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






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






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






4. Permanent disability due to total loss of sight - hearing - speech or use of 2 + limbs; benefits paid even while continuing to work.






5. Provides for continued operation of business if partner dies - by allowing surviving partner(s) to buy deceased partner's interest in business.






6. 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.






7. Policy provisions must conform to state regulations where policy is sold.






8. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.






9. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.






10. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.






11. Tendency of poorer risks to seek insurance.






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






13. Same as Universal Life but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.






14. Provides coverage for specific disease(s) - such as cancer or leukemia.






15. 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.






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






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. Same as Term Life but provides living benefit (endowment) to policy owner if Insured survives entire term.






19. Beneficiary has right to leave death benefits / Insurer to protect $ from creditors; interest (taxable) paid on retained funds.






20. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.






21. Price of insurance per exposure unit.






22. Dependent children are covered until 19 or 23 (full-time student only) or until self-sufficient (if handicapped).






23. Representation - oral or written statement made to best of knowledge or belief; Warranty - statement guaranteed/presumed/understood to be true.






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






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






26. Time period preceding each disability during which benefits are not paid; longer elimination periods = cheaper premium.






27. Multiple small employers w/ common affiliation (trade assoc. OR Chamber of Commerce) band together to purchase group plan.






28. 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.






29. 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.






30. Fraternal - non-profit - members only; Reciprocal - unincorp'd org. - members insure each other; Lloyd's Assoc. - groups sharing risks; Surplus lines - special market risks.






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






32. Excludes coverage for suicide during 1st 2 yrs. ONLY but - if it does - all premiums must be returned to beneficiary.






33. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.






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






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






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






37. Same as WL but cash value increases @ current interest rates (not set); premium can start low or high & may change.






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






39. Combination of Basic Medical & Major Medical in one policy; Basic pays 1st - then Major Medical w/ corridor deductible.






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






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






42. Part A - Inpatient hospital deductibles vary on # of days; limited reserve days; finite benefit; 1st 3 pints blood; Part B - 20% co-payment.






43. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).






44. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.






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






46. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)






47. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.






48. 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.






49. Process whereby a reinsurer reinsures w/ another reinsurer.






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