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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. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.
Medical Savings Account (MSA) & Health Savings Account (HSA)
Earned vs. Unearned premium
Types of Renewability provisions
Adjustable Whole Life policy
2. Part A - Inpatient hospital deductibles vary on # of days; limited reserve days; finite benefit; 1st 3 pints blood; Part B - 20% co-payment.
Medicare Part A & B "Gaps"
Cash value
Disability Income policy
Term Life policy
3. Same as WL but w/ adjustable death benefit (& corresponding premium) & over-fund option but w/ annually renewable term (ART).
Tax implications of an Annuity (1 of 2)
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Cost of Living Adjustment (COLA) Life rider
Tax implications of medical plans
4. Price of insurance per exposure unit.
Experience vs. Community rating in Group Health plan
Employer-Administered plan
Annuity
Rate (as defined by CIC)
5. 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
Loss exposure
Conformity with State Statute provision
Retrocession
6. Beneficiary has right to leave death benefits / Insurer to protect $ from creditors; interest (taxable) paid on retained funds.
Spendthrift provision
Accidental Death & Dismemberment (AD&D) Life policy
Claim Form (aka Proof of Loss Form) provision
Incontestability clause/provision
7. Facultative - case by case agreements; Automatic/Treaty - automatic acceptance of risk percentage per previous agreement.
Incontestability clause/provision
Types of reinsurance
Recurrent disability clause/provision
Annuity Classifications (2 of 5): When benefits begin
8. Federal law to protect Federal employees' (& their beneficiaries') pension - group insurance - & welfare benefits.
Employee Retirement Income Security Act (ERISA)
Peril vs. Hazard
Conformity with State Statute provision
Settlement options for Life policy (2 of 2)
9. Prohibited w/ regard to testing for people of same class; test results must remain confidential; coverage may be declined (once discovered).
Common Disaster (Simultaneous Death Act) clause/provision
AIDS/HIV discrimination
Payor (aka Waiver of Payor's Premium) rider
Proof of Loss provision
10. WL policy covering 2 or more Insureds but ONLY payable upon death of LAST Insured - generally low premium but high death benefit.
Survivorship (aka "Last to die") policy
Types of Insurers (by domicile)
Annuity
Binding receipt (aka Temporary Insurance Agreement)
11. 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;
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Insurance contract characteristics (2 of 2)
Revocable vs. Irrevocable beneficiary
IRS Penalties for Annuities
12. A&H - A&S - Sickness only; Medical; Disability; Accident only; Travel accident; LTC; Medicare supplement; AD&D; Dental/Vision/Prescription; Limited.
Applicant Representations vs. Warranties
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Types of Accident & Health insurance
Rate (as defined by CIC)
13. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.
Transplant/Cosmetic Surgery rider
Modified Premium Whole Life policy
Insurance contract characteristics (2 of 2)
Modified Endowment Contract (MEC)
14. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.
Free Look provision
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Modified Premium Whole Life policy
Reinstatement provision
15. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.
Single Pay Whole Life policy
Free Look provision
Grace Period provision
Flexible Spending Account (FSA)
16. Coverage remains in effect for 31 days past premium due date; benefits paid during grace period would be deducted from sum.
Needs approach (most common)
Annuity Classifications (5 of 5): # of lives
Accidental Death & Dismemberment (AD&D) Life policy
Grace Period provision
17. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Insurable interest
Tax implications of Dividends - Loans & Interest
Accidental Death & Dismemberment (AD&D) Disability rider
Convertibility provision
18. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.
Indemnify
Medicare Part C (aka Medicare Advantage)
Limited Pay Whole Life policy
Annuity Classifications (3 of 5): Source of income
19. Temp. coverage for set duration w/ death benefit ONLY (no cash value) - offers largest $ for lowest premium; renewable; convertible.
Term Life policy
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Experience vs. Community rating in Group Health plan
Survivorship (aka "Last to die") policy
20. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).
Settlement options for Life policy (2 of 2)
1035 Exchange
Insurance contract characteristics (2 of 2)
Civil Rights/Pregnancy Discrimination Act
21. 'The inability to perform ANY reasonable occupation based on education - training or experience'.
Total disability (more restrictive definition)
Occupational Disability policy
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Proof of Loss provision
22. Guaranteed min. interest rate on cash value buildup but possible higher rate if short-term investment returns higher than expected.
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Annuity Classifications (3 of 5): Source of income
Penalties for violating AIDS/HIV privacy laws
Indeterminate Premium Whole Life policy
23. 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
Types of Agency Authority
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Family policy
Business Continuation (aka Buy-Sell) Disability policy
24. Fixed premium w/ guaranteed min. death benefit that may increase due to higher than expected investment returns.
Split Dollar Plan
Return of Cash Value rider
COBRA Time Limitations
Variable Life policy (2 of 2)
25. Agreement - Offer & acceptance; Consideration - application + premium; Legal capacity - licensed &/or competent; Legal purpose - public good.
