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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. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.
Payor (aka Waiver of Payor's Premium) rider
Modified Premium Whole Life policy
Elimination (aka Waiting) period
Business Continuation (aka Buy-Sell) Disability policy
2. 1: Cash (tax-free); 2: Apply to future premiums; 3: Retained by Insurer @ interest; 4: Buy Paid-up WL policy add-ons; 5: Pay-up existing policy; 6: Buy 1-yr. Term policy.
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Variable Life policy (1 of 2)
Major Medical plan
Dividend options
3. Tendency of poorer risks to seek insurance.
Survivorship (aka "Last to die") policy
Indemnify
Adverse selection
Credit Life policy
4. Permanent disability due to total loss of sight - hearing - speech or use of 2 + limbs; benefits paid even while continuing to work.
Flexible Spending Account (FSA)
Modified Premium Whole Life policy
Employee Retirement Income Security Act (ERISA)
Presumptive disability
5. 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)
7 Pay Test
Medicare Part C (aka Medicare Advantage)
Disability Income policy
6. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.
Types of Insurers (by domicile)
Annuity Classifications (3 of 5): Source of income
Settlement options for Life policy (1 of 2)
Partial disability rider
7. 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.
Partial disability rider
Family or Dependents rider
Variable Life policy (2 of 2)
Return of Premium rider
8. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).
Health Reimbursement Account (HRA)
Fraud
Types of Insurers (by authorization)
Total disability (as commonly defined)
9. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.
Preferred Provider Organization (PPO)
Estoppel
Automatic Premium Loan (APL) provision
Suicide clause/provision
10. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.
Tax implications of an Estate
Underwriting risk categories
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Family Maintenance policy
11. Allows policy owner to w/draw set % of death benefit upon verification of terminal illness w/ expectancy 12-24 mths.; generally tax-free.
Non-Occupational Disability policy
Blue Cross/Blue Shield
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Types of Insurers (miscellaneous)
12. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.
Medicare
Dividend options
Revocable vs. Irrevocable beneficiary
Credit Life policy
13. Prepaid med. benefits for "subscribers" @ approved facilities; many non-profit; Blue Cross - Hospital stays; Blue Shield - M.D. costs.
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Types of Insurers (miscellaneous)
Social Security Benefit (Supplement) rider
Blue Cross/Blue Shield
14. Physical - slippery floor; Moral - dishonest acts; Morale - carelessness or recklessness.
Renewability provision
Types of hazards
Mortality vs. Morbidity tables
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
15. Same as WL but premium low for 1st 5 yrs. - THEN has annual premium increases for set # yrs. - THEN level premium.
Claim Form (aka Proof of Loss Form) provision
Equity Index Whole Life policy
Graded Premium Whole Life policy
Business Continuation (aka Buy-Sell) Disability policy
16. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.
Applicant Representations vs. Warranties
Types of Accident & Health insurance
Tax implications of an Annuity (1 of 2)
Types of Insurers (by ownership)
17. 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.
Blue Cross/Blue Shield
Common Life Exclusions
Types of Term Life policies
Blackout Period
18. Same as WL but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Variable Life policy (1 of 2)
Insurance contract characteristics (1 of 2)
Return of Premium rider
Blue Cross/Blue Shield
19. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.
Dependent coverage
IRS Penalties for Annuities
Doctrine of Comity
Tax implications of medical plans
20. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.
Types of Insurers (by ownership)
Business Continuation (aka Buy-Sell) policy
Relation of Earnings to Insurance provision
Primary Insurance Amount (PIA)
21. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.
Entire Contract provision
Return of Cash Value rider
Point of Service plan
Variable Universal Life policy
22. Allows for use of HMO/PPO or other private carrier to provide expanded benefits @ additional premium & if enrolled in BOTH Parts A & B.
Peril vs. Hazard
Single Pay Whole Life policy
Medicare Part C (aka Medicare Advantage)
Claim Form (aka Proof of Loss Form) provision
23. Death benefit determined by Insured's financial goals & needs (minus assets).
Rate (as defined by CIC)
Needs approach (most common)
Long Term Care (LTC) policy
Guaranteed Insurability Life rider
24. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.
Departments of an Insurer
Equity Index Whole Life policy
Medical cost containment (aka Managed care)
Insurance contract characteristics (1 of 2)
25. Mortality is the statistical possibility of death @ each age. Morbidity is the statistical possibility & extent of disability @ each age.
Experience vs. Community rating in Group Health plan
Annuity
Mortality vs. Morbidity tables
Valid life insurance contracts must identify...
