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Test your basic knowledge |
CA Life Agent Exam
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Subject
:
certifications
Instructions:
Answer 50 questions in 15 minutes.
If you are not ready to take this test, you can
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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 which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.
Annuity Classifications (5 of 5): # of lives
Age Discrimination in Employment Act (ADEA)
CA Work. Comp. Statutes
Cash value
2. Waives premium on Life policy for minor child until age 21 in event premium payor dies or becomes disabled.
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3. Provides hospital insurance automatically @ age 65 (if FICA qualified) @ no fee but may have deductible & co-pay.
Rehabilitation rider
Grace Period provision
Medicare Part A (aka Hospital Insurance or HI)
Types of Term Life policies
4. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Waiver of Premium provision
Preferred Provider Organization (PPO)
Enhanced Ordinary (aka Extraordinary) Whole Life policy
5. Waives premium upon disability of Insured until return to work; disability must persist for 90 days or longer; 1st 90 day premiums refunded after 90 days.
Return of Premium rider
Waiver of Premium provision
Estoppel
Concealment exceptions
6. 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.
Types of Insurers (by authorization)
Indemnify
CA Work. Comp. Statutes
Business Continuation (aka Buy-Sell) Disability policy
7. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.
Equity Index Whole Life policy
Requirements to sell variable life products
Policy delivery
Legal Action provision
8. 'The inability to perform ANY reasonable occupation based on education - training or experience'.
Cash value
Total disability (more restrictive definition)
Types of Medical Plans
Approval Type Conditional receipt
9. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.
Spendthrift provision
Proof of Loss provision
Medicare Part A & B "Gaps"
Types of hazards
10. Death benefit determined by Insured's financial goals & needs (minus assets).
Employee Retirement Income Security Act (ERISA)
Peril vs. Hazard
Concealment
Needs approach (most common)
11. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.
Medicare
Rehabilitation rider
Revocable vs. Irrevocable beneficiary
Beneficiary provisions
12. 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.
Annuity Classifications (5 of 5): # of lives
Levels of Long Term Care provided
Common Disaster (Simultaneous Death Act) clause/provision
Dividend options
13. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.
Adjustable Whole Life policy
Impairment (Exclusion) rider
24 Hour Coverage (CA)
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
14. Same as WL but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Modified Endowment Contract (MEC)
Variable Life policy (1 of 2)
Payment of Premium provision
Common Disability Exclusions
15. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.
Types of Insurers (by sector)
Juvenile Life (aka Jumping Juvenile) policy
Considerations in replacing Health insurance
Business Overhead Expense (BOE) Disability policy
16. Privately-provided or Medicare-provided (if no private carrier) prescription drug plans for qualified individuals but w/ premium - deductible & co-pay.
Age Discrimination in Employment Act (ADEA)
Payment of Premium provision
Trial Application (aka Request for Offer)
Medicare Part D
17. Conditional - coverage is conditional; Personal - parties are people; Good faith - honesty/integrity; Fiduciary - req's financial trust.
Types of Insurers (by ownership)
Insurance contract characteristics (2 of 2)
Revocable vs. Irrevocable beneficiary
Key Employee Disability policy
18. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.
Underwriting risk categories
Cost of Living Adjustment (COLA) Life rider
Payor (aka Waiver of Payor's Premium) rider
Revocable vs. Irrevocable beneficiary
19. Domestic - within home state; Foreign - outside home state; Alien - outside home country.
Group Disability plan
Types of Insurers (by domicile)
Exclusions for Major Medical plan
Preferred Provider Organization (PPO)
20. Mandatory 100% employer-funded coverage for injuries/illnesses occurring "on" job; full-time employees only; exclusive remedy. Provides: 1: unlimited medical benefit; 2: survivor income replacement & funeral ($5 -000 max.); 3: disability benefit @ 66
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21. Must be delivered in person or by certified - registered or 1st-class mail w/ signature - unless waived by Insurance Commissioner.
Beneficiary provisions
Plans A-L of Medical Supplement or Medigap
Policy delivery
Annuity Classifications (5 of 5): # of lives
22. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.
Valid life insurance contracts must identify...
Cross Purchase Plan
Tax implications of medical plans
Graded Premium Whole Life policy
23. Covers entire family w/ WL for breadwinner & (convertible) Level Term for spouse & children (until certain age).
Common Disaster (Simultaneous Death Act) clause/provision
Family policy
Key Employee policy
Cost of Living Adjustment (COLA) Life rider
24. War - 2 types; Suicide (1st 2 yrs.); Aviation (non-commercial); Hazardous hobbies; Criminal acts; Alcohol/Drug influenced.
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Exclusions for Major Medical plan
Free Look provision
Common Life Exclusions
25. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.
Retrocession
Modified Endowment Contract (MEC)
Current Assumption (aka Interest-Sensitive) Whole Life policy
Types of Accident & Health (A&H) providers
26. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.
