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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. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Business Overhead Expense (BOE) Disability policy
Accidental Death & Dismemberment (AD&D) Disability rider
Primary Insurance Amount (PIA)
Medicare
2. Permanent disability due to total loss of sight - hearing - speech or use of 2 + limbs; benefits paid even while continuing to work.
Family Maintenance policy
Policy delivery
Loss exposure
Presumptive disability
3. Federal law which prohibits companies w/ 15+ employees from decreasing coverage benefits for women affected by pregnancy or childbirth.
Supplemental Major Medical plan
Occupational Disability policy
Civil Rights/Pregnancy Discrimination Act
Waiver of Premium (Waiver of Cost of Insurance) rider
4. Req. by CA statute & may provide workers coverage for action-over claims.
Trusts
Employer Liability
Rate (as defined by CIC)
Incontestability clause/provision
5. 1: Tax-free lump sum; 2: Monthly pay-outs for fixed time; 3: Fixed monthly payments until depleted.
Survivorship (aka "Last to die") policy
Settlement options for Life policy (1 of 2)
Medical Savings Account (MSA) & Health Savings Account (HSA)
Payor (aka Waiver of Payor's Premium) rider
6. Beneficiary has right to leave death benefits / Insurer to protect $ from creditors; interest (taxable) paid on retained funds.
Spendthrift provision
Elements to contract
Modified Endowment Contract (MEC)
Exclusions for Major Medical plan
7. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.
Types of Accident & Health (A&H) providers
Policy delivery
Joint Life (aka "First to die") policy
Palliative vs. Curative care
8. 'The inability to perform ANY gainful occupation'.
Beneficiary provisions
Binding receipt (aka Temporary Insurance Agreement)
Total disability (any-occupational definition)
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
9. 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.
Conformity with State Statute provision
Plans A-L of Medical Supplement or Medigap
Earned vs. Unearned premium
Valid life insurance contracts must identify...
10. Provides hospital insurance automatically @ age 65 (if FICA qualified) @ no fee but may have deductible & co-pay.
Medicare Part A (aka Hospital Insurance or HI)
Employer Liability
Types of Renewability provisions
Change of Occupation provision
11. 'The inability to perform ANY reasonable occupation based on education - training or experience'.
Tax implications of Death Benefit & Cash Value
Family policy
Total disability (more restrictive definition)
Types of Insurers (by authorization)
12. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.
Medicaid/Medi-Cal
Partial disability rider
Settlement options for Life policy (1 of 2)
Annuity Classifications (2 of 5): When benefits begin
13. Policy must be delivered w/ original (or copy of same) application attached.
Types of hazards
Entire Contract provision
Annuity surrender charges
Business Overhead Expense (BOE) Disability policy
14. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Payor (aka Waiver of Payor's Premium) rider
Accidental Death & Dismemberment (AD&D) Life policy
Medicaid/Medi-Cal
Considerations in replacing Health insurance
15. 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
Annuity Classifications (1 of 5): How premium is paid
Tax implications of Disability policy
Small Employer Medical Expense plan
16. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Key Employee policy
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Common Disability Exclusions
Transplant/Cosmetic Surgery rider
17. Qualified Annuity - Tax-deductible contributions & tax-deferred growth but fully taxable w/drawals.
Fraud
Tax implications of an Annuity (1 of 2)
Variable Universal Life policy
Tax implications of Dividends - Loans & Interest
18. Upon death - death benefit is paid + the aggregate of premiums paid to date; add-on to Term policy ONLY.
Return of Premium rider
Medicare Part C (aka Medicare Advantage)
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Presumptive disability
19. 'The inability to perform your OWN normal occupation or daily duties'.
Retrocession
Palliative vs. Curative care
Variable Life policy (2 of 2)
Total disability (as commonly defined)
20. Extreme form of Limited Pay Whole Life whereby entire premium is paid in a single payment.
Employee Retirement Income Security Act (ERISA)
Medicare Part D
Single Pay Whole Life policy
Entire Contract provision
21. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.
1035 Exchange
Types of Accident & Health (A&H) providers
Return of Premium rider
Automatic Premium Loan (APL) provision
22. 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.
Approval Type Conditional receipt
Tax implications of an Estate
Medicare Part A & B "Gaps"
Joint Life (aka "First to die") policy
23. Allows for Term policy renewal @ higher premium w/out medical exam; guarantees insurability; based on actual/attained age.
Common Disaster (Simultaneous Death Act) clause/provision
Renewability provision
Cost of Living Adjustment (COLA) Life rider
Beneficiary provisions
24. Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling - stock investment).
Non-forfeiture options for WL policy
Pure risk vs. Speculative risk
Medi-Cal Share Cost plan
Errors & Omissions (E&O)
25. Tendency of poorer risks to seek insurance.
Return of Cash Value rider
Adverse selection
Current Assumption (aka Interest-Sensitive) Whole Life policy
Tax implications of Disability policy
26. If Insured & primary beneficiary die due to same act (w/in 14 days) - primary assumed 1st to die & contingent beneficiary paid death benefit.
