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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
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. Savings account for medical expenses; Tax-deductible contributions; tax-deferred growth; tax-free for qualified use; taxable for non-qualified use.
Dependent coverage
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Medical Savings Account (MSA) & Health Savings Account (HSA)
Guaranteed Insurability Life rider
2. PURELY employer-funded account to reimburse employees for qualified medical expenses not covered by group health plan.
Renewability provision
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Experience vs. Community rating in Group Health plan
Health Reimbursement Account (HRA)
3. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.
Types of Accident & Health (A&H) providers
Applicant Representations vs. Warranties
Trial Application (aka Request for Offer)
Workers' Compensation insurance
4. No deductible coverage for: daily room/board; ancillary costs; surgeon &/or physician expense (for added premium).
Business Overhead Expense (BOE) Disability policy
Types of Term Life policies
Basic Medical plan
Accidental Death & Dismemberment (AD&D) Disability rider
5. Permanent disability due to total loss of sight - hearing - speech or use of 2 + limbs; benefits paid even while continuing to work.
Presumptive disability
Recurrent disability clause/provision
CHAMPUS (aka TriCare)
Entire Contract provision
6. Coverage for catastrophic loss w/ high limits - front end deductible; co-insurance (80/20%); blanket coverage; stop loss max.
Exclusions to Work. Comp.
Major Medical plan
Trusts
Elimination (aka Waiting) period
7. Basic Medical; Major Medical; Comprehensive Major Medical
Credit Life policy
Types of Medical Plans
Medicare
Reinstatement provision
8. 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
Binding receipt (aka Temporary Insurance Agreement)
Medicare Part C (aka Medicare Advantage)
Guaranteed Insurability Life rider
9. 'The inability to perform your OWN normal occupation or daily duties'.
Total disability (as commonly defined)
Departments of an Insurer
Free Look provision
Annuity Classifications (5 of 5): # of lives
10. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Medical cost containment (aka Managed care)
Time Limit on Certain Defenses provision
Split Dollar Plan
Group Disability plan
11. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Business Continuation (aka Buy-Sell) Disability policy
Cost of Living Adjustment (COLA) Life rider
Cross Purchase Plan
12. Mortality is the statistical possibility of death @ each age. Morbidity is the statistical possibility & extent of disability @ each age.
Permanent vs. Temporary disability
Types of Insurers (by domicile)
Annuity Classifications (1 of 5): How premium is paid
Mortality vs. Morbidity tables
13. Waives premium on Life policy for minor child until age 21 in event premium payor dies or becomes disabled.
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14. Federal law which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.
Types of Accident & Health insurance
Age Discrimination in Employment Act (ADEA)
IRS Penalties for Annuities
Family Maintenance policy
15. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.
Misstatement of Age/Sex provision
Preferred Provider Organization (PPO)
Impairment (Exclusion) rider
Modified Endowment Contract (MEC)
16. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.
Health Insurance Portability and Accountability Act (HIPAA)
Annuity Classifications (5 of 5): # of lives
Tax implications of Dividends - Loans & Interest
Palliative vs. Curative care
17. Representation - oral or written statement made to best of knowledge or belief; Warranty - statement guaranteed/presumed/understood to be true.
Elements to contract
Applicant Representations vs. Warranties
Loss exposure
Insurability Type Conditional receipt
18. Written policy terms supersede oral statements made prior to policy issue.
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Waiver of Premium provision
Parole Pardon Rule
Preferred Provider Organization (PPO)
19. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.
Types of reinsurance
Annuity Classifications (3 of 5): Source of income
Claim Form (aka Proof of Loss Form) provision
Valid life insurance contracts must identify...
20. Insured can seek legal action against Insurer for denial of claim only after 60 days and up to 3 yrs. after providing proof of loss.
Reinsurance
Pure risk vs. Speculative risk
Legal Action provision
Waiver of Premium (Waiver of Cost of Insurance) rider
21. Provides supplemental coverage for physician/surgeon fees if enrolled (during enrollment period ONLY) & pay monthly premium w/ deductible and co-insurance.
Pure risk vs. Speculative risk
CA Work. Comp. Statutes
Settlement options for Life policy (2 of 2)
Medicare Part B (aka Supplemental Medical Insurance or SMI)
22. Same as WL but w/ Decreasing Term rider; upon death - pays monthly income for REMAINING term AFTER which pays full death benefit.
Underwriting risk categories
CHAMPUS (aka TriCare)
Family Income policy
Requirements to sell variable life products
23. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.
Annuity
Single Pay Whole Life policy
Time Limit on Certain Defenses provision
Types of Insurers (by sector)
24. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.
Suicide clause/provision
Types of Agency Authority
Long Term Care (LTC) policy
Types of Renewability provisions
25. War; elective cosmetic surgery; routine dental; work. comp.-covered claims; self-inflicted (intentional); gov't. facility treatment; LTC; private nursing.
