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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. No deductible coverage for: daily room/board; ancillary costs; surgeon &/or physician expense (for added premium).
AIDS/HIV discrimination
Tax implications of an Estate
Basic Medical plan
Types of Insurers (miscellaneous)
2. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.
Relation of Earnings to Insurance provision
Business Overhead Expense (BOE) Disability policy
Primary Insurance Amount (PIA)
Premium modes
3. War - 2 types; Suicide (1st 2 yrs.); Aviation (non-commercial); Hazardous hobbies; Criminal acts; Alcohol/Drug influenced.
Family or Dependents rider
Common Life Exclusions
Factors that determine premium
Common Disaster (Simultaneous Death Act) clause/provision
4. Process whereby a reinsurer reinsures w/ another reinsurer.
Premium modes
Renewability provision
Blackout Period
Retrocession
5. Provides supplemental coverage for physician/surgeon fees if enrolled (during enrollment period ONLY) & pay monthly premium w/ deductible and co-insurance.
24 Hour Coverage (CA)
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Enhanced Ordinary (aka Extraordinary) Whole Life policy
6. Primary - if 2 or more - equally shared; Contingent (Secondary) - only if primary dead; Tertiary - only if both primary & secondary dead. If none listed - goes to estate.
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Beneficiary provisions
Viatical Settlement Provider (VSP)
Retrocession
7. Domestic - within home state; Foreign - outside home state; Alien - outside home country.
Earned vs. Unearned premium
Types of Insurers (by domicile)
Rehabilitation rider
Medicare Part A & B "Gaps"
8. Mathematical law stating the larger # of occurrences - the more predictable the losses; used to calculate premiums.
Long Term Care (LTC) policy
Family or Dependents rider
Medicaid/Medi-Cal
Law of Large Numbers
9. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.
Medicare Part A & B "Gaps"
IRS Penalties for Annuities
Automatic Premium Loan (APL) provision
Elimination (aka Waiting) period
10. Dependent children are covered until 19 or 23 (full-time student only) or until self-sufficient (if handicapped).
Dependent coverage
Policy loans
Key Employee policy
Departments of an Insurer
11. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.
Modified Endowment Contract (MEC)
Accidental Death (aka Multiple Indemnity) rider
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Tax implications of Dividends - Loans & Interest
12. If Insured changes to: more hazardous job - benefits reduced; less hazardous job - premiums reduce.
Earned vs. Unearned premium
Premium modes
Incontestability clause/provision
Change of Occupation provision
13. Qualified Annuity - Tax-deductible contributions & tax-deferred growth but fully taxable w/drawals.
Tax implications of an Annuity (1 of 2)
Variable Life policy (2 of 2)
Notice of Claim provision
Business Overhead Expense (BOE) Disability policy
14. Written policy terms supersede oral statements made prior to policy issue.
Modified Premium Whole Life policy
Notice of Claim provision
Small Employer Medical Expense plan
Parole Pardon Rule
15. 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
Dependent coverage
Tax implications of medical plans
Medicare Part A & B "Gaps"
16. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.
Revocable vs. Irrevocable beneficiary
Age Discrimination in Employment Act (ADEA)
Relation of Earnings to Insurance provision
Business Continuation (aka Buy-Sell) Disability policy
17. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.
Free Look provision
Grace Period provision
Retrocession
Annuity Classifications (5 of 5): # of lives
18. Insured can seek legal action against Insurer for denial of claim only after 60 days and up to 3 yrs. after providing proof of loss.
Impairment (Exclusion) rider
Legal Action provision
Renewability provision
Cost of Living Adjustment (COLA) Life rider
19. Receipt whereby coverage incepts immediately upon submission of full consideration - unless declined & premium refunded.
Beneficiary provisions
Medicare Part A (aka Hospital Insurance or HI)
Presumptive disability
Binding receipt (aka Temporary Insurance Agreement)
20. Same as WL but premium low for set # yrs. - THEN premiums vary (+ or -) based on Insurer's investment returns - w/ Gmax.
Payor (aka Waiver of Payor's Premium) rider
Indeterminate Premium Whole Life policy
Binding receipt (aka Temporary Insurance Agreement)
Endowment Life policy
21. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.
Types of Agency Authority
Human Life Value approach
IRS Penalties for Annuities
Common Life Exclusions
22. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.
Key Employee policy
Fraud
Dependent coverage
Insurer (as defined by CIC)
23. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.
Modified Endowment Contract (MEC)
Trial Application (aka Request for Offer)
Accidental Death (aka Multiple Indemnity) rider
Adverse selection
24. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.
Cross Purchase Plan
Juvenile Life (aka Jumping Juvenile) policy
Variable Life policy (1 of 2)
Total disability (as commonly defined)
25. Unintentional - up to $1 -000 + legal $; Intentional - $1 -000-5 -000 + legal $; If harmful - misdemeanor + up to 1 yr. prison + up to $10 -000.
