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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. No-charge annuity w/drawals allowed up to 10% of total - THEN penalized on sliding scale based on # policy yrs.; conditionally waived.
Annuity surrender charges
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Rate (as defined by CIC)
Tax implications of Death Benefit & Cash Value
2. 'The inability to perform your OWN normal occupation or daily duties'.
Premium modes
Parole Pardon Rule
Settlement options for Life policy (1 of 2)
Total disability (as commonly defined)
3. Waives premium on Life policy for minor child until age 21 in event premium payor dies or becomes disabled.
4. Death benefit determined by Insured's financial goals & needs (minus assets).
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Needs approach (most common)
Indemnify
Types of Accident & Health insurance
5. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.
Valid life insurance contracts must identify...
Concealment exceptions
Whole (aka Permanent or Straight) Life policy
Claim Form (aka Proof of Loss Form) provision
6. 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.
Settlement options for Life policy (1 of 2)
Family or Dependents rider
Health Maintenance Organization (HMO)
COBRA Time Limitations
7. 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.
Reinstatement provision
Incontestability clause/provision
Tax implications of an Estate
Plans A-L of Medical Supplement or Medigap
8. 1: Tax-free lump sum; 2: Monthly pay-outs for fixed time; 3: Fixed monthly payments until depleted.
Types of Insurers (by sector)
Settlement options for Life policy (1 of 2)
Misstatement of Age/Sex provision
Medicare Part D
9. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.
Variable Life policy (1 of 2)
Dental Plan
Insuring clause/provision (aka Insuring Agreement)
Blackout Period
10. Policy must be delivered w/ original (or copy of same) application attached.
Dental Plan
Entire Contract provision
Levels of Long Term Care provided
Policy loans
11. 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).
Life insurance policy
Types of Term Life policies
Split Dollar Plan
Limited Pay Whole Life policy
12. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Group Disability plan
Accidental Death & Dismemberment (AD&D) Life policy
Basic Medical plan
Tax implications of an Annuity (1 of 2)
13. Allows policy owner to w/draw set % of death benefit upon verification of terminal illness w/ expectancy 12-24 mths.; generally tax-free.
Preferred Provider Organization (PPO)
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Current Assumption (aka Interest-Sensitive) Whole Life policy
Medicaid/Medi-Cal
14. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.
Types of Agency Authority
Levels of Long Term Care provided
Legal Action provision
Current Assumption (aka Interest-Sensitive) Whole Life policy
15. The state in which the contract is accepted or delivered is the state that possesses regulatory jurisdiction over Group plan.
Payment of Premium provision
Payor (aka Waiver of Payor's Premium) rider
Doctrine of Comity
Fraud
16. Dependent children are covered until 19 or 23 (full-time student only) or until self-sufficient (if handicapped).
Types of Agency Authority
Types of Insurers (by ownership)
Dependent coverage
Medical cost containment (aka Managed care)
17. Beneficiary has right to leave death benefits / Insurer to protect $ from creditors; interest (taxable) paid on retained funds.
Conformity with State Statute provision
Group Disability plan
Spendthrift provision
Medical Savings Account (MSA) & Health Savings Account (HSA)
18. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.
Key Employee policy
Suicide clause/provision
Change of Occupation provision
Insurer (as defined by CIC)
19. Domestic - within home state; Foreign - outside home state; Alien - outside home country.
Age Discrimination in Employment Act (ADEA)
Types of Agency Authority
Types of Insurers (by domicile)
Proof of Loss provision
20. No deductible coverage for: daily room/board; ancillary costs; surgeon &/or physician expense (for added premium).
Misstatement of Age/Sex provision
Types of Medical Plans
Workers' Compensation insurance
Basic Medical plan
21. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.
Rehabilitation rider
Types of Licensed Producers
Payment of Premium provision
Medi-Cal Share Cost plan
22. Federal law which prohibits companies w/ 15+ employees from decreasing coverage benefits for women affected by pregnancy or childbirth.
Civil Rights/Pregnancy Discrimination Act
Payment of Premium provision
Settlement options for Life policy (2 of 2)
Binding receipt (aka Temporary Insurance Agreement)
23. 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.
Misstatement of Age/Sex provision
IRS Penalties for Annuities
Occupational Disability policy
Preferred Provider Organization (PPO)
24. Policy provisions must conform to state regulations where policy is sold.
Dividend options
Employee Retirement Income Security Act (ERISA)
Factors that determine premium
Conformity with State Statute provision
25. Expands individual WL policy to include Term Life for dependents (spouse - children - etc.).
Accidental Death & Dismemberment (AD&D) Life policy
Family or Dependents rider
Medicaid/Medi-Cal
Change of Occupation provision
26. Savings account for medical expenses; Tax-deductible contributions; tax-deferred growth; tax-free for qualified use; taxable for non-qualified use.
