 2)
Blue Cross/Blue Shield
Dividends
28. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.
Adjustable Whole Life policy
Total disability (more restrictive definition)
Estoppel
Limited Pay Whole Life policy
29. If Insured & primary beneficiary die due to same act (w/in 14 days) - primary assumed 1st to die & contingent beneficiary paid death benefit.
Applicant Representations vs. Warranties
Common Disaster (Simultaneous Death Act) clause/provision
Levels of Long Term Care provided
Preferred Provider Organization (PPO)
30. Federal law to protect Federal employees' (& their beneficiaries') pension - group insurance - & welfare benefits.
Human Life Value approach
Blue Cross/Blue Shield
Residual disability rider
Employee Retirement Income Security Act (ERISA)
31. The state in which the contract is accepted or delivered is the state that possesses regulatory jurisdiction over Group plan.
Doctrine of Comity
Medical cost containment (aka Managed care)
Reinstatement provision
Workers' Compensation insurance
32. Premiums determined by target cash values or death benefit; partial cash value w/drawals allowed; transparent policy w/ unbundled premium.
Earned vs. Unearned premium
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Common Life Exclusions
Disability Income policy
33. Prepaid med. benefits for members w/ approved primary care M.D. (independent); low co-pay; non-PPO M.D. can be used at higher cost.
Fraud
Juvenile Life (aka Jumping Juvenile) policy
Permanent vs. Temporary disability
Preferred Provider Organization (PPO)
34. Provides % of monthly income benefit if Insured becomes disabled due to illness or accident.
Flexible Spending Account (FSA)
Disability Income policy
Misstatement of Age/Sex provision
Errors & Omissions (E&O)
35. Prepaid med. benefits for members ONLY w/ approved primary care M.D. (HMO employee); focus on preventative care; low co-pay.
Health Maintenance Organization (HMO)
Types of Accident & Health insurance
Requirements to sell variable life products
Earned vs. Unearned premium
36. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Concealment exceptions
Small Employer Medical Expense plan
Insurability Type Conditional receipt
37. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Applicant Representations vs. Warranties
Non-Occupational Disability policy
Relation of Earnings to Insurance provision
38. Same as WL but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Renewability provision
Cash value
Rescission
Variable Life policy (1 of 2)
39. Price of insurance per exposure unit.
Rate (as defined by CIC)
Types of Accident & Health (A&H) providers
Reinstatement provision
Return of Cash Value rider
40. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.
Group Disability plan
IRS Penalties for Annuities
Trusts
Current Assumption (aka Interest-Sensitive) Whole Life policy
41. Pre-existing illness/injury; Waiting period; Elimination period; Probationary period; Benefits - Exclusions - Limitations; Underwriting reqs.
Considerations in replacing Health insurance
Insurable interest
Plans A-L of Medical Supplement or Medigap
Total disability (more restrictive definition)
42. 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.
Cost of Living Adjustment (COLA) Life rider
Partial disability rider
Endowment Life policy
Health Reimbursement Account (HRA)
43. Federal law which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Variable Life policy (1 of 2)
Employer Liability
Age Discrimination in Employment Act (ADEA)
44. Process whereby a reinsurer reinsures w/ another reinsurer.
Dependent coverage
Suicide clause/provision
Retrocession
Medicare Supplement or Medigap policy
45. 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.
Impairment (Exclusion) rider
Primary Insurance Amount (PIA)
Long Term Care (LTC) policy
Blackout Period
46. Provides for continued operation of business if partner dies - by allowing surviving partner(s) to buy deceased partner's interest in business.
Key Employee policy
Total disability (as commonly defined)
Types of hazards
Business Continuation (aka Buy-Sell) policy
47. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.
Disability Income policy
Primary Insurance Amount (PIA)
Employer-Administered plan
Time Limit on Certain Defenses provision
48. 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.
Human Life Value approach
Adverse selection
Types of Insurers (by domicile)
Waiver of Premium provision
49. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.
Applicant Representations vs. Warranties
7 Pay Test
Tax implications of an Annuity (1 of 2)
Factors that determine premium
50. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Accidental Death & Dismemberment (AD&D) Disability rider
Conformity with State Statute provision
Needs approach (most common)
Types of Insurers (by ownership)