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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. Excludes coverage for specific injury/illness either temporarily or permanently in order to eliminate pre-existing condition.
Tax implications of an Annuity (1 of 2)
Binding receipt (aka Temporary Insurance Agreement)
Impairment (Exclusion) rider
Payment of Premium provision
2. 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
Retrocession
Entire Contract provision
Payor (aka Waiver of Payor's Premium) rider
3. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.
Elimination (aka Waiting) period
Cross Purchase Plan
Dread Disease policy
Underwriting risk categories
4. Domestic - within home state; Foreign - outside home state; Alien - outside home country.
Accidental Death (aka Multiple Indemnity) rider
Types of Insurers (by domicile)
Spendthrift provision
Doctrine of Comity
5. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)
Annuity Classifications (1 of 5): How premium is paid
Medicare Part A & B "Gaps"
IRS Penalties for Annuities
Settlement options for Life policy (2 of 2)
6. Federal law to protect Federal employees' (& their beneficiaries') pension - group insurance - & welfare benefits.
Presumptive disability
Employee Retirement Income Security Act (ERISA)
Convertibility provision
Impairment (Exclusion) rider
7. 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
Tax implications of Dividends - Loans & Interest
Medicare Part D
Entire Contract provision
8. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.
Medical cost containment (aka Managed care)
Law of Large Numbers
Juvenile Life (aka Jumping Juvenile) policy
Common Disability Exclusions
9. Type of partial disability rider - which pays fluctuating % of lost income w/out time limit.
Residual disability rider
Loss of Earnings Test
Indemnify
Term Life policy
10. 1: Req. - unless self-employed; 2: 7-day wait for disability benefits; 3: Premium based on ex-mod; 4: Rates approved by CDI; 5: to sell - must satisfy education reqs.
Blackout Period
CA Work. Comp. Statutes
Recurrent disability clause/provision
Estoppel
11. Grows @ fixed interest rate for set term but cash value may adjust to prevailing rate (+ or -) if fully surrendered before term ends; % w/drawal ok.
Plans A-L of Medical Supplement or Medigap
Market Value Adjusted (aka Modified Guaranteed) annuity
Phases of an annuity
Needs approach (most common)
12. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.
Equity Index Whole Life policy
Dental Plan
Types of Accident & Health (A&H) providers
Loss exposure
13. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.
Approval Type Conditional receipt
Common Accident provision
Flexible Spending Account (FSA)
Transplant/Cosmetic Surgery rider
14. Temp. coverage for set duration w/ death benefit ONLY (no cash value) - offers largest $ for lowest premium; renewable; convertible.
Suicide clause/provision
Exclusions to Work. Comp.
Errors & Omissions (E&O)
Term Life policy
15. Group plan initially self-funded by employer (like SIR); after which - group plan Insurer covers (up to policy limit); requires TPA.
Preferred Provider Organization (PPO)
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Change of Occupation provision
Employer-Administered plan
16. Treating or mitigating loss exposures through 1: avoidance; 2: retention (deductibles); 3: sharing; 4: reduction; or 5: transfer.
Risk management
Modified Endowment Contract (MEC)
Impairment (Exclusion) rider
Cost of Living Adjustment (COLA) Life rider
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 $.
Medi-Cal Share Cost plan
Annuity Classifications (5 of 5): # of lives
Dividends
Civil Rights/Pregnancy Discrimination Act
18. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.
24 Hour Coverage (CA)
Free Look provision
Types of Insurers (miscellaneous)
Joint Life (aka "First to die") policy
19. 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
Earned vs. Unearned premium
Annuity Classifications (5 of 5): # of lives
Primary Insurance Amount (PIA)
20. Covers entire family w/ WL for breadwinner & (convertible) Level Term for spouse & children (until certain age).
Concealment
Indemnify
Family policy
Comprehensive Major Medical plan
21. Private sector (Commercial) - provides LA&H - P&C - & LTC; Public sector (Gov't) - provides flood - work. comp. - Medicare/Medicaid - Group Life (SGLI/FEGLI).
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Variable Life policy (2 of 2)
Supplemental Major Medical plan
Types of Insurers (by sector)
22. 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.
Variable Universal Life policy
Partial disability rider
Health Reimbursement Account (HRA)
Total disability (as commonly defined)
23. Potential circumstance that could cause a loss; measured in dollars.
Loss exposure
Settlement options for Life policy (2 of 2)
Employer-Administered plan
Recurrent disability clause/provision
24. Monthly; Quarterly; Semi-annually; Annually (cheapest due to less admin cost).
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Life insurance policy
Premium modes
Annuity Classifications (2 of 5): When benefits begin
25. Same as WL but w/ adjustable death benefit (& corresponding premium) & over-fund option but w/ annually renewable term (ART).
