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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. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.
Errors & Omissions (E&O)
Life insurance policy
Palliative vs. Curative care
Common Life Exclusions
2. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.
Palliative vs. Curative care
Policy delivery
Proof of Loss provision
Limited Pay Whole Life policy
3. 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.
Cost of Living Adjustment (COLA) Disability rider
Tax implications of an Estate
Market Value Adjusted (aka Modified Guaranteed) annuity
Insurability Type Conditional receipt
4. Death benefit determined by Insured's projected lost earnings potential.
Business Continuation (aka Buy-Sell) Disability policy
Proof of Loss provision
Renewability provision
Human Life Value approach
5. The state in which the contract is accepted or delivered is the state that possesses regulatory jurisdiction over Group plan.
Doctrine of Comity
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Family or Dependents rider
Experience vs. Community rating in Group Health plan
6. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.
Grace Period provision
Total disability (more restrictive definition)
Annuity Classifications (2 of 5): When benefits begin
Policy delivery
7. Physical - slippery floor; Moral - dishonest acts; Morale - carelessness or recklessness.
Tax implications of an Annuity (1 of 2)
Preferred Provider Organization (PPO)
Types of hazards
Underwriting risk categories
8. 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.
Point of Service plan
Endowment Life policy
Dividend options
Pure risk vs. Speculative risk
9. Private sector (Commercial) - provides LA&H - P&C - & LTC; Public sector (Gov't) - provides flood - work. comp. - Medicare/Medicaid - Group Life (SGLI/FEGLI).
Revocable vs. Irrevocable beneficiary
Exclusions for Major Medical plan
Types of Insurers (by sector)
Palliative vs. Curative care
10. Unintentional - up to $1 -000 + legal $; Intentional - $1 -000-5 -000 + legal $; If harmful - misdemeanor + up to 1 yr. prison + up to $10 -000.
Dental Plan
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Credit Life policy
Penalties for violating AIDS/HIV privacy laws
11. Covers disabilities occurring both "on" AND "off" job; "on" job benefits paid in addition to work. comp. - if applicable (i.e. individual plan).
Departments of an Insurer
Types of reinsurance
Common Disaster (Simultaneous Death Act) clause/provision
Occupational Disability policy
12. Coverage for catastrophic loss w/ high limits - front end deductible; co-insurance (80/20%); blanket coverage; stop loss max.
Major Medical plan
Blue Cross/Blue Shield
Health Insurance Portability and Accountability Act (HIPAA)
7 Pay Test
13. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Requirements to sell variable life products
Proof of Loss provision
Presumptive disability
14. A&H - A&S - Sickness only; Medical; Disability; Accident only; Travel accident; LTC; Medicare supplement; AD&D; Dental/Vision/Prescription; Limited.
Return of Premium rider
Trusts
Dividend options
Types of Accident & Health insurance
15. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.
Types of Renewability provisions
Approval Type Conditional receipt
Common Disaster (Simultaneous Death Act) clause/provision
Insurability Type Conditional receipt
16. Policy provisions must conform to state regulations where policy is sold.
Errors & Omissions (E&O)
Primary Insurance Amount (PIA)
Conformity with State Statute provision
Equity Indexed annuity
17. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Annuity surrender charges
Accidental Death & Dismemberment (AD&D) Life policy
Exclusions to Work. Comp.
Payment of Premium provision
18. 1: Straight aka Pure Life - lifetime income but no survivorship refund; 2: Life w/ Period Certain - lifetime income w/ death benefit of monthly annuity for remaining predetermined term. 3: Annuity Certain - monthly income paid for predetermined term
Elimination (aka Waiting) period
Tax implications of Disability policy
Annuity Classifications (5 of 5): # of lives
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
19. Allows Insured to increase death benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age.
Types of Term Life policies
Types of Insurers (by sector)
Guaranteed Insurability Life rider
Approval Type Conditional receipt
20. Privately-provided or Medicare-provided (if no private carrier) prescription drug plans for qualified individuals but w/ premium - deductible & co-pay.
Experience vs. Community rating in Group Health plan
Medicare Part D
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Settlement options for Life policy (2 of 2)
21. An unintentional mistake committed by an insurance representative; may be covered by E&O insurance.
Cash value
Phases of an annuity
Errors & Omissions (E&O)
Types of Insurers (by domicile)
22. Provides 24 hr. health coverage both "on" & "off" job - but may cause coverage duplication & coordination challenges.
24 Hour Coverage (CA)
Payor (aka Waiver of Payor's Premium) rider
Needs approach (most common)
Dividend options
23. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.
Accidental Death (aka Multiple Indemnity) rider
Medi-Cal Share Cost plan
Health Insurance Portability and Accountability Act (HIPAA)
Presumptive disability
24. Both Contributory & Non-contributory Group policies are deductible to employer (not employee) but benefits are taxable. Individual policy premium is NOT deductible but benefit is received tax-free.
