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. Federal law to protect Federal employees' (& their beneficiaries') pension - group insurance - & welfare benefits.






2. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.






3. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.






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






5. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.






6. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.






7. Receipt whereby coverage incepts ONLY after underwriting approval.






8. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.






9. 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.






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






11. Available for any reason up to full cash value @ fixed (max 8%) OR variable interest rate; loan $ + interest deducted from benefit @ death.






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






13. 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.






14. Reappearance of disability w/in 6 mth. period after "recovery" from same disability is considered recurrence - not new disability.






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






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






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






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






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






20. Coverage for catastrophic loss w/ high limits - front end deductible; co-insurance (80/20%); blanket coverage; stop loss max.






21. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.






22. 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.






23. An attempt to contain costs by employing various strategies - including wellness programs - preventative testing - outpatient & alternative procedures.






24. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.






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






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






27. Dependent children are covered until 19 or 23 (full-time student only) or until self-sufficient (if handicapped).






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






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






30. Fixed premium w/ guaranteed min. death benefit that may increase due to higher than expected investment returns.






31. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.






32. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.






33. Prepaid med. benefits for members w/ approved primary care M.D. (independent); low co-pay; non-PPO M.D. can be used at higher cost.






34. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).






35. Covers disabilities occurring ONLY "off" job; benefits do not overlap work. comp. (i.e. Group plan).






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






37. Req. by CA statute & may provide workers coverage for action-over claims.






38. Federal law allows employees/their dependents to continue group benefits w/in 60 days after termination (if employer has 20+ employees); Insured pays premium @ 102% of group cost.






39. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.






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






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






42. Same as WL but cash value increases @ current interest rates (not set); premium can start low or high & may change.






43. Allows Insured to increase death benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age.






44. Two death benefit options - Option A: death benefit ONLY; Option B: death benefit + cash value; death benefit NOT guaranteed.






45. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.






46. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).






47. Potential circumstance that could cause a loss; measured in dollars.






48. 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.






49. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.






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