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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. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)
Peril vs. Hazard
Annuity Classifications (1 of 5): How premium is paid
Insurance contract characteristics (1 of 2)
Conformity with State Statute provision
2. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.
Cross Purchase Plan
Joint Life (aka "First to die") policy
Employer-Administered plan
Departments of an Insurer
3. 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)
Market Value Adjusted (aka Modified Guaranteed) annuity
Universal (aka Flexible Premium Adjustable) Life policy (1 of 4)
Insurance contract characteristics (2 of 2)
4. Coverage remains in effect for 31 days past premium due date; benefits paid during grace period would be deducted from sum.
Policy loans
Indeterminate Premium Whole Life policy
Grace Period provision
Annuity
5. Permanent disability due to total loss of sight - hearing - speech or use of 2 + limbs; benefits paid even while continuing to work.
Human Life Value approach
Approval Type Conditional receipt
Payment of Premium provision
Presumptive disability
6. Provides for continued operation of business if partner dies - by allowing surviving partner(s) to buy deceased partner's interest in business.
Types of Term Life policies
Business Continuation (aka Buy-Sell) policy
Change of Occupation provision
Suicide clause/provision
7. 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.
Tax implications of an Estate
Preferred Provider Organization (PPO)
Key Employee Disability policy
Elements to contract
8. Authorized (admitted) - can conduct business in state; Unauthorized (non-admitted) - cannot conduct business in state (w/ one exception).
Total disability (any-occupational definition)
Plans A-L of Medical Supplement or Medigap
Types of Insurers (by authorization)
Types of Insurers (by ownership)
9. Intentional deception; grounds for rescission.
Common Accident provision
Dividends
Fraud
Payor (aka Waiver of Payor's Premium) rider
10. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).
Loss exposure
1035 Exchange
Waiver of Premium provision
Workers' Compensation insurance
11. Dividends are NOT taxable but interest is. Loan interest is NOT tax-deductible. Interest paid by Insurer on retained funds is taxable.
Tax implications of Dividends - Loans & Interest
Types of Accident & Health insurance
Medicare
COBRA Time Limitations
12. Permanent - not recoverable (spinal cord injury); Temporary - recoverable (temp. illness/injury - broken limb).
Comprehensive Major Medical plan
Adjustable Whole Life policy
Non-Occupational Disability policy
Permanent vs. Temporary disability
13. Fixed premium w/ guaranteed min. death benefit that may increase due to higher than expected investment returns.
Dental Plan
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Variable Life policy (2 of 2)
Insurance contract characteristics (2 of 2)
14. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.
Types of Insurers (miscellaneous)
Penalties for violating AIDS/HIV privacy laws
Payor (aka Waiver of Payor's Premium) rider
Medicare Supplement or Medigap policy
15. 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.
Life insurance policy
Accidental Death (aka Multiple Indemnity) rider
Permanent vs. Temporary disability
CA Work. Comp. Statutes
16. Unilateral - Insurer provides contract; Adhesion - parties must adhere to terms; Aleatory - benefits may not inure equally.
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Requirements to sell variable life products
Insurer (as defined by CIC)
Insurance contract characteristics (1 of 2)
17. Waives premium on Life policy for minor child until age 21 in event premium payor dies or becomes disabled.
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18. Death benefit is NOT taxable. Cash value grows tax-deferred but cost basis (base premium) is not taxable - only interest is.
Family Income policy
Tax implications of Death Benefit & Cash Value
Factors that determine premium
Joint Life (aka "First to die") policy
19. Disability income is based on "earned income" (salary - bonus - commission) - not unearned income (interest - investment - rents).
Modified Premium Whole Life policy
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Loss exposure
Loss of Earnings Test
20. 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.
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Legal Action provision
Phases of an annuity
Policy delivery
21. Representation - oral or written statement made to best of knowledge or belief; Warranty - statement guaranteed/presumed/understood to be true.
Levels of Long Term Care provided
Supplemental Major Medical plan
Free Look provision
Applicant Representations vs. Warranties
22. Info already known; Info that should have been known; Waived info; Irrelevant info.
Reinsurance
Return of Premium rider
Medi-Cal Share Cost plan
Concealment exceptions
23. Death benefit determined by Insured's projected lost earnings potential.
Law of Large Numbers
Occupational Disability policy
Human Life Value approach
Experience vs. Community rating in Group Health plan
24. Unintentional - up to $1 -000 + legal $; Intentional - $1 -000-5 -000 + legal $; If harmful - misdemeanor + up to 1 yr. prison + up to $10 -000.
Annuity Classifications (5 of 5): # of lives
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Penalties for violating AIDS/HIV privacy laws
Business Overhead Expense (BOE) Disability policy
25. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).
Insurer (as defined by CIC)
Types of Accident & Health insurance
Medicare Part D
Insurable interest
26. Policyholders - Mutual (participating) co. - may pay dividends; Stockholders - Stock (non-participating) co. - no dividends.
Types of Insurers (by ownership)
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Types of Term Life policies
Insurability Type Conditional receipt
27. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.