Reinstatement provision
Common Accident provision
Residual disability rider
Tax implications of Disability policy
25. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.
Concealment exceptions
7 Pay Test
Credit Life policy
Medicare Supplement or Medigap policy
26. Price of insurance per exposure unit.
Rate (as defined by CIC)
Needs approach (most common)
Settlement options for Life policy (1 of 2)
Total disability (any-occupational definition)
27. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.
Health Maintenance Organization (HMO)
Point of Service plan
Rescission
Dependent coverage
28. Covers entire family w/ WL for breadwinner & (convertible) Level Term for spouse & children (until certain age).
Family policy
Insurable interest
Revocable vs. Irrevocable beneficiary
Concealment
29. Dependent children are covered until 19 or 23 (full-time student only) or until self-sufficient (if handicapped).
Medicare Supplement or Medigap policy
Dependent coverage
Blackout Period
Graded Premium Whole Life policy
30. Monthly; Quarterly; Semi-annually; Annually (cheapest due to less admin cost).
Premium modes
Revocable vs. Irrevocable beneficiary
Joint Life (aka "First to die") policy
Proof of Loss provision
31. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).
Loss of Earnings Test
Return of Premium rider
Comprehensive Major Medical plan
Types of Medical Plans
32. 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
Parole Pardon Rule
Dread Disease policy
Insurance contract characteristics (1 of 2)
33. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.
Joint Life (aka "First to die") policy
Equity Index Whole Life policy
Errors & Omissions (E&O)
Requirements to sell variable life products
34. 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.
Departments of an Insurer
Health Reimbursement Account (HRA)
Partial disability rider
IRS Penalties for Annuities
35. Waives premium upon disability of Insured until return to work; disability must persist for 6 mths. or longer. Cash value & dividends not affected.
Doctrine of Comity
Free Look provision
CHAMPUS (aka TriCare)
Waiver of Premium (Waiver of Cost of Insurance) rider
36. Same as WL but w/ Level Term rider; upon death - pays monthly income for FULL term AFTER which pays full death benefit.
Medicare
Current Assumption (aka Interest-Sensitive) Whole Life policy
Earned vs. Unearned premium
Family Maintenance policy
37. Non-qualified Annuity - Non-deductible contributions & tax-deferred growth. At pay-out - tax-free principal but taxable growth.
Tax implications of an Annuity (1 of 2)
Health Reimbursement Account (HRA)
Misstatement of Age/Sex provision
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
38. Guaranteed min. interest rate on cash value buildup but possible higher rate if short-term investment returns higher than expected.
24 Hour Coverage (CA)
Variable Universal Life policy
Free Look provision
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
39. Waives premium on Life policy for minor child until age 21 in event premium payor dies or becomes disabled.
40. 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)
Risk management
Business Continuation (aka Buy-Sell) policy
Family or Dependents rider
41. Upon death - death benefit is paid + the aggregate of cash value accumulated to date; add-on to WL policy ONLY.
Types of Insurers (by authorization)
Return of Cash Value rider
Estoppel
Medicare Part C (aka Medicare Advantage)
42. Benefits automatically increase annually based on inflationary index (i.e. Consumer Price Index) OR flat rate (5% max.).
Settlement options for Life policy (1 of 2)
Cost of Living Adjustment (COLA) Disability rider
Payment of Premium provision
Life insurance policy
43. Process which prevents claim denial as a result of false statement or promise (made by Insurer) - which was relied upon by Insured.
Misstatement of Age/Sex provision
Estoppel
Convertibility provision
Tax implications of an Estate
44. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).
Cost of Living Adjustment (COLA) Life rider
Civil Rights/Pregnancy Discrimination Act
Business Continuation (aka Buy-Sell) policy
Employer-Administered plan
45. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.
Phases of an annuity
Free Look provision
Indemnify
Accidental Death (aka Multiple Indemnity) rider
46. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.
Types of Insurers (by authorization)
Revocable vs. Irrevocable beneficiary
Suicide clause/provision
Cross Purchase Plan
47. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.
Life insurance policy
Insurer (as defined by CIC)
Return of Premium rider
Underwriting risk categories
48. 1: Tax-free lump sum; 2: Monthly pay-outs for fixed time; 3: Fixed monthly payments until depleted.
Types of Accident & Health (A&H) providers
Revocable vs. Irrevocable beneficiary
Settlement options for Life policy (1 of 2)
Insurer (as defined by CIC)
49. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.
Doctrine of Comity
Guaranteed Insurability Life rider
Policy delivery
Adjustable Whole Life policy
50. Provides disability income during surgery recovery from life-threatening condition (& sometimes cosmetic surgery).
Preferred Provider Organization (PPO)
Types of Accident & Health insurance
Tax implications of an Annuity (1 of 2)
Transplant/Cosmetic Surgery rider