26. Identical to Incontestable Clause in Life policy.
Total disability (more restrictive definition)
Time Limit on Certain Defenses provision
Adjustable Whole Life policy
Modified Premium Whole Life policy
27. Covers disabilities occurring both "on" AND "off" job; "on" job benefits paid in addition to work. comp. - if applicable (i.e. individual plan).
Occupational Disability policy
Total disability (any-occupational definition)
Partial disability rider
Elements to contract
28. 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.
Legal Action provision
Equity Index Whole Life policy
Loss exposure
1035 Exchange
29. Federal law which prohibits companies w/ 15+ employees from decreasing coverage benefits for women affected by pregnancy or childbirth.
Civil Rights/Pregnancy Discrimination Act
Variable Universal Life policy
Insurability Type Conditional receipt
Consolidated Omnibus Budget Reconciliation Act (COBRA)
30. 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.
Long Term Care (LTC) policy
Common Disaster (Simultaneous Death Act) clause/provision
Proof of Loss provision
Family Maintenance policy
31. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.
Tax implications of Disability policy
Grace Period provision
Rescission
Medicare Part B (aka Supplemental Medical Insurance or SMI)
32. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.
Types of Renewability provisions
Convertibility provision
Relation of Earnings to Insurance provision
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
33. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.
Concealment
Joint Life (aka "First to die") policy
Key Employee policy
Point of Service plan
34. 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
Key Employee Disability policy
Tax implications of Dividends - Loans & Interest
Waiver of Premium (Waiver of Cost of Insurance) rider
35. Excludes coverage for specific injury/illness either temporarily or permanently in order to eliminate pre-existing condition.
Errors & Omissions (E&O)
Law of Large Numbers
Impairment (Exclusion) rider
Family policy
36. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).
Cost of Living Adjustment (COLA) Life rider
Proof of Loss provision
Insurer (as defined by CIC)
Tax implications of an Estate
37. Same as WL but w/ Decreasing Term rider; upon death - pays monthly income for REMAINING term AFTER which pays full death benefit.
IRS Penalties for Annuities
Family Income policy
Key Employee Disability policy
Graded Premium Whole Life policy
38. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.
Types of Insurers (by ownership)
Experience vs. Community rating in Group Health plan
Endowment Life policy
Indeterminate Premium Whole Life policy
39. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.
Cross Purchase Plan
Dividends
Cost of Living Adjustment (COLA) Life rider
Departments of an Insurer
40. 1: Tax-free lump sum; 2: Monthly pay-outs for fixed time; 3: Fixed monthly payments until depleted.
Types of hazards
Binding receipt (aka Temporary Insurance Agreement)
Adverse selection
Settlement options for Life policy (1 of 2)
41. Peril is the CAUSE of loss. Hazard is a condition that increases LIKELIHOOD of loss.
Notice of Claim provision
Peril vs. Hazard
Change of Occupation provision
Indeterminate Premium Whole Life policy
42. Type of partial disability rider - which pays fluctuating % of lost income w/out time limit.
Payor (aka Waiver of Payor's Premium) rider
Residual disability rider
Reinsurance
Palliative vs. Curative care
43. Covers entire family w/ WL for breadwinner & (convertible) Level Term for spouse & children (until certain age).
Indeterminate Premium Whole Life policy
Exclusions for Major Medical plan
Cost of Living Adjustment (COLA) Life rider
Family policy
44. Treating or mitigating loss exposures through 1: avoidance; 2: retention (deductibles); 3: sharing; 4: reduction; or 5: transfer.
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Risk management
Tax implications of an Estate
Common Accident provision
45. Policy provisions must conform to state regulations where policy is sold.
Disability Income policy
Conformity with State Statute provision
Survivorship (aka "Last to die") policy
Equity Index Whole Life policy
46. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.
Business Overhead Expense (BOE) Disability policy
Loss of Earnings Test
Considerations in replacing Health insurance
Types of Insurers (by sector)
47. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Key Employee policy
Change of Occupation provision
Total disability (any-occupational definition)
48. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.
Types of Agency Authority
Adverse selection
Free Look provision
1035 Exchange
49. Insurance purchased by other Insurer(s) to spread or diversify risk; promotes industry stability.
Limited Pay Whole Life policy
Legal Action provision
Split Dollar Plan
Reinsurance
50. Price of insurance per exposure unit.
Non-Occupational Disability policy
Suicide clause/provision
Rate (as defined by CIC)
Employer Liability