Medical Savings Account (MSA) & Health Savings Account (HSA)
Considerations in replacing Health insurance
Types of Licensed Producers
Relation of Earnings to Insurance provision
27. Info already known; Info that should have been known; Waived info; Irrelevant info.
Concealment exceptions
Needs approach (most common)
Long Term Care (LTC) policy
Modified Endowment Contract (MEC)
28. Provides % of monthly income benefit if Insured becomes disabled due to illness or accident.
Supplemental Major Medical plan
Elements to contract
Disability Income policy
Accidental Death (aka Multiple Indemnity) rider
29. Reappearance of disability w/in 6 mth. period after "recovery" from same disability is considered recurrence - not new disability.
Policy delivery
Misstatement of Age/Sex provision
Return of Premium rider
Recurrent disability clause/provision
30. Combination of Basic Medical & Major Medical in one policy; Basic pays 1st - then Major Medical w/ corridor deductible.
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Market Value Adjusted (aka Modified Guaranteed) annuity
Comprehensive Major Medical plan
Policy delivery
31. 4: Funds retained by Insurer until w/drawn - interest ONLY paid monthly (taxable); 5: Paid-up immediate annuity.
Market Value Adjusted (aka Modified Guaranteed) annuity
Tax implications of an Annuity (1 of 2)
Departments of an Insurer
Settlement options for Life policy (2 of 2)
32. Fixed premium w/ guaranteed min. death benefit that may increase due to higher than expected investment returns.
Variable Life policy (2 of 2)
1035 Exchange
Phases of an annuity
Waiver of Premium (Waiver of Cost of Insurance) rider
33. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.
Cost of Living Adjustment (COLA) Life rider
Levels of Long Term Care provided
Annuity Classifications (5 of 5): # of lives
Preferred Provider Organization (PPO)
34. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.
Tax implications of Disability policy
Medicaid/Medi-Cal
Business Overhead Expense (BOE) Disability policy
Factors that determine premium
35. Must be delivered in person or by certified - registered or 1st-class mail w/ signature - unless waived by Insurance Commissioner.
Pure risk vs. Speculative risk
Blackout Period
Departments of an Insurer
Policy delivery
36. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.
Loss exposure
Term Life policy
Total disability (as commonly defined)
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
37. 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.
Medicare Supplement or Medigap policy
Tax implications of an Estate
Blackout Period
Valid life insurance contracts must identify...
38. Provides coverage for specific disease(s) - such as cancer or leukemia.
Dread Disease policy
Concealment exceptions
Health Reimbursement Account (HRA)
Considerations in replacing Health insurance
39. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.
Types of Accident & Health insurance
Rescission
Total disability (any-occupational definition)
Annuity Classifications (2 of 5): When benefits begin
40. 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
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Employer-Administered plan
Juvenile Life (aka Jumping Juvenile) policy
41. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).
Dividends
Insurable interest
Limited Pay Whole Life policy
Family Income policy
42. Non-qualified Annuity - Non-deductible contributions & tax-deferred growth. At pay-out - tax-free principal but taxable growth.
Tax implications of an Annuity (1 of 2)
Pure risk vs. Speculative risk
Medical cost containment (aka Managed care)
Types of Insurers (by authorization)
43. Same as WL but w/ Level Term rider; upon death - pays monthly income for FULL term AFTER which pays full death benefit.
Types of Agency Authority
Convertibility provision
Medicaid/Medi-Cal
Family Maintenance policy
44. 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
45. Receipt whereby coverage incepts ONLY after underwriting approval.
Rate (as defined by CIC)
Total disability (more restrictive definition)
Approval Type Conditional receipt
Insurability Type Conditional receipt
46. Same as WL but premium low for 1st 5 yrs. - THEN has annual premium increases for set # yrs. - THEN level premium.
Dividend options
Approval Type Conditional receipt
Elimination (aka Waiting) period
Graded Premium Whole Life policy
47. Unilateral - Insurer provides contract; Adhesion - parties must adhere to terms; Aleatory - benefits may not inure equally.
Tax implications of Death Benefit & Cash Value
Automatic Premium Loan (APL) provision
Dental Plan
Insurance contract characteristics (1 of 2)
48. If Insured changes to: more hazardous job - benefits reduced; less hazardous job - premiums reduce.
Change of Occupation provision
Recurrent disability clause/provision
Modified Endowment Contract (MEC)
Reinsurance
49. A lapsed policy may be reinstated if not longer than 3-5 yrs. - & proof of insurability re-established - & back premiums + interest paid.
Binding receipt (aka Temporary Insurance Agreement)
Total disability (as commonly defined)
Occupational Disability policy
Reinstatement provision
50. Covers disabilities occurring ONLY "off" job; benefits do not overlap work. comp. (i.e. Group plan).
Non-Occupational Disability policy
Needs approach (most common)
Proof of Loss provision
Claim Form (aka Proof of Loss Form) provision