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






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






3. Primary - if 2 or more - equally shared; Contingent (Secondary) - only if primary dead; Tertiary - only if both primary & secondary dead. If none listed - goes to estate.






4. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.






5. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.






6. A company providing lump sum buyout (50-90% of total) of Life policy; becomes owner & beneficiary & assumes premium payments; usually terminally ill viator.






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






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






9. Provides disability income during surgery recovery from life-threatening condition (& sometimes cosmetic surgery).






10. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.






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






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






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






14. 'The inability to perform your OWN normal occupation or daily duties'.






15. 'The inability to perform ANY reasonable occupation based on education - training or experience'.






16. Peril is the CAUSE of loss. Hazard is a condition that increases LIKELIHOOD of loss.






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






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






19. Policy owner must notify Insurer of loss either in writing - in person or by phone w/in 20 days.






20. 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.






21. Must be delivered in person or by certified - registered or 1st-class mail w/ signature - unless waived by Insurance Commissioner.






22. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.






23. Responsible adult trustee designated to manage death benefits for minor child beneficiary until adulthood.






24. Receipt whereby coverage incepts immediately upon submission of full consideration - unless declined & premium refunded.






25. Process whereby a reinsurer reinsures w/ another reinsurer.






26. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.






27. Intentional OR unintentional failure to disclose material underwriting facts that should have been disclosed; grounds for policy rescission.






28. 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.






29. Allows for use of HMO/PPO or other private carrier to provide expanded benefits @ additional premium & if enrolled in BOTH Parts A & B.






30. Same as WL but w/ Level Term rider; upon death - pays monthly income for FULL term AFTER which pays full death benefit.






31. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.






32. Dividends are NOT taxable but interest is. Loan interest is NOT tax-deductible. Interest paid by Insurer on retained funds is taxable.






33. Govt. organization providing health care benefits for dependents of military personnel.






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






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






36. A&H - A&S - Sickness only; Medical; Disability; Accident only; Travel accident; LTC; Medicare supplement; AD&D; Dental/Vision/Prescription; Limited.






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






38. Prepaid med. benefits for "subscribers" @ approved facilities; many non-profit; Blue Cross - Hospital stays; Blue Shield - M.D. costs.






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






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






41. Domestic - within home state; Foreign - outside home state; Alien - outside home country.






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






43. 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.






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






45. Allows for Term policy renewal @ higher premium w/out medical exam; guarantees insurability; based on actual/attained age.






46. Tendency of poorer risks to seek insurance.






47. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.






48. Allows policy owner to w/draw set % of death benefit upon verification of terminal illness w/ expectancy 12-24 mths.; generally tax-free.






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






50. PURELY employer-funded account to reimburse employees for qualified medical expenses not covered by group health plan.