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. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.






2. Responsible adult trustee designated to manage death benefits for minor child beneficiary until adulthood.






3. Agreement - Offer & acceptance; Consideration - application + premium; Legal capacity - licensed &/or competent; Legal purpose - public good.






4. 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.






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






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






7. 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.






8. Basic Medical; Major Medical; Comprehensive Major Medical






9. War; elective cosmetic surgery; routine dental; work. comp.-covered claims; self-inflicted (intentional); gov't. facility treatment; LTC; private nursing.






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






11. Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling - stock investment).






12. No-cost provision that authorizes Insurer to borrow from cash value to pay unpaid premiums after grace period; must ask for @ app. time.






13. 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.






14. The state in which the contract is accepted or delivered is the state that possesses regulatory jurisdiction over Group plan.






15. WL policy covering 2 or more Insureds but ONLY payable upon death of LAST Insured - generally low premium but high death benefit.






16. Waives premium on Life policy for minor child until age 21 in event premium payor dies or becomes disabled.

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






18. Provides professional services - rehabilitation - training/re-training & related costs to assist Insured in returning to work.






19. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.






20. Agents - represent Insurer; Brokers - represent themselves & Insured; Solicitors - represent one agent to solicit leads.






21. Life license + NASD (FINRA) Series 6 or 7.






22. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)






23. Mathematical law stating the larger # of occurrences - the more predictable the losses; used to calculate premiums.






24. Info already known; Info that should have been known; Waived info; Irrelevant info.






25. 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.






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






27. Must be delivered in person or by certified - registered or 1st-class mail w/ signature - unless waived by Insurance Commissioner.






28. If Insured & primary beneficiary die due to same act (w/in 14 days) - primary assumed 1st to die & contingent beneficiary paid death benefit.






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






30. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.






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






32. Facultative - case by case agreements; Automatic/Treaty - automatic acceptance of risk percentage per previous agreement.






33. Same as WL but premium low for 1st 5 yrs. - THEN has annual premium increases for set # yrs. - THEN level premium.






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






35. Funding mechanism whereby employer & employee share cost of premium. Upon death - benefit is shared between employer & beneficiary.






36. Prepaid med. benefits for members ONLY w/ approved primary care M.D. (HMO employee); focus on preventative care; low co-pay.






37. Fixed premium w/ guaranteed min. death benefit that may increase due to higher than expected investment returns.






38. Federal program financed by payroll taxes provided equally by both employer & employee OR entirely by individual (if self-employed). Provides benefits for: Medicare @ age 65+; retirement; $255 lump sum death benefit; (limited) disability; survivors;






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






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






41. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.






42. Govt. organization providing health care benefits for dependents of military personnel.






43. Price of insurance per exposure unit.






44. 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.






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






46. Benefits automatically increase annually based on inflationary index (i.e. Consumer Price Index) OR flat rate (5% max.).






47. Dividends are NOT taxable but interest is. Loan interest is NOT tax-deductible. Interest paid by Insurer on retained funds is taxable.






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






49. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.






50. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.