Test your basic knowledge |

CA Life Agent Exam

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.






2. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.






3. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.






4. Facultative - case by case agreements; Automatic/Treaty - automatic acceptance of risk percentage per previous agreement.






5. A&H - A&S - Sickness only; Medical; Disability; Accident only; Travel accident; LTC; Medicare supplement; AD&D; Dental/Vision/Prescription; Limited.






6. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.






7. Death benefit determined by Insured's projected lost earnings potential.






8. Provides 24 hr. health coverage both "on" & "off" job - but may cause coverage duplication & coordination challenges.






9. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.






10. Same as WL but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.






11. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.






12. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.






13. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.






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.






15. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.






16. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.






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.






18. PURELY employer-funded account to reimburse employees for qualified medical expenses not covered by group health plan.






19. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.






20. A lapsed policy may be reinstated if not longer than 3-5 yrs. - & proof of insurability re-established - & back premiums + interest paid.






21. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).






22. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.






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.






24. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.






25. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.






26. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.






27. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.






28. Benefits automatically increase annually based on inflationary index (i.e. Consumer Price Index) OR flat rate (5% max.).






29. The state in which the contract is accepted or delivered is the state that possesses regulatory jurisdiction over Group plan.






30. Representation - oral or written statement made to best of knowledge or belief; Warranty - statement guaranteed/presumed/understood to be true.






31. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.






32. Insurance purchased by other Insurer(s) to spread or diversify risk; promotes industry stability.






33. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.






34. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.






35. Basic Medical; Major Medical; Comprehensive Major Medical






36. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.






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).






38. Monthly; Quarterly; Semi-annually; Annually (cheapest due to less admin cost).






39. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.






40. Info already known; Info that should have been known; Waived info; Irrelevant info.






41. Price of insurance per exposure unit.






42. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.






43. War - 2 types; Suicide (1st 2 yrs.); Aviation (non-commercial); Hazardous hobbies; Criminal acts; Alcohol/Drug influenced.






44. Same as Comprehensive Major Medical but w/ integrated deductible; much more expensive.






45. Private sector (Commercial) - provides LA&H - P&C - & LTC; Public sector (Gov't) - provides flood - work. comp. - Medicare/Medicaid - Group Life (SGLI/FEGLI).






46. Allows policy owner to w/draw set % of death benefit upon verification of terminal illness w/ expectancy 12-24 mths.; generally tax-free.






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.






48. Life license + NASD (FINRA) Series 6 or 7.






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.






50. Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling - stock investment).