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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. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.
Applicant Representations vs. Warranties
Types of Accident & Health (A&H) providers
Family Maintenance policy
Adjustable Whole Life policy
2. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.
Cash value
7 Pay Test
Penalties for violating AIDS/HIV privacy laws
Needs approach (most common)
3. 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)
Elements to contract
Types of Licensed Producers
Life insurance policy
4. Generally 10 days after policy delivery to cancel policy w/ full refund - except 30 days for seniors or for replacement policies.
Policy delivery
Free Look provision
Annuity surrender charges
Estoppel
5. Tendency of poorer risks to seek insurance.
Tax implications of an Annuity (1 of 2)
Waiver of Premium (Waiver of Cost of Insurance) rider
Convertibility provision
Adverse selection
6. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.
Insurance contract characteristics (1 of 2)
Long Term Care (LTC) policy
Relation of Earnings to Insurance provision
Automatic Premium Loan (APL) provision
7. Unintentional - up to $1 -000 + legal $; Intentional - $1 -000-5 -000 + legal $; If harmful - misdemeanor + up to 1 yr. prison + up to $10 -000.
Joint Life (aka "First to die") policy
Major Medical plan
Penalties for violating AIDS/HIV privacy laws
Annuity Classifications (1 of 5): How premium is paid
8. 1: Immediate benefits rec'd w/in 30 days but premium must be paid by lump sum; 2: Deferred - usually until retirement.
Annuity Classifications (2 of 5): When benefits begin
7 Pay Test
Cash value
Types of Insurers (miscellaneous)
9. Govt. organization providing health care benefits for dependents of military personnel.
Types of Term Life policies
Blue Cross/Blue Shield
Types of Licensed Producers
CHAMPUS (aka TriCare)
10. Excludes coverage for specific injury/illness either temporarily or permanently in order to eliminate pre-existing condition.
Blue Cross/Blue Shield
Annuity Classifications (3 of 5): Source of income
Return of Cash Value rider
Impairment (Exclusion) rider
11. Agents - represent Insurer; Brokers - represent themselves & Insured; Solicitors - represent one agent to solicit leads.
Types of Licensed Producers
Dread Disease policy
Insuring clause/provision (aka Insuring Agreement)
Rescission
12. Receipt whereby coverage incepts ONLY after underwriting approval.
Variable Universal Life policy
Approval Type Conditional receipt
Levels of Long Term Care provided
Annuity Classifications (3 of 5): Source of income
13. Pre-existing illness/injury; Waiting period; Elimination period; Probationary period; Benefits - Exclusions - Limitations; Underwriting reqs.
Accidental Death & Dismemberment (AD&D) Disability rider
Guaranteed Insurability Life rider
Considerations in replacing Health insurance
Residual disability rider
14. Group plan initially self-funded by employer (like SIR); after which - group plan Insurer covers (up to policy limit); requires TPA.
Employer-Administered plan
Time Limit on Certain Defenses provision
Elements to contract
Medical cost containment (aka Managed care)
15. 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.
Plans A-L of Medical Supplement or Medigap
Revocable vs. Irrevocable beneficiary
Health Maintenance Organization (HMO)
Dividend options
16. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.
Insurer (as defined by CIC)
Concealment exceptions
Tax implications of an Annuity (1 of 2)
Dread Disease policy
17. Dependent children are covered until 19 or 23 (full-time student only) or until self-sufficient (if handicapped).
CA Work. Comp. Statutes
Dividend options
Tax implications of Disability policy
Dependent coverage
18. 1: Cash (tax-free); 2: Apply to future premiums; 3: Retained by Insurer @ interest; 4: Buy Paid-up WL policy add-ons; 5: Pay-up existing policy; 6: Buy 1-yr. Term policy.
Rehabilitation rider
Tax implications of medical plans
Dividend options
Needs approach (most common)
19. Intentional deception; grounds for rescission.
Current Assumption (aka Interest-Sensitive) Whole Life policy
Waiver of Premium provision
Applicant Representations vs. Warranties
Fraud
20. Two death benefit options - Option A: death benefit ONLY; Option B: death benefit + cash value; death benefit NOT guaranteed.
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Multiple Employer Trust (MET) aka Multiple Employer Welfare Association (MEWA)
Split Dollar Plan
Tax implications of Disability policy
21. Process which prevents claim denial as a result of false statement or promise (made by Insurer) - which was relied upon by Insured.
Estoppel
Return of Premium rider
Needs approach (most common)
Medi-Cal Share Cost plan
22. A&H - A&S - Sickness only; Medical; Disability; Accident only; Travel accident; LTC; Medicare supplement; AD&D; Dental/Vision/Prescription; Limited.
Departments of an Insurer
Retrocession
Rescission
Types of Accident & Health insurance
23. 1: Skilled nursing care; 2: Intermediate care; 3: Custodial care; 4: Home health care.
Variable Life policy (1 of 2)
Grace Period provision
Medicare
Levels of Long Term Care provided
24. WL policy covering 2 or more Insureds but payable upon death of FIRST Insured - after which policy ends.
Joint Life (aka "First to die") policy
Non-Occupational Disability policy
Peril vs. Hazard
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
25. Policy must be delivered w/ original (or copy of same) application attached.
Business Continuation (aka Buy-Sell) policy
Entire Contract provision
IRS Penalties for Annuities
Types of reinsurance
26. Excludes coverage for suicide during 1st 2 yrs. ONLY but - if it does - all premiums must be returned to beneficiary.
