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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. Same as WL but can be "paid-up" early by paying larger premium for shorter payment period (i.e. 10 Pay Life - 20 Pay Life).
Spendthrift provision
Limited Pay Whole Life policy
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Dividend options
2. Potential circumstance that could cause a loss; measured in dollars.
Cross Purchase Plan
Types of Accident & Health (A&H) providers
Whole (aka Permanent or Straight) Life policy
Loss exposure
3. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.
Payor (aka Waiver of Payor's Premium) rider
Peril vs. Hazard
Accidental Death (aka Multiple Indemnity) rider
Cross Purchase Plan
4. Refund of 50-80% of premium (minus claims paid) every 5-10 yrs. OR age 65; expensive!
1035 Exchange
Exclusions for Major Medical plan
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Return of Premium rider
5. Same as WL but w/ adjustable death benefit (& corresponding premium) & over-fund option but w/ annually renewable term (ART).
Term Life policy
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Tax implications of an Estate
Requirements to sell variable life products
6. Facultative - case by case agreements; Automatic/Treaty - automatic acceptance of risk percentage per previous agreement.
Types of reinsurance
Total disability (as commonly defined)
Modified Premium Whole Life policy
Health Maintenance Organization (HMO)
7. Part A - Inpatient hospital deductibles vary on # of days; limited reserve days; finite benefit; 1st 3 pints blood; Part B - 20% co-payment.
CHAMPUS (aka TriCare)
Medicare Part A & B "Gaps"
Credit Life policy
Major Medical plan
8. Treating or mitigating loss exposures through 1: avoidance; 2: retention (deductibles); 3: sharing; 4: reduction; or 5: transfer.
Conformity with State Statute provision
Risk management
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Factors that determine premium
9. 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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10. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.
Annuity
Insuring clause/provision (aka Insuring Agreement)
Supplemental Major Medical plan
Medicare Part D
11. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).
Dividends
Policy delivery
Limited Pay Whole Life policy
Cost of Living Adjustment (COLA) Life rider
12. 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.
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Workers' Compensation insurance
Return of Premium rider
Partial disability rider
13. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.
Major Medical plan
Employer Liability
Risk management
Juvenile Life (aka Jumping Juvenile) policy
14. 'The inability to perform ANY reasonable occupation based on education - training or experience'.
Tax implications of Death Benefit & Cash Value
Fraud
Equity Index Whole Life policy
Total disability (more restrictive definition)
15. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).
Elements to contract
Suicide clause/provision
1035 Exchange
Variable Life policy (1 of 2)
16. Prepaid med. benefits for "subscribers" @ approved facilities; many non-profit; Blue Cross - Hospital stays; Blue Shield - M.D. costs.
Common Life Exclusions
Residual disability rider
Current Assumption (aka Interest-Sensitive) Whole Life policy
Blue Cross/Blue Shield
17. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.
Juvenile Life (aka Jumping Juvenile) policy
Flexible Spending Account (FSA)
Incontestability clause/provision
Tax implications of Death Benefit & Cash Value
18. Same as WL but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
1035 Exchange
Variable Life policy (1 of 2)
Insurable interest
Errors & Omissions (E&O)
19. Responsible adult trustee designated to manage death benefits for minor child beneficiary until adulthood.
Trusts
Guaranteed Insurability Life rider
Medicare
Joint Life (aka "First to die") policy
20. Dependent children are covered until 19 or 23 (full-time student only) or until self-sufficient (if handicapped).
Dependent coverage
Common Disaster (Simultaneous Death Act) clause/provision
Variable Universal Life policy
Needs approach (most common)
21. Policy owner must notify Insurer of loss either in writing - in person or by phone w/in 20 days.
Waiver of Premium (Waiver of Cost of Insurance) rider
Plans A-L of Medical Supplement or Medigap
Reinsurance
Notice of Claim provision
22. Group plan initially self-funded by employer (like SIR); after which - group plan Insurer covers (up to policy limit); requires TPA.
Annuity Classifications (1 of 5): How premium is paid
Employer-Administered plan
Medicaid/Medi-Cal
Common Disaster (Simultaneous Death Act) clause/provision
23. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.
Social Security Benefit (Supplement) rider
Key Employee policy
Whole (aka Permanent or Straight) Life policy
Needs approach (most common)
24. 1: Tax-free lump sum; 2: Monthly pay-outs for fixed time; 3: Fixed monthly payments until depleted.
Change of Occupation provision
Types of Accident & Health insurance
Binding receipt (aka Temporary Insurance Agreement)
Settlement options for Life policy (1 of 2)
25. 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.
Beneficiary provisions
Annuity surrender charges
Retrocession
Non-forfeiture options for WL policy
26. No coverage for injuries while: 1: @ voluntary social event; 2: self-inflicted (intentional); 3: under alcohol/drug influence; 4: committing criminal act; 5: aggressor in workplace fight; 6: participating in athletic event (non-pro. athletes) 7: par
Time Limit on Certain Defenses provision
Types of Agency Authority
Return of Cash Value rider
Exclusions to Work. Comp.