Policy loans
Types of Agency Authority
Trial Application (aka Request for Offer)
Earned vs. Unearned premium
27. Same as WL but w/ Level Term rider; upon death - pays monthly income for FULL term AFTER which pays full death benefit.
Medical Savings Account (MSA) & Health Savings Account (HSA)
Pure risk vs. Speculative risk
Health Reimbursement Account (HRA)
Family Maintenance policy
28. 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.
Loss of Earnings Test
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Insurable interest
Preferred Provider Organization (PPO)
29. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.
Types of Accident & Health insurance
Point of Service plan
Loss of Earnings Test
Employee Retirement Income Security Act (ERISA)
30. Intentional deception; grounds for rescission.
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Relation of Earnings to Insurance provision
Family policy
Fraud
31. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.
Elimination (aka Waiting) period
Credit Life policy
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Flexible Spending Account (FSA)
32. Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling - stock investment).
Automatic Premium Loan (APL) provision
Equity Indexed annuity
Pure risk vs. Speculative risk
Phases of an annuity
33. 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.
Insurance contract characteristics (2 of 2)
Types of Medical Plans
Tax implications of an Estate
Insurer (as defined by CIC)
34. Savings account for medical expenses; Tax-deductible contributions; tax-deferred growth; tax-free for qualified use; taxable for non-qualified use.
Considerations in replacing Health insurance
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Life insurance policy
Medical Savings Account (MSA) & Health Savings Account (HSA)
35. Temp. coverage for set duration w/ death benefit ONLY (no cash value) - offers largest $ for lowest premium; renewable; convertible.
Term Life policy
Accidental Death & Dismemberment (AD&D) Disability rider
Loss of Earnings Test
Single Pay Whole Life policy
36. An attempt to contain costs by employing various strategies - including wellness programs - preventative testing - outpatient & alternative procedures.
Exclusions to Work. Comp.
Medical cost containment (aka Managed care)
Settlement options for Life policy (2 of 2)
Family Income policy
37. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.
Types of Agency Authority
Palliative vs. Curative care
Family policy
Tax implications of Dividends - Loans & Interest
38. Type of partial disability rider - which pays fluctuating % of lost income w/out time limit.
Renewability provision
IRS Penalties for Annuities
Accidental Death (aka Multiple Indemnity) rider
Residual disability rider
39. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.
7 Pay Test
Basic Medical plan
Health Insurance Portability and Accountability Act (HIPAA)
Group Disability plan
40. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.
Graded Premium Whole Life policy
Conformity with State Statute provision
Joint Life (aka "First to die") policy
Types of Insurers (by domicile)
41. 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.
Civil Rights/Pregnancy Discrimination Act
Elimination (aka Waiting) period
Market Value Adjusted (aka Modified Guaranteed) annuity
Preferred Provider Organization (PPO)
42. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.
Free Look provision
Limited Pay Whole Life policy
Types of Accident & Health insurance
Types of Agency Authority
43. Federal law to protect Federal employees' (& their beneficiaries') pension - group insurance - & welfare benefits.
Claim Form (aka Proof of Loss Form) provision
Employee Retirement Income Security Act (ERISA)
Medi-Cal Share Cost plan
Dividends
44. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.
Business Continuation (aka Buy-Sell) Disability policy
Incontestability clause/provision
Plans A-L of Medical Supplement or Medigap
Notice of Claim provision
45. Provides supplemental coverage for physician/surgeon fees if enrolled (during enrollment period ONLY) & pay monthly premium w/ deductible and co-insurance.
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Health Maintenance Organization (HMO)
Equity Index Whole Life policy
Consolidated Omnibus Budget Reconciliation Act (COBRA)
46. The state in which the contract is accepted or delivered is the state that possesses regulatory jurisdiction over Group plan.
Doctrine of Comity
Graded Premium Whole Life policy
Small Employer Medical Expense plan
Requirements to sell variable life products
47. Group plan initially self-funded by employer (like SIR); after which - group plan Insurer covers (up to policy limit); requires TPA.
Joint Life (aka "First to die") policy
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Employer-Administered plan
Term Life policy
48. Provides coverage for specific disease(s) - such as cancer or leukemia.
Permanent vs. Temporary disability
Dread Disease policy
Settlement options for Life policy (1 of 2)
Employer Liability
49. Fraternal - non-profit - members only; Reciprocal - unincorp'd org. - members insure each other; Lloyd's Assoc. - groups sharing risks; Surplus lines - special market risks.
Types of Insurers (miscellaneous)
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Civil Rights/Pregnancy Discrimination Act
Premium modes
50. Unilateral - Insurer provides contract; Adhesion - parties must adhere to terms; Aleatory - benefits may not inure equally.
Loss of Earnings Test
Proof of Loss provision
Annuity Classifications (5 of 5): # of lives
Insurance contract characteristics (1 of 2)
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