Test your basic knowledge |

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






2. 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.






3. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").






4. Req. by CA statute & may provide workers coverage for action-over claims.






5. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.






6. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).






7. 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.






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






9. Same as WL but premium low for set # yrs. - THEN premiums vary (+ or -) based on Insurer's investment returns - w/ Gmax.






10. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.






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






12. Provides hospital insurance automatically @ age 65 (if FICA qualified) @ no fee but may have deductible & co-pay.






13. Policy must be delivered w/ original (or copy of same) application attached.






14. 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.






15. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.






16. Prepaid med. benefits for "subscribers" @ approved facilities; many non-profit; Blue Cross - Hospital stays; Blue Shield - M.D. costs.






17. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.






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






20. 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.






21. Policy owner has right to determine mode of premium payment but Insurer can charge admin. fee if not annual.






22. An unintentional mistake committed by an insurance representative; may be covered by E&O insurance.






23. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.






24. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)






25. Period of time following any children's survivor benefit & before benefits are provided to employee's widow/widower.






26. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.






27. Premiums determined by target cash values or death benefit; partial cash value w/drawals allowed; transparent policy w/ unbundled premium.






28. Provides 24 hr. health coverage both "on" & "off" job - but may cause coverage duplication & coordination challenges.






29. Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.






30. Unintentional - up to $1 -000 + legal $; Intentional - $1 -000-5 -000 + legal $; If harmful - misdemeanor + up to 1 yr. prison + up to $10 -000.






31. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).






32. Written policy terms supersede oral statements made prior to policy issue.






33. 4: Funds retained by Insurer until w/drawn - interest ONLY paid monthly (taxable); 5: Paid-up immediate annuity.






34. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.






35. 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.






36. Two death benefit options - Option A: death benefit ONLY; Option B: death benefit + cash value; death benefit NOT guaranteed.






37. Potential circumstance that could cause a loss; measured in dollars.






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






39. Identical to Incontestable Clause in Life policy.






40. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).






41. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.






42. Upon death - death benefit is paid + the aggregate of premiums paid to date; add-on to Term policy ONLY.






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






44. Benefits NOT taxable; employer-paid premiums deductible to employer; individual plans not deductible unless over 7 1/2% of adjusted gross income - then excess deductible.






45. Covers disabilities occurring both "on" AND "off" job; "on" job benefits paid in addition to work. comp. - if applicable (i.e. individual plan).






46. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.






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






48. 'The inability to perform ANY reasonable occupation based on education - training or experience'.






49. 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.






50. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.