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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. Written policy terms supersede oral statements made prior to policy issue.
Needs approach (most common)
Types of Term Life policies
Annuity Classifications (3 of 5): Source of income
Parole Pardon Rule
2. Guaranteed min. interest rate on cash value buildup but possible higher rate if short-term investment returns higher than expected.
Payment of Premium provision
Rate (as defined by CIC)
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Tax implications of an Estate
3. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.
Indemnify
Dread Disease policy
Annuity Classifications (2 of 5): When benefits begin
Types of Renewability provisions
4. An irrevocable IRS classification of a policy (determined by the 7 Pay Test) whereby tax advantages are lost for all distributions ONLY.
Grace Period provision
7 Pay Test
Modified Endowment Contract (MEC)
Blue Cross/Blue Shield
5. 1: Non-cancelable; 2: Guaranteed renewable; 3: Cancelable; 4: Conditionally renewable; 5: Optionally renewable.
Health Insurance Portability and Accountability Act (HIPAA)
Key Employee policy
Family Maintenance policy
Types of Renewability provisions
6. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.
Cost of Living Adjustment (COLA) Disability rider
Legal Action provision
Total disability (as commonly defined)
Business Overhead Expense (BOE) Disability policy
7. 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
Point of Service plan
Annuity Classifications (2 of 5): When benefits begin
Reinstatement provision
8. Waives premium upon disability of Insured until return to work; disability must persist for 6 mths. or longer. Cash value & dividends not affected.
Medical Savings Account (MSA) & Health Savings Account (HSA)
Waiver of Premium (Waiver of Cost of Insurance) rider
Parole Pardon Rule
Blackout Period
9. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.
Adjustable Whole Life policy
Tax implications of an Annuity (1 of 2)
Return of Premium rider
Juvenile Life (aka Jumping Juvenile) policy
10. A&H - A&S - Sickness only; Medical; Disability; Accident only; Travel accident; LTC; Medicare supplement; AD&D; Dental/Vision/Prescription; Limited.
Types of Licensed Producers
Types of Accident & Health insurance
Dread Disease policy
Medi-Cal Share Cost plan
11. Business continuation funding plan whereby each partner agrees to buy Life policies on each other - but not themselves.
Cross Purchase Plan
Types of hazards
Single Pay Whole Life policy
Experience vs. Community rating in Group Health plan
12. Policy provisions must conform to state regulations where policy is sold.
Return of Premium rider
Conformity with State Statute provision
Common Accident provision
Common Disaster (Simultaneous Death Act) clause/provision
13. Pre-existing illness/injury; Waiting period; Elimination period; Probationary period; Benefits - Exclusions - Limitations; Underwriting reqs.
Considerations in replacing Health insurance
Types of Renewability provisions
Common Disability Exclusions
7 Pay Test
14. Reappearance of disability w/in 6 mth. period after "recovery" from same disability is considered recurrence - not new disability.
Recurrent disability clause/provision
Graded Premium Whole Life policy
Human Life Value approach
Rescission
15. Same as WL but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Variable Life policy (1 of 2)
Recurrent disability clause/provision
Tax implications of an Annuity (1 of 2)
Residual disability rider
16. War; elective cosmetic surgery; routine dental; work. comp.-covered claims; self-inflicted (intentional); gov't. facility treatment; LTC; private nursing.
Tax implications of an Annuity (1 of 2)
Applicant Representations vs. Warranties
Exclusions for Major Medical plan
Types of Licensed Producers
17. Provides hospital insurance automatically @ age 65 (if FICA qualified) @ no fee but may have deductible & co-pay.
Permanent vs. Temporary disability
Medicare Part A (aka Hospital Insurance or HI)
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Trial Application (aka Request for Offer)
18. Expands individual WL policy to include Term Life for dependents (spouse - children - etc.).
Automatic Premium Loan (APL) provision
Family or Dependents rider
Types of Accident & Health (A&H) providers
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
19. Voiding an insurance contract based on fraud - concealment or material misrepresentation; premiums returned; policy treated as never existing.
Total disability (as commonly defined)
Payment of Premium provision
Rescission
Return of Cash Value rider
20. Funding mechanism whereby employer & employee share cost of premium. Upon death - benefit is shared between employer & beneficiary.
Split Dollar Plan
Waiver of Premium (Waiver of Cost of Insurance) rider
Impairment (Exclusion) rider
Medicare Part A (aka Hospital Insurance or HI)
21. Provides accidental death benefit @ full $ of "principal sum". Dismemberment is paid only @ 50% principal sum ("capital sum").
Accidental Death & Dismemberment (AD&D) Disability rider
Total disability (any-occupational definition)
Experience vs. Community rating in Group Health plan
Family Maintenance policy
22. Federal law which prohibits companies w/ 20+ employees from denying work & medical benefits to employees due to age.
Claim Form (aka Proof of Loss Form) provision
Concealment exceptions
Annuity Classifications (4 of 5): Disposition "pay-out" of proceeds
Age Discrimination in Employment Act (ADEA)
23. Provides professional services - rehabilitation - training/re-training & related costs to assist Insured in returning to work.