Residual disability rider
Considerations in replacing Health insurance
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Reinstatement provision
26. Grows @ fixed min. interest rate but w/ possible higher rate tied to equity index (i.e S&P Equity Index) appreciation; gains shared w/ Insurer.
Variable Life policy (1 of 2)
Key Employee Disability policy
Equity Indexed annuity
Preferred Provider Organization (PPO)
27. Process whereby a reinsurer reinsures w/ another reinsurer.
Retrocession
Tax implications of Disability policy
Supplemental Major Medical plan
Tax implications of medical plans
28. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.
Incontestability clause/provision
Insuring clause/provision (aka Insuring Agreement)
Elimination (aka Waiting) period
Change of Occupation provision
29. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.
Business Continuation (aka Buy-Sell) Disability policy
Types of Insurers (by sector)
Tax implications of Dividends - Loans & Interest
Pure risk vs. Speculative risk
30. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.
Types of Insurers (by ownership)
Rescission
Return of Premium rider
Types of Renewability provisions
31. 'The inability to perform your OWN normal occupation or daily duties'.
Total disability (as commonly defined)
Limited Pay Whole Life policy
Annuity Classifications (5 of 5): # of lives
Insuring clause/provision (aka Insuring Agreement)
32. Written policy terms supersede oral statements made prior to policy issue.
Survivorship (aka "Last to die") policy
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Parole Pardon Rule
Annuity surrender charges
33. 1: Tax-free lump sum; 2: Monthly pay-outs for fixed time; 3: Fixed monthly payments until depleted.
Variable Life policy (2 of 2)
Human Life Value approach
Settlement options for Life policy (1 of 2)
Health Insurance Portability and Accountability Act (HIPAA)
34. Compensates business for loss due to disability of key employee; premiums not deductible but benefits tax-free.
Beneficiary provisions
Key Employee Disability policy
Errors & Omissions (E&O)
Medicare Part A (aka Hospital Insurance or HI)
35. Qualified Annuity - Tax-deductible contributions & tax-deferred growth but fully taxable w/drawals.
Civil Rights/Pregnancy Discrimination Act
Tax implications of an Annuity (1 of 2)
Supplemental Major Medical plan
Small Employer Medical Expense plan
36. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.
Plans A-L of Medical Supplement or Medigap
Split Dollar Plan
Credit Life policy
Tax implications of Disability policy
37. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.
Non-Occupational Disability policy
Health Reimbursement Account (HRA)
Dividends
Common Accident provision
38. 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.
Health Insurance Portability and Accountability Act (HIPAA)
Departments of an Insurer
Family Maintenance policy
Policy delivery
39. Federally-sponsored health care for individuals 65+ &/or w/ certain disabilities; may run concurrent w/ group plan but group plan would act primary - THEN Medicare.
Settlement options for Life policy (1 of 2)
Parole Pardon Rule
Medicare
Notice of Claim provision
40. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.
Trial Application (aka Request for Offer)
Human Life Value approach
Workers' Compensation insurance
Guaranteed Insurability Life rider
41. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.
Return of Cash Value rider
Business Overhead Expense (BOE) Disability policy
Tax implications of an Annuity (1 of 2)
Revocable vs. Irrevocable beneficiary
42. Waives premium on Life policy for minor child until age 21 in event premium payor dies or becomes disabled.
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43. Provides for continued operation of business if partner dies - by allowing surviving partner(s) to buy deceased partner's interest in business.
Employer-Administered plan
Medicare Supplement or Medigap policy
Business Continuation (aka Buy-Sell) policy
Family Maintenance policy
44. Provides benefit during Social Security "black-out" period - up to 1 yr.
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Social Security Benefit (Supplement) rider
Insuring clause/provision (aka Insuring Agreement)
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
45. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.
Types of Licensed Producers
Adverse selection
Common Disability Exclusions
Types of Accident & Health (A&H) providers
46. Mandatory 100% employer-funded coverage for injuries/illnesses occurring "on" job; full-time employees only; exclusive remedy. Provides: 1: unlimited medical benefit; 2: survivor income replacement & funeral ($5 -000 max.); 3: disability benefit @ 66
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47. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.
Reinsurance
IRS Penalties for Annuities
Types of Agency Authority
Types of Renewability provisions
48. No deductible coverage for: daily room/board; ancillary costs; surgeon &/or physician expense (for added premium).
Basic Medical plan
Fraud
Medi-Cal Share Cost plan
Valid life insurance contracts must identify...
49. Same as WL but premium low for 1st 5 yrs. - THEN has annual premium increases for set # yrs. - THEN level premium.
Blue Cross/Blue Shield
Return of Cash Value rider
Family policy
Graded Premium Whole Life policy
50. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.
Life insurance policy
Time Limit on Certain Defenses provision
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Endowment Life policy