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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. Life license + NASD (FINRA) Series 6 or 7.
Indeterminate Premium Whole Life policy
Requirements to sell variable life products
Elements to contract
Tax implications of Dividends - Loans & Interest
2. 'The inability to perform ANY gainful occupation'.
Total disability (any-occupational definition)
Tax implications of medical plans
Permanent vs. Temporary disability
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
3. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Types of Renewability provisions
Types of Insurers (by ownership)
Small Employer Medical Expense plan
4. 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
Rehabilitation rider
Variable Life policy (2 of 2)
5. 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.
Market Value Adjusted (aka Modified Guaranteed) annuity
Presumptive disability
Common Accident provision
Long Term Care (LTC) policy
6. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.
Free Look provision
Types of Insurers (by ownership)
Risk management
Palliative vs. Curative care
7. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.
Medicare Part C (aka Medicare Advantage)
Revocable vs. Irrevocable beneficiary
Accidental Death (aka Multiple Indemnity) rider
Phases of an annuity
8. 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.
Preferred Provider Organization (PPO)
Term Life policy
Social Security Benefit (Supplement) rider
Doctrine of Comity
9. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.
Dental Plan
Business Continuation (aka Buy-Sell) policy
CA Work. Comp. Statutes
Payment of Premium provision
10. Policy provisions must conform to state regulations where policy is sold.
Plans A-L of Medical Supplement or Medigap
Current Assumption (aka Interest-Sensitive) Whole Life policy
Types of Insurers (by authorization)
Conformity with State Statute provision
11. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.
Business Continuation (aka Buy-Sell) Disability policy
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Variable Life policy (1 of 2)
Flexible Spending Account (FSA)
12. An unintentional mistake committed by an insurance representative; may be covered by E&O insurance.
Insurance contract characteristics (2 of 2)
Impairment (Exclusion) rider
Trusts
Errors & Omissions (E&O)
13. Intentional deception; grounds for rescission.
Supplemental Major Medical plan
Fraud
Valid life insurance contracts must identify...
Settlement options for Life policy (2 of 2)
14. Physical - slippery floor; Moral - dishonest acts; Morale - carelessness or recklessness.
Cross Purchase Plan
Concealment
Types of hazards
Policy delivery
15. Combination of Basic Medical & Major Medical in one policy; Basic pays 1st - then Major Medical w/ corridor deductible.
Comprehensive Major Medical plan
CHAMPUS (aka TriCare)
Medicare Part A (aka Hospital Insurance or HI)
Types of Medical Plans
16. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.
Joint Life (aka "First to die") policy
Trial Application (aka Request for Offer)
Parole Pardon Rule
Insurer (as defined by CIC)
17. 4: Funds retained by Insurer until w/drawn - interest ONLY paid monthly (taxable); 5: Paid-up immediate annuity.
Variable Life policy (2 of 2)
Settlement options for Life policy (2 of 2)
Employee Retirement Income Security Act (ERISA)
Insurable interest
18. A&H - A&S - Sickness only; Medical; Disability; Accident only; Travel accident; LTC; Medicare supplement; AD&D; Dental/Vision/Prescription; Limited.
Non-forfeiture options for WL policy
CA Work. Comp. Statutes
Cost of Living Adjustment (COLA) Life rider
Types of Accident & Health insurance
19. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.
Annuity Classifications (5 of 5): # of lives
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Payment of Premium provision
Departments of an Insurer
20. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.
Renewability provision
Types of Term Life policies
Business Continuation (aka Buy-Sell) Disability policy
Adjustable Whole Life policy
21. 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.
Misstatement of Age/Sex provision
Penalties for violating AIDS/HIV privacy laws
Valid life insurance contracts must identify...
Entire Contract provision
22. Mathematical law stating the larger # of occurrences - the more predictable the losses; used to calculate premiums.
Law of Large Numbers
Tax implications of an Annuity (1 of 2)
Credit Life policy
Payor (aka Waiver of Payor's Premium) rider
23. Death benefit determined by Insured's projected lost earnings potential.
CHAMPUS (aka TriCare)
Phases of an annuity
Rehabilitation rider
Human Life Value approach
24. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.
Fraud
Elimination (aka Waiting) period
Insurance contract characteristics (2 of 2)
COBRA Time Limitations
25. Intentional OR unintentional failure to disclose material underwriting facts that should have been disclosed; grounds for policy rescission.
Tax implications of an Estate
AIDS/HIV discrimination
Market Value Adjusted (aka Modified Guaranteed) annuity
Concealment
26. PURELY employer-funded account to reimburse employees for qualified medical expenses not covered by group health plan.