Occupational Disability policy
Common Disability Exclusions
Medi-Cal Share Cost plan
Rehabilitation rider
24. Allows Insured to increase death benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age.
Dividend options
CHAMPUS (aka TriCare)
Non-forfeiture options for WL policy
Guaranteed Insurability Life rider
25. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.
Tax implications of Dividends - Loans & Interest
Single Pay Whole Life policy
Credit Life policy
Health Maintenance Organization (HMO)
26. 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.
Legal Action provision
Dread Disease policy
Return of Cash Value rider
Types of Insurers (by domicile)
27. No-charge annuity w/drawals allowed up to 10% of total - THEN penalized on sliding scale based on # policy yrs.; conditionally waived.
Limited Pay Whole Life policy
Annuity surrender charges
Non-forfeiture options for WL policy
Occupational Disability policy
28. Provides for continued operation of business if partner dies - by allowing surviving partner(s) to buy deceased partner's interest in business.
Automatic Premium Loan (APL) provision
Group Disability plan
Business Continuation (aka Buy-Sell) policy
Medicare Part D
29. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).
Annuity surrender charges
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Types of Agency Authority
Common Disability Exclusions
30. Permanent disability due to total loss of sight - hearing - speech or use of 2 + limbs; benefits paid even while continuing to work.
Annuity Classifications (5 of 5): # of lives
Approval Type Conditional receipt
Presumptive disability
Estoppel
31. Same as WL but premium low for set # yrs. - THEN premiums vary (+ or -) based on Insurer's investment returns - w/ Gmax.
Indeterminate Premium Whole Life policy
Civil Rights/Pregnancy Discrimination Act
Age Discrimination in Employment Act (ADEA)
Tax implications of an Annuity (1 of 2)
32. Available for any reason up to full cash value @ fixed (max 8%) OR variable interest rate; loan $ + interest deducted from benefit @ death.
Variable Universal Life policy
Concealment exceptions
Types of reinsurance
Policy loans
33. 'The inability to perform ANY gainful occupation'.
Total disability (any-occupational definition)
Market Value Adjusted (aka Modified Guaranteed) annuity
Notice of Claim provision
Limited Pay Whole Life policy
34. An unintentional mistake committed by an insurance representative; may be covered by E&O insurance.
Accidental Death & Dismemberment (AD&D) Disability rider
Trusts
Errors & Omissions (E&O)
Common Life Exclusions
35. Agents - represent Insurer; Brokers - represent themselves & Insured; Solicitors - represent one agent to solicit leads.
Risk management
Applicant Representations vs. Warranties
Health Maintenance Organization (HMO)
Types of Licensed Producers
36. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.
Insurer (as defined by CIC)
Social Security Benefit (Supplement) rider
Types of Insurers (by authorization)
Reinsurance
37. 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;
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Beneficiary provisions
Fraud
Key Employee Disability policy
38. Agreement - Offer & acceptance; Consideration - application + premium; Legal capacity - licensed &/or competent; Legal purpose - public good.
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
Grace Period provision
Basic Medical plan
Elements to contract
39. 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
Errors & Omissions (E&O)
Risk management
Accidental Death (aka Multiple Indemnity) rider
40. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).
Reinstatement provision
Cost of Living Adjustment (COLA) Life rider
Premium modes
Policy delivery
41. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.
Pure risk vs. Speculative risk
Cost of Living Adjustment (COLA) Life rider
Tax implications of an Annuity (1 of 2)
Incontestability clause/provision
42. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.
Modified Endowment Contract (MEC)
Return of Cash Value rider
Types of Accident & Health (A&H) providers
Rate (as defined by CIC)
43. 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)
Reinsurance
Basic Medical plan
Employer Liability
44. Allows for Term policy renewal @ higher premium w/out medical exam; guarantees insurability; based on actual/attained age.
Revocable vs. Irrevocable beneficiary
Relation of Earnings to Insurance provision
Free Look provision
Renewability provision
45. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Phases of an annuity
Key Employee policy
Total disability (any-occupational definition)
Tax implications of Death Benefit & Cash Value
46. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.
Annuity Classifications (1 of 5): How premium is paid
Conformity with State Statute provision
IRS Penalties for Annuities
Group Disability plan
47. Two death benefit options - Option A: death benefit ONLY; Option B: death benefit + cash value; death benefit NOT guaranteed.
Annuity Classifications (1 of 5): How premium is paid
Transplant/Cosmetic Surgery rider
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
7 Pay Test
48. Must be delivered in person or by certified - registered or 1st-class mail w/ signature - unless waived by Insurance Commissioner.
Beneficiary provisions
Policy delivery
Types of Agency Authority
Estoppel
49. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.
Automatic Premium Loan (APL) provision
Key Employee Disability policy
Medicare Supplement or Medigap policy
Credit Life policy
50. Fraternal - non-profit - members only; Reciprocal - unincorp'd org. - members insure each other; Lloyd's Assoc. - groups sharing risks; Surplus lines - special market risks.
Credit Life policy
Blackout Period
Types of Insurers (miscellaneous)
Total disability (more restrictive definition)