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. Palliative - treatment to manage pain; Curative - treatment to cure illness/condition.






2. Same as WL but policy owner can adjust death benefit w/ corresponding premium adjustments; mostly obsolete.






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






4. Pre-existing illness/injury; Waiting period; Elimination period; Probationary period; Benefits - Exclusions - Limitations; Underwriting reqs.






5. Federal law which prohibits companies w/ 15+ employees from decreasing coverage benefits for women affected by pregnancy or childbirth.






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






7. Must be delivered in person or by certified - registered or 1st-class mail w/ signature - unless waived by Insurance Commissioner.






8. 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).






9. Same as Comprehensive Major Medical but w/ integrated deductible; much more expensive.






10. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.






11. Same as WL but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.






12. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.






13. Peril is the CAUSE of loss. Hazard is a condition that increases LIKELIHOOD of loss.






14. 'The inability to perform ANY reasonable occupation based on education - training or experience'.






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






16. 1: Fixed - guaranteed fixed monthly income & fixed interest rate; 2: Variable - unguaranteed; monthly income varies based on stocks/bond returns.






17. Same as WL but w/ Decreasing Term rider; upon death - pays monthly income for REMAINING term AFTER which pays full death benefit.






18. If total premiums paid w/in 1st 7 yrs. exceed net level premium that should have been paid - policy is an MEC.






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






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






21. Covers disabilities occurring ONLY "off" job; benefits do not overlap work. comp. (i.e. Group plan).






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






23. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.






24. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.






25. Both Contributory & Non-contributory Group policies are deductible to employer (not employee) but benefits are taxable. Individual policy premium is NOT deductible but benefit is received tax-free.






26. No-charge annuity w/drawals allowed up to 10% of total - THEN penalized on sliding scale based on # policy yrs.; conditionally waived.






27. Experience - rates impacted by actual prior claim experience of actual group; Community - identical rates used for entire community - regardless of experience.






28. Group plan initially self-funded by employer (like SIR); after which - group plan Insurer covers (up to policy limit); requires TPA.






29. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.






30. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.






31. Upon death - death benefit is paid + the aggregate of cash value accumulated to date; add-on to WL policy ONLY.






32. Privately-provided or Medicare-provided (if no private carrier) prescription drug plans for qualified individuals but w/ premium - deductible & co-pay.






33. Same as WL but cash value increases @ current interest rates (not set); premium can start low or high & may change.






34. Prohibited w/ regard to testing for people of same class; test results must remain confidential; coverage may be declined (once discovered).






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






36. Annuity distributions prior to age 59 1/2 incur a 10% IRS penalty EXCEPT for death - disability - immediate annuity - or rollover.






37. Treating or mitigating loss exposures through 1: avoidance; 2: retention (deductibles); 3: sharing; 4: reduction; or 5: transfer.






38. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.






39. Price of insurance per exposure unit.






40. Domestic - within home state; Foreign - outside home state; Alien - outside home country.






41. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.






42. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.






43. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.






44. Allows Insured to increase death benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age.






45. Preferred or Preferred Smoker; Standard or Standard Smoker; Substandard; Denied.






46. Savings account for medical expenses; Tax-deductible contributions; tax-deferred growth; tax-free for qualified use; taxable for non-qualified use.






47. Two death benefit options - Option A: death benefit ONLY; Option B: death benefit + cash value; death benefit NOT guaranteed.






48. Provides 24 hr. health coverage both "on" & "off" job - but may cause coverage duplication & coordination challenges.






49. Identical to Incontestable Clause in Life policy.






50. Temp. coverage for set duration w/ death benefit ONLY (no cash value) - offers largest $ for lowest premium; renewable; convertible.