Transplant/Cosmetic Surgery rider
Health Reimbursement Account (HRA)
Total disability (more restrictive definition)
Medicare Supplement or Medigap policy
27. 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.
Types of Term Life policies
Types of Insurers (by domicile)
Requirements to sell variable life products
7 Pay Test
28. Grows @ fixed min. interest rate but w/ possible higher rate tied to equity index (i.e S&P Equity Index) appreciation; gains shared w/ Insurer.
Time Limit on Certain Defenses provision
Workers' Compensation insurance
Claim Form (aka Proof of Loss Form) provision
Equity Indexed annuity
29. Provides disability income during surgery recovery from life-threatening condition (& sometimes cosmetic surgery).
Cost of Living Adjustment (COLA) Disability rider
Transplant/Cosmetic Surgery rider
Change of Occupation provision
Annuity Classifications (5 of 5): # of lives
30. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.
Free Look provision
Settlement options for Life policy (2 of 2)
Penalties for violating AIDS/HIV privacy laws
Experience vs. Community rating in Group Health plan
31. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.
Adjustable Whole Life policy
Factors that determine premium
Accidental Death & Dismemberment (AD&D) Life policy
Insurance contract characteristics (1 of 2)
32. Same as Universal Life but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Comprehensive Major Medical plan
Variable Universal Life policy
Tax implications of an Annuity (1 of 2)
Approval Type Conditional receipt
33. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.
Return of Premium rider
Claim Form (aka Proof of Loss Form) provision
Annuity Classifications (5 of 5): # of lives
Accidental Death & Dismemberment (AD&D) Life policy
34. 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
Equity Indexed annuity
Health Insurance Portability and Accountability Act (HIPAA)
AIDS/HIV discrimination
35. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.
Types of Renewability provisions
Current Assumption (aka Interest-Sensitive) Whole Life policy
Types of Medical Plans
Types of Accident & Health (A&H) providers
36. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.
Accidental Death (aka Multiple Indemnity) rider
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Plans A-L of Medical Supplement or Medigap
Cost of Living Adjustment (COLA) Life rider
37. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.
Term Life policy
Juvenile Life (aka Jumping Juvenile) policy
Rehabilitation rider
Insurable interest
38. Qualified Annuity - Tax-deductible contributions & tax-deferred growth but fully taxable w/drawals.
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Life insurance policy
Variable Life policy (2 of 2)
Tax implications of an Annuity (1 of 2)
39. Facultative - case by case agreements; Automatic/Treaty - automatic acceptance of risk percentage per previous agreement.
Spendthrift provision
Time Limit on Certain Defenses provision
Tax implications of an Annuity (1 of 2)
Types of reinsurance
40. Non-qualified Annuity - Non-deductible contributions & tax-deferred growth. At pay-out - tax-free principal but taxable growth.
Proof of Loss provision
Departments of an Insurer
Tax implications of an Annuity (1 of 2)
Enhanced Ordinary (aka Extraordinary) Whole Life policy
41. Policy owner must notify Insurer of loss either in writing - in person or by phone w/in 20 days.
Presumptive disability
Major Medical plan
Concealment
Notice of Claim provision
42. 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).
Convertibility provision
Limited Pay Whole Life policy
Family or Dependents rider
Credit Life policy
43. Waives premium upon disability of Insured until return to work; disability must persist for 90 days or longer; 1st 90 day premiums refunded after 90 days.
Family Income policy
Common Life Exclusions
Reinsurance
Waiver of Premium provision
44. Basic Medical; Major Medical; Comprehensive Major Medical
Medicare Part D
Types of Medical Plans
Tax implications of Disability policy
Business Continuation (aka Buy-Sell) policy
45. 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
Comprehensive Major Medical plan
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Loss of Earnings Test
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
46. Allows for Term policy renewal @ higher premium w/out medical exam; guarantees insurability; based on actual/attained age.
Renewability provision
Juvenile Life (aka Jumping Juvenile) policy
Group Disability plan
Reinstatement provision
47. Provides coverage for specific disease(s) - such as cancer or leukemia.
Waiver of Premium provision
Medical Savings Account (MSA) & Health Savings Account (HSA)
Employer-Administered plan
Dread Disease policy
48. Govt. organization providing health care benefits for dependents of military personnel.
CHAMPUS (aka TriCare)
Key Employee Disability policy
Adverse selection
Employer-Administered plan
49. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.
Term Life policy
Rescission
Elimination (aka Waiting) period
Considerations in replacing Health insurance
50. Covers disabilities occurring both "on" AND "off" job; "on" job benefits paid in addition to work. comp. - if applicable (i.e. individual plan).
Occupational Disability policy
Graded Premium Whole Life policy
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Employee Retirement Income Security Act (ERISA)