Types of Insurers (by sector)
CHAMPUS (aka TriCare)
Point of Service plan
Exclusions for Major Medical plan
26. Same as WL but premium low for 1st 5 yrs. - THEN has annual premium increases for set # yrs. - THEN level premium.
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Accidental Death & Dismemberment (AD&D) Life policy
Approval Type Conditional receipt
Graded Premium Whole Life policy
27. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.
Reinstatement provision
Impairment (Exclusion) rider
7 Pay Test
Return of Premium rider
28. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.
Revocable vs. Irrevocable beneficiary
Cost of Living Adjustment (COLA) Life rider
Proof of Loss provision
Indemnify
29. Group plan initially self-funded by employer (like SIR); after which - group plan Insurer covers (up to policy limit); requires TPA.
Key Employee Disability policy
Employer-Administered plan
Free Look provision
Guaranteed Insurability Life rider
30. 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.
Current Assumption (aka Interest-Sensitive) Whole Life policy
Joint Life (aka "First to die") policy
Tax implications of Disability policy
Loss of Earnings Test
31. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.
Common Life Exclusions
Renewability provision
Cross Purchase Plan
Health Maintenance Organization (HMO)
32. Process whereby a reinsurer reinsures w/ another reinsurer.
Types of Licensed Producers
Dental Plan
Loss of Earnings Test
Retrocession
33. Provides disability income during surgery recovery from life-threatening condition (& sometimes cosmetic surgery).
Common Disability Exclusions
Tax implications of Death Benefit & Cash Value
Employer Liability
Transplant/Cosmetic Surgery rider
34. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.
Employee Retirement Income Security Act (ERISA)
Estoppel
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Disability Income policy
35. Mathematical law stating the larger # of occurrences - the more predictable the losses; used to calculate premiums.
Payment of Premium provision
Law of Large Numbers
Concealment
Equity Indexed annuity
36. Refund of 50-80% of premium (minus claims paid) every 5-10 yrs. OR age 65; expensive!
Types of Insurers (by sector)
COBRA Time Limitations
Return of Premium rider
Flexible Spending Account (FSA)
37. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).
Types of Insurers (by ownership)
Loss of Earnings Test
Credit Life policy
Types of Licensed Producers
38. Excludes coverage for specific injury/illness either temporarily or permanently in order to eliminate pre-existing condition.
Impairment (Exclusion) rider
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Occupational Disability policy
Recurrent disability clause/provision
39. Benefits automatically increase annually based on inflationary index (i.e. Consumer Price Index) OR flat rate (5% max.).
Disability Income policy
Cost of Living Adjustment (COLA) Disability rider
Medi-Cal Share Cost plan
Human Life Value approach
40. 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.
Supplemental Major Medical plan
Concealment
Employer Liability
Partial disability rider
41. Receipt whereby coverage incepts immediately upon submission of full consideration - unless declined & premium refunded.
Mortality vs. Morbidity tables
Business Continuation (aka Buy-Sell) Disability policy
Binding receipt (aka Temporary Insurance Agreement)
Business Overhead Expense (BOE) Disability policy
42. 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.
CA Work. Comp. Statutes
Cost of Living Adjustment (COLA) Life rider
Annuity surrender charges
Return of Cash Value rider
43. Covers entire family w/ WL for breadwinner & (convertible) Level Term for spouse & children (until certain age).
Mortality vs. Morbidity tables
Business Continuation (aka Buy-Sell) policy
Accidental Death (aka Multiple Indemnity) rider
Family policy
44. Prohibited w/ regard to testing for people of same class; test results must remain confidential; coverage may be declined (once discovered).
AIDS/HIV discrimination
Family Maintenance policy
Convertibility provision
Tax implications of an Estate
45. Unintentional - up to $1 -000 + legal $; Intentional - $1 -000-5 -000 + legal $; If harmful - misdemeanor + up to 1 yr. prison + up to $10 -000.
Penalties for violating AIDS/HIV privacy laws
Accidental Death & Dismemberment (AD&D) Life policy
Medicare Part D
Family policy
46. Level - fixed death benefit - premium fixed until renewal; Decreasing - death benefit decreases over term - premium fixed until renewal; Increasing - death benefit increases over term - premium fixed until renewal.
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Accidental Death (aka Multiple Indemnity) rider
AIDS/HIV discrimination
Types of Term Life policies
47. Provides benefit during Social Security "black-out" period - up to 1 yr.
Change of Occupation provision
Total disability (more restrictive definition)
Social Security Benefit (Supplement) rider
Exclusions to Work. Comp.
48. The state in which the contract is accepted or delivered is the state that possesses regulatory jurisdiction over Group plan.
Medical cost containment (aka Managed care)
Health Reimbursement Account (HRA)
Doctrine of Comity
Suicide clause/provision
49. Dividends are NOT taxable but interest is. Loan interest is NOT tax-deductible. Interest paid by Insurer on retained funds is taxable.
Tax implications of Dividends - Loans & Interest
Common Disability Exclusions
Total disability (as commonly defined)
Single Pay Whole Life 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.
Business Overhead Expense (BOE) Disability policy
Accidental Death (aka Multiple Indemnity) rider
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Automatic Premium Loan (APL) provision
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