Policy loans
Accidental Death & Dismemberment (AD&D) Life policy
Types of Insurers (by ownership)
Elements to contract
26. 1: Tax-free lump sum; 2: Monthly pay-outs for fixed time; 3: Fixed monthly payments until depleted.
Settlement options for Life policy (1 of 2)
Rescission
Medicare Part A & B "Gaps"
Age Discrimination in Employment Act (ADEA)
27. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.
Tax implications of Death Benefit & Cash Value
Insuring clause/provision (aka Insuring Agreement)
Trial Application (aka Request for Offer)
Business Continuation (aka Buy-Sell) Disability policy
28. Intentional deception; grounds for rescission.
Phases of an annuity
Medicare
Free Look provision
Fraud
29. No-charge annuity w/drawals allowed up to 10% of total - THEN penalized on sliding scale based on # policy yrs.; conditionally waived.
Impairment (Exclusion) rider
Joint Life (aka "First to die") policy
Annuity surrender charges
Variable Universal Life policy
30. Prepaid med. benefits for members ONLY w/ approved primary care M.D. (HMO employee); focus on preventative care; low co-pay.
Key Employee Disability policy
Dividends
Requirements to sell variable life products
Health Maintenance Organization (HMO)
31. Allows for use of HMO/PPO or other private carrier to provide expanded benefits @ additional premium & if enrolled in BOTH Parts A & B.
Family Income policy
Palliative vs. Curative care
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Medicare Part C (aka Medicare Advantage)
32. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.
Long Term Care (LTC) policy
Free Look provision
Medicare Part D
Suicide clause/provision
33. Expands individual WL policy to include Term Life for dependents (spouse - children - etc.).
Return of Premium rider
Experience vs. Community rating in Group Health plan
Family or Dependents rider
Annuity Classifications (1 of 5): How premium is paid
34. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.
Applicant Representations vs. Warranties
Waiver of Premium provision
Types of Licensed Producers
7 Pay Test
35. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.
Medicare Part A (aka Hospital Insurance or HI)
Fraud
Change of Occupation provision
Types of Accident & Health (A&H) providers
36. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.
Dividend options
Cross Purchase Plan
Employee Retirement Income Security Act (ERISA)
Medicare Supplement or Medigap policy
37. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.
Adjustable Whole Life policy
Return of Cash Value rider
Annuity Classifications (5 of 5): # of lives
Residual disability rider
38. Receipt whereby coverage incepts immediately upon submission of full consideration - unless declined & premium refunded.
Medicare Part C (aka Medicare Advantage)
Binding receipt (aka Temporary Insurance Agreement)
Basic Medical plan
Non-Occupational Disability policy
39. Potential circumstance that could cause a loss; measured in dollars.
Risk management
Loss exposure
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Relation of Earnings to Insurance provision
40. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.
Single Pay Whole Life policy
Insurable interest
Common Life Exclusions
Phases of an annuity
41. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.
Elimination (aka Waiting) period
Return of Premium rider
Proof of Loss provision
Group Disability plan
42. Written policy terms supersede oral statements made prior to policy issue.
Types of Accident & Health (A&H) providers
Rehabilitation rider
Parole Pardon Rule
Automatic Premium Loan (APL) provision
43. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.
Incontestability clause/provision
Suicide clause/provision
Guaranteed Insurability Life rider
Risk management
44. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.
Grace Period provision
Concealment exceptions
Premium modes
Claim Form (aka Proof of Loss Form) provision
45. Non-qualified Annuity - Non-deductible contributions & tax-deferred growth. At pay-out - tax-free principal but taxable growth.
Medicare Part D
Point of Service plan
Business Continuation (aka Buy-Sell) Disability policy
Tax implications of an Annuity (1 of 2)
46. Provides 24 hr. health coverage both "on" & "off" job - but may cause coverage duplication & coordination challenges.
Renewability provision
Types of reinsurance
Family policy
24 Hour Coverage (CA)
47. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.
Health Maintenance Organization (HMO)
Cost of Living Adjustment (COLA) Disability rider
Business Overhead Expense (BOE) Disability policy
Tax implications of Death Benefit & Cash Value
48. Excludes coverage for specific injury/illness either temporarily or permanently in order to eliminate pre-existing condition.
Impairment (Exclusion) rider
Indemnify
Equity Index Whole Life policy
Civil Rights/Pregnancy Discrimination Act
49. Same as Universal Life but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Variable Universal Life policy
Annuity Classifications (3 of 5): Source of income
Law of Large Numbers
Business Overhead Expense (BOE) Disability policy
50. 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.
Tax implications of Dividends - Loans & Interest
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Levels of Long Term Care provided
Tax implications of Disability policy