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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. Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling - stock investment).
Dividends
Pure risk vs. Speculative risk
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Phases of an annuity
2. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.
Juvenile Life (aka Jumping Juvenile) policy
Conformity with State Statute provision
Small Employer Medical Expense plan
Waiver of Premium (Waiver of Cost of Insurance) rider
3. Federal law to protect Federal employees' (& their beneficiaries') pension - group insurance - & welfare benefits.
Levels of Long Term Care provided
Accidental Death & Dismemberment (AD&D) Life policy
Employee Retirement Income Security Act (ERISA)
Major Medical plan
4. Mathematical calculation based on overall FICA contributions used to determine retirement/disability/survivorship benefit.
Viatical Settlement Provider (VSP)
Rescission
Grace Period provision
Primary Insurance Amount (PIA)
5. Provides professional services - rehabilitation - training/re-training & related costs to assist Insured in returning to work.
Presumptive disability
CHAMPUS (aka TriCare)
Rehabilitation rider
Indeterminate Premium Whole Life policy
6. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.
Employee Retirement Income Security Act (ERISA)
Dependent coverage
Life insurance policy
Point of Service plan
7. Domestic - within home state; Foreign - outside home state; Alien - outside home country.
Joint Life (aka "First to die") policy
Modified Premium Whole Life policy
Medicare Part D
Types of Insurers (by domicile)
8. Basic Medical; Major Medical; Comprehensive Major Medical
24 Hour Coverage (CA)
Concealment exceptions
Types of Medical Plans
Consolidated Omnibus Budget Reconciliation Act (COBRA)
9. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.
Medicare Supplement or Medigap policy
Tax implications of an Annuity (1 of 2)
Health Reimbursement Account (HRA)
CA Work. Comp. Statutes
10. Same as Term Life but provides living benefit (endowment) to policy owner if Insured survives entire term.
Health Reimbursement Account (HRA)
Transplant/Cosmetic Surgery rider
Endowment Life policy
Variable Life policy (2 of 2)
11. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.
Accidental Death (aka Multiple Indemnity) rider
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Reinstatement provision
Indeterminate Premium Whole Life policy
12. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.
Levels of Long Term Care provided
Doctrine of Comity
Policy loans
Non-Occupational Disability policy
13. Combination of Basic Medical & Major Medical in one policy; Basic pays 1st - then Major Medical w/ corridor deductible.
Comprehensive Major Medical plan
Beneficiary provisions
Graded Premium Whole Life policy
Insurer (as defined by CIC)
14. Provides supplemental coverage for physician/surgeon fees if enrolled (during enrollment period ONLY) & pay monthly premium w/ deductible and co-insurance.
Medicare Part B (aka Supplemental Medical Insurance or SMI)
COBRA Time Limitations
Residual disability rider
Medicare Part D
15. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Types of Accident & Health (A&H) providers
Requirements to sell variable life products
Considerations in replacing Health insurance
16. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.
Rescission
Suicide clause/provision
Types of Renewability provisions
Tax implications of Dividends - Loans & Interest
17. Responsible adult trustee designated to manage death benefits for minor child beneficiary until adulthood.
Adverse selection
Trusts
Types of Insurers (by domicile)
Considerations in replacing Health insurance
18. Provides benefit during Social Security "black-out" period - up to 1 yr.
IRS Penalties for Annuities
Social Security Benefit (Supplement) rider
Age Discrimination in Employment Act (ADEA)
Medical cost containment (aka Managed care)
19. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.
Annuity Classifications (2 of 5): When benefits begin
Flexible Spending Account (FSA)
Return of Premium rider
Spendthrift provision
20. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Family policy
Accidental Death & Dismemberment (AD&D) Disability rider
Point of Service plan
Pure risk vs. Speculative risk
21. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.
Single Pay Whole Life policy
Suicide clause/provision
Legal Action provision
1035 Exchange
22. Monthly; Quarterly; Semi-annually; Annually (cheapest due to less admin cost).
Return of Premium rider
Adverse selection
Retrocession
Premium modes
23. Fraternal - non-profit - members only; Reciprocal - unincorp'd org. - members insure each other; Lloyd's Assoc. - groups sharing risks; Surplus lines - special market risks.
Medicare
Types of Insurers (miscellaneous)
7 Pay Test
Tax implications of Dividends - Loans & Interest
24. 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.
Pure risk vs. Speculative risk
Exclusions to Work. Comp.
Settlement options for Life policy (2 of 2)
Convertibility provision
25. Same as Universal Life but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Plans A-L of Medical Supplement or Medigap
Types of Accident & Health (A&H) providers
Reinsurance
Variable Universal Life policy
26. WL policy covering 2 or more Insureds but ONLY payable upon death of LAST Insured - generally low premium but high death benefit.