27. Federally-funded but state-run program for truly indigent individuals & families providing medical care at Federal clinic.
Elimination (aka Waiting) period
Medicaid/Medi-Cal
Policy loans
Flexible Spending Account (FSA)
28. Employer w/ 25 or less employees must offer all eligible employees @ least 2 medical plan options where pre-existing conditions can't be excluded more than 1 yr.
Small Employer Medical Expense plan
24 Hour Coverage (CA)
Preferred Provider Organization (PPO)
Peril vs. Hazard
29. Expands individual WL policy to include Term Life for dependents (spouse - children - etc.).
Elimination (aka Waiting) period
Pure risk vs. Speculative risk
Blackout Period
Family or Dependents rider
30. Qualified Annuity - Tax-deductible contributions & tax-deferred growth but fully taxable w/drawals.
Tax implications of an Annuity (1 of 2)
Juvenile Life (aka Jumping Juvenile) policy
Considerations in replacing Health insurance
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
31. Fixed premium w/ guaranteed min. death benefit that may increase due to higher than expected investment returns.
Variable Life policy (2 of 2)
Indemnify
Point of Service plan
Trial Application (aka Request for Offer)
32. 'The inability to perform ANY gainful occupation'.
Binding receipt (aka Temporary Insurance Agreement)
Total disability (any-occupational definition)
Pure risk vs. Speculative risk
Free Look provision
33. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.
Medical Savings Account (MSA) & Health Savings Account (HSA)
Reinsurance
Dental Plan
Health Reimbursement Account (HRA)
34. Temp. coverage for set duration w/ death benefit ONLY (no cash value) - offers largest $ for lowest premium; renewable; convertible.
Applicant Representations vs. Warranties
Term Life policy
Loss of Earnings Test
Needs approach (most common)
35. If Insured changes to: more hazardous job - benefits reduced; less hazardous job - premiums reduce.
Change of Occupation provision
Exclusions for Major Medical plan
Spendthrift provision
Medi-Cal Share Cost plan
36. Plan A is the CORE benefit & is least expensive; All other plans include Plan A + additional benefits. Plans F & J are high deductible. K & L are both deductible & co-pay plans.
Family Income policy
Settlement options for Life policy (2 of 2)
Split Dollar Plan
Plans A-L of Medical Supplement or Medigap
37. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.
Premium modes
Adjustable Whole Life policy
Primary Insurance Amount (PIA)
Beneficiary provisions
38. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.
Cash value
Medicare Part A (aka Hospital Insurance or HI)
Residual disability rider
Types of Accident & Health (A&H) providers
39. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.
Tax implications of medical plans
Errors & Omissions (E&O)
Doctrine of Comity
Types of Renewability provisions
40. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.
7 Pay Test
Proof of Loss provision
Group Disability plan
Exclusions to Work. Comp.
41. Same as WL but cash value increases @ current interest rates (not set); premium can start low or high & may change.
Palliative vs. Curative care
Current Assumption (aka Interest-Sensitive) Whole Life policy
Types of hazards
Single Pay Whole Life policy
42. Premiums determined by target cash values or death benefit; partial cash value w/drawals allowed; transparent policy w/ unbundled premium.
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Insurer (as defined by CIC)
Current Assumption (aka Interest-Sensitive) Whole Life policy
43. Provides for continued operation of business if partner dies - by allowing surviving partner(s) to buy deceased partner's interest in business.
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Binding receipt (aka Temporary Insurance Agreement)
Medicare Part C (aka Medicare Advantage)
Business Continuation (aka Buy-Sell) policy
44. Policy provisions must conform to state regulations where policy is sold.
Health Maintenance Organization (HMO)
Conformity with State Statute provision
Levels of Long Term Care provided
Common Disaster (Simultaneous Death Act) clause/provision
45. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.
Departments of an Insurer
Annuity Classifications (2 of 5): When benefits begin
Cost of Living Adjustment (COLA) Life rider
Long Term Care (LTC) policy
46. 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.
Palliative vs. Curative care
Market Value Adjusted (aka Modified Guaranteed) annuity
Earned vs. Unearned premium
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
47. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.
Law of Large Numbers
CA Work. Comp. Statutes
Cross Purchase Plan
Insurer (as defined by CIC)
48. Prepaid med. benefits for members ONLY w/ approved primary care M.D. (HMO employee); focus on preventative care; low co-pay.
Health Maintenance Organization (HMO)
Primary Insurance Amount (PIA)
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Renewability provision
49. Federally-sponsored health care for individuals 65+ &/or w/ certain disabilities; may run concurrent w/ group plan but group plan would act primary - THEN Medicare.
Exclusions for Major Medical plan
Insurance contract characteristics (1 of 2)
Medicare
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
50. 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.
Return of Premium rider
Tax implications of an Estate
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Family Income policy