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. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.






2. 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.






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






4. Privately-provided or Medicare-provided (if no private carrier) prescription drug plans for qualified individuals but w/ premium - deductible & co-pay.






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






6. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.






7. Federal law which prohibits companies w/ 15+ employees from decreasing coverage benefits for women affected by pregnancy or childbirth.






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






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






10. Coverage remains in effect for 31 days past premium due date; benefits paid during grace period would be deducted from sum.






11. Group plan initially self-funded by employer (like SIR); after which - group plan Insurer covers (up to policy limit); requires TPA.






12. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.






13. Permanent - not recoverable (spinal cord injury); Temporary - recoverable (temp. illness/injury - broken limb).






14. Agreement - Offer & acceptance; Consideration - application + premium; Legal capacity - licensed &/or competent; Legal purpose - public good.






15. Employer w/ 25 or less employees must offer all eligible employees @ least 2 medical plan options where pre-existing conditions can't be excluded more than 1 yr.






16. 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






17. Same as Comprehensive Major Medical but w/ integrated deductible; much more expensive.






18. Qualified Annuity - Tax-deductible contributions & tax-deferred growth but fully taxable w/drawals.






19. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.






20. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.






21. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.






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






23. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.






24. Info already known; Info that should have been known; Waived info; Irrelevant info.






25. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.






26. 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.






27. Prohibited w/ regard to testing for people of same class; test results must remain confidential; coverage may be declined (once discovered).






28. 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.






29. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.






30. Combination of Basic Medical & Major Medical in one policy; Basic pays 1st - then Major Medical w/ corridor deductible.






31. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.






32. Representation - oral or written statement made to best of knowledge or belief; Warranty - statement guaranteed/presumed/understood to be true.






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






34. Waives premium on Life policy for minor child until age 21 in event premium payor dies or becomes disabled.

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35. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.






36. Tendency of poorer risks to seek insurance.






37. Private sector (Commercial) - provides LA&H - P&C - & LTC; Public sector (Gov't) - provides flood - work. comp. - Medicare/Medicaid - Group Life (SGLI/FEGLI).






38. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.






39. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.






40. Facultative - case by case agreements; Automatic/Treaty - automatic acceptance of risk percentage per previous agreement.






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






42. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.






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






44. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.






45. If Insured & primary beneficiary die due to same act (w/in 14 days) - primary assumed 1st to die & contingent beneficiary paid death benefit.






46. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.






47. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.






48. 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;






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






50. Guaranteed min. interest rate on cash value buildup but possible higher rate if short-term investment returns higher than expected.