Medicaid/Medi-Cal
Penalties for violating AIDS/HIV privacy laws
Types of Agency Authority
Convertibility provision
26. Same as WL but cash value increases @ current interest rates (not set); premium can start low or high & may change.
Modified Endowment Contract (MEC)
Medicare Part C (aka Medicare Advantage)
Current Assumption (aka Interest-Sensitive) Whole Life policy
Age Discrimination in Employment Act (ADEA)
27. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.
Proof of Loss provision
Payment of Premium provision
IRS Penalties for Annuities
Indemnify
28. Temp. coverage for set duration w/ death benefit ONLY (no cash value) - offers largest $ for lowest premium; renewable; convertible.
Peril vs. Hazard
Grace Period provision
Reinsurance
Term Life policy
29. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).
1035 Exchange
Palliative vs. Curative care
Employee Retirement Income Security Act (ERISA)
Tax implications of an Estate
30. Coverage remains in effect for 31 days past premium due date; benefits paid during grace period would be deducted from sum.
Earned vs. Unearned premium
Grace Period provision
Annuity Classifications (1 of 5): How premium is paid
Blackout Period
31. Peril is the CAUSE of loss. Hazard is a condition that increases LIKELIHOOD of loss.
Grace Period provision
Free Look provision
Peril vs. Hazard
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
32. 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.
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Convertibility provision
Preferred Provider Organization (PPO)
Reinsurance
33. Excludes coverage for suicide during 1st 2 yrs. ONLY but - if it does - all premiums must be returned to beneficiary.
Exclusions to Work. Comp.
Suicide clause/provision
Survivorship (aka "Last to die") policy
24 Hour Coverage (CA)
34. Allows policy owner to w/draw set % of death benefit upon verification of terminal illness w/ expectancy 12-24 mths.; generally tax-free.
Loss of Earnings Test
Dependent coverage
Time Limit on Certain Defenses provision
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
35. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.
Return of Premium rider
Trial Application (aka Request for Offer)
Insurable interest
Waiver of Premium provision
36. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.
Factors that determine premium
Applicant Representations vs. Warranties
Annuity Classifications (3 of 5): Source of income
Variable Life policy (2 of 2)
37. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.
Juvenile Life (aka Jumping Juvenile) policy
Medicare Part C (aka Medicare Advantage)
Cash value
Law of Large Numbers
38. Private sector (Commercial) - provides LA&H - P&C - & LTC; Public sector (Gov't) - provides flood - work. comp. - Medicare/Medicaid - Group Life (SGLI/FEGLI).
Types of Insurers (by sector)
Limited Pay Whole Life policy
Annuity Classifications (2 of 5): When benefits begin
Types of reinsurance
39. Allows for use of HMO/PPO or other private carrier to provide expanded benefits @ additional premium & if enrolled in BOTH Parts A & B.
Modified Endowment Contract (MEC)
Earned vs. Unearned premium
Medicare Part C (aka Medicare Advantage)
Tax implications of medical plans
40. Policy provisions must conform to state regulations where policy is sold.
Common Life Exclusions
Rescission
Conformity with State Statute provision
Policy delivery
41. Same as WL but w/ adjustable death benefit (& corresponding premium) & over-fund option but w/ annually renewable term (ART).
Market Value Adjusted (aka Modified Guaranteed) annuity
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Annuity
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
42. Life license + NASD (FINRA) Series 6 or 7.
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Binding receipt (aka Temporary Insurance Agreement)
IRS Penalties for Annuities
Requirements to sell variable life products
43. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.
Notice of Claim provision
Medi-Cal Share Cost plan
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Waiver of Premium (Waiver of Cost of Insurance) rider
44. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.
Types of reinsurance
Credit Life policy
Valid life insurance contracts must identify...
Incontestability clause/provision
45. An unintentional mistake committed by an insurance representative; may be covered by E&O insurance.
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Errors & Omissions (E&O)
Renewability provision
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
46. Provides hospital insurance automatically @ age 65 (if FICA qualified) @ no fee but may have deductible & co-pay.
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
IRS Penalties for Annuities
Medicare Part A (aka Hospital Insurance or HI)
Revocable vs. Irrevocable beneficiary
47. Representation - oral or written statement made to best of knowledge or belief; Warranty - statement guaranteed/presumed/understood to be true.
Types of Insurers (by domicile)
Applicant Representations vs. Warranties
Rehabilitation rider
Medi-Cal Share Cost plan
48. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Key Employee policy
Conformity with State Statute provision
Earned vs. Unearned premium
Health Reimbursement Account (HRA)
49. Prepaid med. benefits for "subscribers" @ approved facilities; many non-profit; Blue Cross - Hospital stays; Blue Shield - M.D. costs.
Blue Cross/Blue Shield
Comprehensive Major Medical plan
Rescission
Tax implications of an Annuity (1 of 2)
50. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.
Occupational Disability policy
Tax implications of Dividends - Loans & Interest
Family policy
Flexible Spending Account (FSA)