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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. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.
Loss of Earnings Test
Basic Medical plan
Law of Large Numbers
Revocable vs. Irrevocable beneficiary
2. Provides disability income during surgery recovery from life-threatening condition (& sometimes cosmetic surgery).
Business Overhead Expense (BOE) Disability policy
Credit Life policy
Transplant/Cosmetic Surgery rider
Partial disability rider
3. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.
Dental Plan
Basic Medical plan
Proof of Loss provision
Settlement options for Life policy (1 of 2)
4. 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.
Joint Life (aka "First to die") policy
Market Value Adjusted (aka Modified Guaranteed) annuity
Notice of Claim provision
Policy loans
5. No deductible coverage for: daily room/board; ancillary costs; surgeon &/or physician expense (for added premium).
Basic Medical plan
Automatic Premium Loan (APL) provision
Estoppel
Insurability Type Conditional receipt
6. Conditional - coverage is conditional; Personal - parties are people; Good faith - honesty/integrity; Fiduciary - req's financial trust.
Suicide clause/provision
Insurance contract characteristics (2 of 2)
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Annuity surrender charges
7. Facultative - case by case agreements; Automatic/Treaty - automatic acceptance of risk percentage per previous agreement.
Retrocession
Notice of Claim provision
Types of reinsurance
Exclusions for Major Medical plan
8. Agreement - Offer & acceptance; Consideration - application + premium; Legal capacity - licensed &/or competent; Legal purpose - public good.
Trusts
Elements to contract
Rate (as defined by CIC)
Market Value Adjusted (aka Modified Guaranteed) annuity
9. 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.
Survivorship (aka "Last to die") policy
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Common Life Exclusions
Legal Action provision
10. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.
Errors & Omissions (E&O)
Misstatement of Age/Sex provision
Return of Cash Value rider
Doctrine of Comity
11. Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling - stock investment).
Pure risk vs. Speculative risk
Term Life policy
Dental Plan
Basic Medical plan
12. Monthly; Quarterly; Semi-annually; Annually (cheapest due to less admin cost).
Premium modes
Elements to contract
Occupational Disability policy
Medicare Part A & B "Gaps"
13. Savings account for medical expenses; Tax-deductible contributions; tax-deferred growth; tax-free for qualified use; taxable for non-qualified use.
Limited Pay Whole Life policy
Legal Action provision
Medical Savings Account (MSA) & Health Savings Account (HSA)
Disability Income policy
14. 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.
Blackout Period
Graded Premium Whole Life policy
Concealment
Equity Indexed annuity
15. Permanent - not recoverable (spinal cord injury); Temporary - recoverable (temp. illness/injury - broken limb).
Permanent vs. Temporary disability
Loss of Earnings Test
Total disability (as commonly defined)
Whole (aka Permanent or Straight) Life policy
16. Intentional OR unintentional failure to disclose material underwriting facts that should have been disclosed; grounds for policy rescission.
Binding receipt (aka Temporary Insurance Agreement)
Rate (as defined by CIC)
Concealment
Indeterminate Premium Whole Life policy
17. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.
Modified Endowment Contract (MEC)
Cost of Living Adjustment (COLA) Life rider
Business Overhead Expense (BOE) Disability policy
Limited Pay Whole Life policy
18. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.
Limited Pay Whole Life policy
Annuity
Key Employee Disability policy
Variable Life policy (2 of 2)
19. Agents - represent Insurer; Brokers - represent themselves & Insured; Solicitors - represent one agent to solicit leads.
Types of Licensed Producers
Concealment
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Family Maintenance policy
20. 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.
Reinsurance
Mortality vs. Morbidity tables
Dividend options
Small Employer Medical Expense plan
21. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).
Transplant/Cosmetic Surgery rider
Applicant Representations vs. Warranties
Estoppel
Types of Insurers (by authorization)
22. Provides benefit during Social Security "black-out" period - up to 1 yr.
Accidental Death & Dismemberment (AD&D) Life policy
Social Security Benefit (Supplement) rider
Palliative vs. Curative care
Experience vs. Community rating in Group Health plan
23. Privately-provided or Medicare-provided (if no private carrier) prescription drug plans for qualified individuals but w/ premium - deductible & co-pay.