Dividend options
Partial disability rider
Underwriting risk categories
Single Pay Whole Life policy
28. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.
Accidental Death (aka Multiple Indemnity) rider
Life insurance policy
Factors that determine premium
Incontestability clause/provision
29. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.
Misstatement of Age/Sex provision
Dental Plan
Tax implications of an Estate
Types of Insurers (by domicile)
30. Two death benefit options - Option A: death benefit ONLY; Option B: death benefit + cash value; death benefit NOT guaranteed.
Equity Index Whole Life policy
Medicare Part A & B "Gaps"
Considerations in replacing Health insurance
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
31. PURELY employer-funded account to reimburse employees for qualified medical expenses not covered by group health plan.
Underwriting risk categories
COBRA Time Limitations
Health Reimbursement Account (HRA)
Residual disability rider
32. Excludes coverage for suicide during 1st 2 yrs. ONLY but - if it does - all premiums must be returned to beneficiary.
Dividend options
Age Discrimination in Employment Act (ADEA)
Suicide clause/provision
Medicare Part C (aka Medicare Advantage)
33. Provides coverage for specific disease(s) - such as cancer or leukemia.
Tax implications of an Annuity (1 of 2)
Dread Disease policy
Law of Large Numbers
Types of Accident & Health insurance
34. The state in which the contract is accepted or delivered is the state that possesses regulatory jurisdiction over Group plan.
Juvenile Life (aka Jumping Juvenile) policy
Medical cost containment (aka Managed care)
CHAMPUS (aka TriCare)
Doctrine of Comity
35. Accumulation or "pay-in" - contributions & interest earned are tax-deferred; Annuity or "pay-out" - monthly annuity (taxable) paid.
Modified Premium Whole Life policy
Joint Life (aka "First to die") policy
Cost of Living Adjustment (COLA) Disability rider
Phases of an annuity
36. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.
Adjustable Whole Life policy
Workers' Compensation insurance
Palliative vs. Curative care
Free Look provision
37. Provides disability income during surgery recovery from life-threatening condition (& sometimes cosmetic surgery).
Health Reimbursement Account (HRA)
Insurance contract characteristics (1 of 2)
Transplant/Cosmetic Surgery rider
Tax implications of an Estate
38. Identical to Incontestable Clause in Life policy.
Proof of Loss provision
Time Limit on Certain Defenses provision
Trusts
Market Value Adjusted (aka Modified Guaranteed) annuity
39. Compensates business for loss due to disability of key employee; premiums not deductible but benefits tax-free.
Business Continuation (aka Buy-Sell) policy
Key Employee Disability policy
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Business Continuation (aka Buy-Sell) Disability policy
40. Receipt whereby coverage incepts conditionally upon submission of full consideration and that all underwriting reqs. are met.
Viatical Settlement Provider (VSP)
Insurability Type Conditional receipt
Permanent vs. Temporary disability
Social Security Benefit (Supplement) rider
41. Employer w/ 25 or less employees must offer all eligible employees @ least 2 medical plan options where pre-existing conditions can't be excluded more than 1 yr.
Exclusions for Major Medical plan
Family Maintenance policy
Small Employer Medical Expense plan
Whole (aka Permanent or Straight) Life policy
42. Beneficiary has right to leave death benefits / Insurer to protect $ from creditors; interest (taxable) paid on retained funds.
Spendthrift provision
Long Term Care (LTC) policy
Legal Action provision
CHAMPUS (aka TriCare)
43. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.
Group Disability plan
Life insurance policy
Partial disability rider
Free Look provision
44. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.
Variable Universal Life policy
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Graded Premium Whole Life policy
Recurrent disability clause/provision
45. Treating or mitigating loss exposures through 1: avoidance; 2: retention (deductibles); 3: sharing; 4: reduction; or 5: transfer.
Risk management
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Types of Insurers (miscellaneous)
Consolidated Omnibus Budget Reconciliation Act (COBRA)
46. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.
Retrocession
Business Continuation (aka Buy-Sell) Disability policy
Blue Cross/Blue Shield
Impairment (Exclusion) rider
47. Same as WL but cash value increases @ current interest rates (not set); premium can start low or high & may change.
Dependent coverage
Reinsurance
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Current Assumption (aka Interest-Sensitive) Whole Life policy
48. Periodic return of premium to policy owners from Mutual (Par) Companies; not guaranteed & not taxable as income; may be used in 6 ways.
Medicare Supplement or Medigap policy
Insurance contract characteristics (1 of 2)
Dividends
Peril vs. Hazard
49. Funding mechanism whereby employer & employee share cost of premium. Upon death - benefit is shared between employer & beneficiary.
Split Dollar Plan
Rehabilitation rider
Rate (as defined by CIC)
Approval Type Conditional receipt
50. 1: Straight aka Pure Life - lifetime income but no survivorship refund; 2: Life w/ Period Certain - lifetime income w/ death benefit of monthly annuity for remaining predetermined term. 3: Annuity Certain - monthly income paid for predetermined term
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Legal Action provision
Comprehensive Major Medical plan
CA Work. Comp. Statutes