Reinstatement provision
Common Disaster (Simultaneous Death Act) clause/provision
Dividends
Premium modes
27. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.
Business Continuation (aka Buy-Sell) Disability policy
Policy delivery
Modified Premium Whole Life policy
Variable Life policy (2 of 2)
28. 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)
Elements to contract
Accidental Death & Dismemberment (AD&D) Life policy
Employee Retirement Income Security Act (ERISA)
29. Provides professional services - rehabilitation - training/re-training & related costs to assist Insured in returning to work.
Rehabilitation rider
Needs approach (most common)
Pure risk vs. Speculative risk
Relation of Earnings to Insurance provision
30. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.
Types of Insurers (by ownership)
Types of reinsurance
Endowment Life policy
Tax implications of an Estate
31. Level - fixed death benefit - premium fixed until renewal; Decreasing - death benefit decreases over term - premium fixed until renewal; Increasing - death benefit increases over term - premium fixed until renewal.
Life insurance policy
Incontestability clause/provision
Variable Life policy (1 of 2)
Types of Term Life policies
32. Federal law which allows health coverage portability when changing jobs - so long as previous coverage was in effect 63+ days; allows some tax deductibility for LTC.
Health Insurance Portability and Accountability Act (HIPAA)
Tax implications of Disability policy
Types of Insurers (by domicile)
Variable Life policy (1 of 2)
33. Same as WL but premium low for set # yrs. - THEN premiums vary (+ or -) based on Insurer's investment returns - w/ Gmax.
Comprehensive Major Medical plan
Point of Service plan
Indeterminate Premium Whole Life policy
Single Pay Whole Life policy
34. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.
Rescission
Considerations in replacing Health insurance
Valid life insurance contracts must identify...
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
35. 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;
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Legal Action provision
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Life insurance policy
36. Period of time following any children's survivor benefit & before benefits are provided to employee's widow/widower.
Exclusions for Major Medical plan
Impairment (Exclusion) rider
IRS Penalties for Annuities
Blackout Period
37. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)
Annuity Classifications (1 of 5): How premium is paid
Payment of Premium provision
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
38. Death benefit is NOT taxable. Cash value grows tax-deferred but cost basis (base premium) is not taxable - only interest is.
COBRA Time Limitations
Indeterminate Premium Whole Life policy
Tax implications of Death Benefit & Cash Value
Health Insurance Portability and Accountability Act (HIPAA)
39. Death benefit determined by Insured's projected lost earnings potential.
Human Life Value approach
Types of Licensed Producers
Cost of Living Adjustment (COLA) Disability rider
Departments of an Insurer
40. Intentional deception; grounds for rescission.
Doctrine of Comity
Reinstatement provision
Fraud
Insurable interest
41. Representation - oral or written statement made to best of knowledge or belief; Warranty - statement guaranteed/presumed/understood to be true.
Term Life policy
Annuity Classifications (5 of 5): # of lives
Applicant Representations vs. Warranties
Age Discrimination in Employment Act (ADEA)
42. 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.
Convertibility provision
Earned vs. Unearned premium
Family Maintenance policy
Accidental Death (aka Multiple Indemnity) rider
43. Agents - represent Insurer; Brokers - represent themselves & Insured; Solicitors - represent one agent to solicit leads.
Cash value
Payment of Premium provision
Types of Licensed Producers
Partial disability rider
44. Dependent children are covered until 19 or 23 (full-time student only) or until self-sufficient (if handicapped).
Medi-Cal Share Cost plan
Dependent coverage
Spendthrift provision
Binding receipt (aka Temporary Insurance Agreement)
45. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.
Permanent vs. Temporary disability
Exclusions for Major Medical plan
Levels of Long Term Care provided
Annuity Classifications (1 of 5): How premium is paid
46. Potential circumstance that could cause a loss; measured in dollars.
Insuring clause/provision (aka Insuring Agreement)
Loss exposure
Indeterminate Premium Whole Life policy
Tax implications of Disability policy
47. Part A - Inpatient hospital deductibles vary on # of days; limited reserve days; finite benefit; 1st 3 pints blood; Part B - 20% co-payment.
Annuity Classifications (1 of 5): How premium is paid
Family Maintenance policy
Indemnify
Medicare Part A & B "Gaps"
48. 1: parties to contract; 2: insured party or life; 3: insurable interest - if 3rd party; 4: risks insured against; 5: policy period (term); 6: premium & mode.
Valid life insurance contracts must identify...
Tax implications of Disability policy
Loss exposure
Medi-Cal Share Cost plan
49. Intentional OR unintentional failure to disclose material underwriting facts that should have been disclosed; grounds for policy rescission.
Retrocession
Concealment
Grace Period provision
Underwriting risk categories
50. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).
Adjustable Whole Life policy
Premium modes
Types of Insurers (by domicile)
Cost of Living Adjustment (COLA) Life rider