Survivorship (aka "Last to die") policy
Retrocession
Incontestability clause/provision
Insurance contract characteristics (2 of 2)
27. 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.
Variable Life policy (2 of 2)
Tax implications of an Estate
Medicaid/Medi-Cal
Tax implications of an Annuity (1 of 2)
28. Dividends are NOT taxable but interest is. Loan interest is NOT tax-deductible. Interest paid by Insurer on retained funds is taxable.
Annuity Classifications (1 of 5): How premium is paid
Supplemental Major Medical plan
Dread Disease policy
Tax implications of Dividends - Loans & Interest
29. Provides coverage for specific disease(s) - such as cancer or leukemia.
Social Security Benefit (Supplement) rider
Dread Disease policy
Workers' Compensation insurance
Notice of Claim provision
30. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Key Employee policy
Departments of an Insurer
Health Insurance Portability and Accountability Act (HIPAA)
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
31. Allows policy owner to w/draw set % of death benefit upon verification of terminal illness w/ expectancy 12-24 mths.; generally tax-free.
Waiver of Premium (Waiver of Cost of Insurance) rider
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Insurable interest
Equity Index Whole Life policy
32. 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;
7 Pay Test
Variable Life policy (1 of 2)
Loss of Earnings Test
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
33. Upon notice - Insurer must provide Claim Form (Proof of Loss Form) to Insured w/in 15 days.
Cross Purchase Plan
Graded Premium Whole Life policy
Claim Form (aka Proof of Loss Form) provision
Cost of Living Adjustment (COLA) Disability rider
34. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Trial Application (aka Request for Offer)
Rescission
Group Disability plan
Policy loans
35. Treating or mitigating loss exposures through 1: avoidance; 2: retention (deductibles); 3: sharing; 4: reduction; or 5: transfer.
Insuring clause/provision (aka Insuring Agreement)
Social Security Benefit (Supplement) rider
Risk management
Phases of an annuity
36. Two death benefit options - Option A: death benefit ONLY; Option B: death benefit + cash value; death benefit NOT guaranteed.
Term Life policy
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Single Pay Whole Life policy
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
37. Same as WL but w/ adjustable death benefit (& corresponding premium) & over-fund option but w/ annually renewable term (ART).
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Rate (as defined by CIC)
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Dental Plan
38. Potential circumstance that could cause a loss; measured in dollars.
Premium modes
Annuity Classifications (5 of 5): # of lives
Loss exposure
Parole Pardon Rule
39. 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.
COBRA Time Limitations
Phases of an annuity
Plans A-L of Medical Supplement or Medigap
Whole (aka Permanent or Straight) Life policy
40. Same as WL but premium low for 1st 3-5 yrs. - THEN has one-time premium increase.
Modified Premium Whole Life policy
Annuity Classifications (3 of 5): Source of income
Return of Premium rider
Point of Service plan
41. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Disability Income policy
Underwriting risk categories
Comprehensive Major Medical plan
Accidental Death & Dismemberment (AD&D) Life policy
42. Policy provisions must conform to state regulations where policy is sold.
Types of Insurers (by sector)
Family policy
Impairment (Exclusion) rider
Conformity with State Statute provision
43. Savings account for medical expenses; Tax-deductible contributions; tax-deferred growth; tax-free for qualified use; taxable for non-qualified use.
Whole (aka Permanent or Straight) Life policy
Proof of Loss provision
Medical Savings Account (MSA) & Health Savings Account (HSA)
Types of Insurers (by ownership)
44. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.
Employer Liability
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Medicare Part A (aka Hospital Insurance or HI)
45. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.
Civil Rights/Pregnancy Discrimination Act
Insurance contract characteristics (1 of 2)
Plans A-L of Medical Supplement or Medigap
Revocable vs. Irrevocable beneficiary
46. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.
Waiver of Premium (Waiver of Cost of Insurance) rider
Annuity Classifications (1 of 5): How premium is paid
Valid life insurance contracts must identify...
Incontestability clause/provision
47. Life license + NASD (FINRA) Series 6 or 7.
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Blue Cross/Blue Shield
Requirements to sell variable life products
Types of Term Life policies
48. Pays death benefit until age 100 or death; builds equity (cash value); may be transferred or sold; generally level premium.
Automatic Premium Loan (APL) provision
Whole (aka Permanent or Straight) Life policy
Indemnify
Accidental Death & Dismemberment (AD&D) Life policy
49. Intentional deception; grounds for rescission.
Fraud
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Annuity Classifications (1 of 5): How premium is paid
Time Limit on Certain Defenses provision
50. If Insured & primary beneficiary die due to same act (w/in 14 days) - primary assumed 1st to die & contingent beneficiary paid death benefit.
Annuity Classifications (5 of 5): # of lives
Common Disaster (Simultaneous Death Act) clause/provision
Legal Action provision
24 Hour Coverage (CA)