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. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.






2. Excludes coverage for specific injury/illness either temporarily or permanently in order to eliminate pre-existing condition.






3. 'The inability to perform ANY gainful occupation'.






4. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.






5. Upon death - death benefit is paid + the aggregate of premiums paid to date; add-on to Term policy ONLY.






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






7. Permanent - not recoverable (spinal cord injury); Temporary - recoverable (temp. illness/injury - broken limb).






8. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.






9. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).






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






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






12. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.






13. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.






14. Waives premium upon disability of Insured until return to work; disability must persist for 6 mths. or longer. Cash value & dividends not affected.






15. Insurance purchased by other Insurer(s) to spread or diversify risk; promotes industry stability.






16. Unilateral - Insurer provides contract; Adhesion - parties must adhere to terms; Aleatory - benefits may not inure equally.






17. Federal law to protect Federal employees' (& their beneficiaries') pension - group insurance - & welfare benefits.






18. 1: Surrender for cash value (taxable); 2: Buy equal-benefit paid-up Level Term policy; 3: Buy reduced-benefit paid-up WL policy.






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






20. Primary - if 2 or more - equally shared; Contingent (Secondary) - only if primary dead; Tertiary - only if both primary & secondary dead. If none listed - goes to estate.






21. Intentional deception; grounds for rescission.






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






23. A lapsed policy may be reinstated if not longer than 3-5 yrs. - & proof of insurability re-established - & back premiums + interest paid.






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






25. Federal law allows employees/their dependents to continue group benefits w/in 60 days after termination (if employer has 20+ employees); Insured pays premium @ 102% of group cost.






26. Death benefit is NOT taxable. Cash value grows tax-deferred but cost basis (base premium) is not taxable - only interest is.






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






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






29. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.






30. Provides % of monthly income benefit if Insured becomes disabled due to illness or accident.






31. 4: Funds retained by Insurer until w/drawn - interest ONLY paid monthly (taxable); 5: Paid-up immediate annuity.






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






33. Part of IRS Section 125 cafeteria plan - which allows pre-tax payroll deductions for qualified medical expenses or child/dependent care.






34. 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.






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






36. Written policy terms supersede oral statements made prior to policy issue.






37. 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.






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






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






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






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






42. Intentional OR unintentional failure to disclose material underwriting facts that should have been disclosed; grounds for policy rescission.






43. Premiums determined by target cash values or death benefit; partial cash value w/drawals allowed; transparent policy w/ unbundled premium.






44. Provides disability income during surgery recovery from life-threatening condition (& sometimes cosmetic surgery).






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






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






47. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.






48. War - 2 types; Suicide (1st 2 yrs.); Aviation (non-commercial); Hazardous hobbies; Criminal acts; Alcohol/Drug influenced.






49. 1: mortality probability charge; 2: Insurer's investment return; 3: expenses (admin costs - commissions). 1 - 2 = net; 1 - 2 + 3 = gross.






50. 1: Tax-free lump sum; 2: Monthly pay-outs for fixed time; 3: Fixed monthly payments until depleted.