Suicide clause/provision
Human Life Value approach
Key Employee policy
Employer-Administered plan
27. Type of partial disability rider - which pays fluctuating % of lost income w/out time limit.
Graded Premium Whole Life policy
Residual disability rider
Tax implications of an Annuity (1 of 2)
Annuity Classifications (3 of 5): Source of income
28. Same as WL but can be "paid-up" early by paying larger premium for shorter payment period (i.e. 10 Pay Life - 20 Pay Life).
Reinsurance
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Guaranteed Insurability Life rider
Limited Pay Whole Life policy
29. 1: Tax-free lump sum; 2: Monthly pay-outs for fixed time; 3: Fixed monthly payments until depleted.
Long Term Care (LTC) policy
Settlement options for Life policy (1 of 2)
Current Assumption (aka Interest-Sensitive) Whole Life policy
Needs approach (most common)
30. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.
Reinstatement provision
Experience vs. Community rating in Group Health plan
Trial Application (aka Request for Offer)
Exclusions to Work. Comp.
31. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.
Health Reimbursement Account (HRA)
Misstatement of Age/Sex provision
Family or Dependents rider
CA Work. Comp. Statutes
32. 1: Individual; 2: Joint - multiple annuitants paid until 1st dies; 3: Joint & Survivor - multiple annuitants paid until 1st dies THEN survivors paid but @ reduced $.
Annuity Classifications (5 of 5): # of lives
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Tax implications of an Annuity (1 of 2)
Parole Pardon Rule
33. Waives premium on Life policy for minor child until age 21 in event premium payor dies or becomes disabled.
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34. Federally-sponsored health care for individuals 65+ &/or w/ certain disabilities; may run concurrent w/ group plan but group plan would act primary - THEN Medicare.
Medicare
Adjustable Whole Life policy
Rate (as defined by CIC)
Spendthrift provision
35. Waives premium upon disability of Insured until return to work; disability must persist for 6 mths. or longer. Cash value & dividends not affected.
Family Income policy
Term Life policy
Waiver of Premium (Waiver of Cost of Insurance) rider
Equity Indexed annuity
36. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.
Insuring clause/provision (aka Insuring Agreement)
Medicare Part A (aka Hospital Insurance or HI)
Return of Cash Value rider
Medi-Cal Share Cost plan
37. Benefits automatically increase annually based on inflationary index (i.e. Consumer Price Index) OR flat rate (5% max.).
Accidental Death & Dismemberment (AD&D) Life policy
Cost of Living Adjustment (COLA) Disability rider
Health Insurance Portability and Accountability Act (HIPAA)
Basic Medical plan
38. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Plans A-L of Medical Supplement or Medigap
Cross Purchase Plan
Adverse selection
39. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Health Reimbursement Account (HRA)
IRS Penalties for Annuities
Insurer (as defined by CIC)
40. Prohibited w/ regard to testing for people of same class; test results must remain confidential; coverage may be declined (once discovered).
Social Security Benefit (Supplement) rider
Annuity Classifications (3 of 5): Source of income
AIDS/HIV discrimination
Joint Life (aka "First to die") policy
41. Same as WL but death benefit increases annually - linked to Consumer Price Index; premium increases annually OR is set high from start.
Equity Index Whole Life policy
IRS Penalties for Annuities
Current Assumption (aka Interest-Sensitive) Whole Life policy
Requirements to sell variable life products
42. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.
Modified Endowment Contract (MEC)
Types of Agency Authority
Limited Pay Whole Life policy
Preferred Provider Organization (PPO)
43. Conditional - coverage is conditional; Personal - parties are people; Good faith - honesty/integrity; Fiduciary - req's financial trust.
Guaranteed Insurability Life rider
Insurance contract characteristics (2 of 2)
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Requirements to sell variable life products
44. IRS allows tax-free transfer of cash values between 2 LIKE policies (i.e. Life to Life - Annuity to Annuity - or Life to Annuity).
Entire Contract provision
1035 Exchange
Endowment Life policy
Departments of an Insurer
45. Peril is the CAUSE of loss. Hazard is a condition that increases LIKELIHOOD of loss.
Concealment
Occupational Disability policy
Medicare Supplement or Medigap policy
Peril vs. Hazard
46. Req. by CA statute & may provide workers coverage for action-over claims.
Employer Liability
Business Continuation (aka Buy-Sell) policy
Civil Rights/Pregnancy Discrimination Act
Common Accident provision
47. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Accidental Death & Dismemberment (AD&D) Life policy
Rehabilitation rider
Health Insurance Portability and Accountability Act (HIPAA)
Employer-Administered plan
48. Same as Term Life but provides living benefit (endowment) to policy owner if Insured survives entire term.
Endowment Life policy
Common Disability Exclusions
Peril vs. Hazard
Types of Insurers (by authorization)
49. Financial interest in insured party that must exist @ time of application OR policy issuance. Requires consent (except minors).
Legal Action provision
Comprehensive Major Medical plan
1035 Exchange
Insurable interest
50. Responsible adult trustee designated to manage death benefits for minor child beneficiary until adulthood.
Trusts
Types of Accident & Health insurance
Accidental Death & Dismemberment (AD&D) Life policy
Guaranteed Insurability Life rider