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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 which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.






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






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






4. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.






5. Receipt whereby coverage incepts ONLY after underwriting approval.






6. 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.






7. Expands individual WL policy to include Term Life for dependents (spouse - children - etc.).






8. Intentional deception; grounds for rescission.






9. 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;






10. WL policy covering 2 or more Insureds but ONLY payable upon death of LAST Insured - generally low premium but high death benefit.






11. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.






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






13. Same as WL but premium low for 1st 5 yrs. - THEN has annual premium increases for set # yrs. - THEN level premium.






14. 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.






15. Time extension of benefits based on "qualifying" event. 18 mth. extension if laid off or fired; 36 mth. extension if death - divorce or child leaves home.






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






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






18. Provides supplemental coverage for physician/surgeon fees if enrolled (during enrollment period ONLY) & pay monthly premium w/ deductible and co-insurance.






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






20. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.






21. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.






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






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






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






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






26. No-charge annuity w/drawals allowed up to 10% of total - THEN penalized on sliding scale based on # policy yrs.; conditionally waived.






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






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






29. Provides coverage for specific disease(s) - such as cancer or leukemia.






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






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






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






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






34. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.






35. 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.






36. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.






37. Covers entire family w/ WL for breadwinner & (convertible) Level Term for spouse & children (until certain age).






38. 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.






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






40. Provides for continued operation of business if partner dies - by allowing surviving partner(s) to buy deceased partner's interest in business.






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






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






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






44. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.






45. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.






46. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.






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






48. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.






49. Death benefit determined by Insured's projected lost earnings potential.






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







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