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. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.






2. No coverage for injuries while: 1: @ voluntary social event; 2: self-inflicted (intentional); 3: under alcohol/drug influence; 4: committing criminal act; 5: aggressor in workplace fight; 6: participating in athletic event (non-pro. athletes) 7: par






3. Mathematical law stating the larger # of occurrences - the more predictable the losses; used to calculate premiums.






4. Non-qualified Annuity - Non-deductible contributions & tax-deferred growth. At pay-out - tax-free principal but taxable growth.






5. Same as WL but w/ adjustable death benefit (& corresponding premium) & over-fund option but w/ annually renewable term (ART).






6. Provides benefit during Social Security "black-out" period - up to 1 yr.






7. Receipt whereby coverage incepts ONLY after underwriting approval.






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






9. Fraternal - non-profit - members only; Reciprocal - unincorp'd org. - members insure each other; Lloyd's Assoc. - groups sharing risks; Surplus lines - special market risks.






10. Earned premium is $ paid for coverage to date. Unearned premium is $ paid & returnable due to coverage not provided.






11. 'The inability to perform ANY gainful occupation'.






12. Type of partial disability rider - which pays fluctuating % of lost income w/out time limit.






13. 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.






14. If Insured changes to: more hazardous job - benefits reduced; less hazardous job - premiums reduce.






15. Provides coverage for specific disease(s) - such as cancer or leukemia.






16. Death benefit determined by Insured's financial goals & needs (minus assets).






17. Federal law which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.






18. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.






19. Federal program financed by payroll taxes provided equally by both employer & employee OR entirely by individual (if self-employed). Provides benefits for: Medicare @ age 65+; retirement; $255 lump sum death benefit; (limited) disability; survivors;






20. Policy provisions must conform to state regulations where policy is sold.






21. Waives premium upon disability of Insured until return to work; disability must persist for 6 mths. or longer. Cash value & dividends not affected.






22. Upon death - death benefit is paid + the aggregate of premiums paid to date; add-on to Term policy ONLY.






23. 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.






24. Death benefit is NOT taxable. Cash value grows tax-deferred but cost basis (base premium) is not taxable - only interest is.






25. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.






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






27. Written policy terms supersede oral statements made prior to policy issue.






28. Refund of 50-80% of premium (minus claims paid) every 5-10 yrs. OR age 65; expensive!






29. War; elective cosmetic surgery; routine dental; work. comp.-covered claims; self-inflicted (intentional); gov't. facility treatment; LTC; private nursing.






30. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.






31. Same as WL but premium low for set # yrs. - THEN premiums vary (+ or -) based on Insurer's investment returns - w/ Gmax.






32. 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.






33. Receipt whereby coverage incepts conditionally upon submission of full consideration and that all underwriting reqs. are met.






34. Agents - represent Insurer; Brokers - represent themselves & Insured; Solicitors - represent one agent to solicit leads.






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






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






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






38. 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.






39. Although death benefit is tax-free - it is included in gross estate value so federal &/or state taxes may apply to a portion in excess of fixed federal limit.






40. 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.






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






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






43. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.






44. Pre-existing illness/injury; Waiting period; Elimination period; Probationary period; Benefits - Exclusions - Limitations; Underwriting reqs.






45. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).






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






47. Process which prevents claim denial as a result of false statement or promise (made by Insurer) - which was relied upon by Insured.






48. Permanent disability due to total loss of sight - hearing - speech or use of 2 + limbs; benefits paid even while continuing to work.






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






50. Covers disabilities occurring both "on" AND "off" job; "on" job benefits paid in addition to work. comp. - if applicable (i.e. individual plan).