Plans A-L of Medical Supplement or Medigap
Medicare Part D
Accidental Death & Dismemberment (AD&D) Life policy
Primary Insurance Amount (PIA)
24. 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
Family or Dependents rider
Requirements to sell variable life products
Joint Life (aka "First to die") policy
25. Allows Term policy conversion to Permanent policy w/out medical exam; must be identical or lower death benefit; based on either attained OR original age.
Dividends
Convertibility provision
Non-Occupational Disability policy
Employer-Administered plan
26. Price of insurance per exposure unit.
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Rate (as defined by CIC)
Permanent vs. Temporary disability
Suicide clause/provision
27. 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
Medical Savings Account (MSA) & Health Savings Account (HSA)
Legal Action provision
Binding receipt (aka Temporary Insurance Agreement)
28. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Accidental Death & Dismemberment (AD&D) Disability rider
Partial disability rider
Basic Medical plan
29. Same as WL but premium low for set # yrs. - THEN premiums vary (+ or -) based on Insurer's investment returns - w/ Gmax.
Convertibility provision
Accidental Death (aka Multiple Indemnity) rider
Indeterminate Premium Whole Life policy
Current Assumption (aka Interest-Sensitive) Whole Life policy
30. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.
Valid life insurance contracts must identify...
Reinsurance
Convertibility provision
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
31. Provides coverage for specific disease(s) - such as cancer or leukemia.
Underwriting risk categories
Transplant/Cosmetic Surgery rider
Accidental Death & Dismemberment (AD&D) Life policy
Dread Disease policy
32. Process which prevents claim denial as a result of false statement or promise (made by Insurer) - which was relied upon by Insured.
Preferred Provider Organization (PPO)
Partial disability rider
Estoppel
Family Maintenance policy
33. 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
Medical Savings Account (MSA) & Health Savings Account (HSA)
Incontestability clause/provision
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Loss exposure
34. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.
Annuity Classifications (3 of 5): Source of income
COBRA Time Limitations
Medical cost containment (aka Managed care)
Modified Premium Whole Life policy
35. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.
Annuity Classifications (5 of 5): # of lives
Whole (aka Permanent or Straight) Life policy
Juvenile Life (aka Jumping Juvenile) policy
Revocable vs. Irrevocable beneficiary
36. 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.
Peril vs. Hazard
Preferred Provider Organization (PPO)
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Premium modes
37. Identical to Incontestable Clause in Life policy.
Time Limit on Certain Defenses provision
Family Maintenance policy
Family or Dependents rider
Requirements to sell variable life products
38. Policy must be delivered w/ original (or copy of same) application attached.
Medicare Supplement or Medigap policy
Family Income policy
Entire Contract provision
Health Maintenance Organization (HMO)
39. 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)
AIDS/HIV discrimination
Types of reinsurance
Considerations in replacing Health insurance
40. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Cash value
Point of Service plan
Common Accident provision
41. 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.
Claim Form (aka Proof of Loss Form) provision
Convertibility provision
Indemnify
Plans A-L of Medical Supplement or Medigap
42. 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.
Rescission
Tax implications of Disability policy
Family or Dependents rider
Applicant Representations vs. Warranties
43. Provides hospital insurance automatically @ age 65 (if FICA qualified) @ no fee but may have deductible & co-pay.
Policy loans
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Primary Insurance Amount (PIA)
Medicare Part A (aka Hospital Insurance or HI)
44. A lapsed policy may be reinstated if not longer than 3-5 yrs. - & proof of insurability re-established - & back premiums + interest paid.
Age Discrimination in Employment Act (ADEA)
Reinstatement provision
Term Life policy
Key Employee policy
45. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.
Business Overhead Expense (BOE) Disability policy
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Cash value
Types of Accident & Health insurance
46. Same as WL but w/ Decreasing Term rider; upon death - pays monthly income for REMAINING term AFTER which pays full death benefit.
Family Income policy
Penalties for violating AIDS/HIV privacy laws
Types of Insurers (miscellaneous)
Residual disability rider
47. 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.
Impairment (Exclusion) rider
Dread Disease policy
Settlement options for Life policy (2 of 2)
Tax implications of an Estate
48. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.
Common Disaster (Simultaneous Death Act) clause/provision
Types of Insurers (by domicile)
Employer Liability
Phases of an annuity
49. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.
Modified Premium Whole Life policy
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Estoppel
Annuity Classifications (3 of 5): Source of income
50. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.
Non-forfeiture options for WL policy
Reinsurance
Settlement options for Life policy (2 of 2)
Types of Accident & Health (A&H) providers