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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. Conditional - coverage is conditional; Personal - parties are people; Good faith - honesty/integrity; Fiduciary - req's financial trust.
Insurance contract characteristics (2 of 2)
COBRA Time Limitations
Peril vs. Hazard
Survivorship (aka "Last to die") policy
2. Unintentional - up to $1 -000 + legal $; Intentional - $1 -000-5 -000 + legal $; If harmful - misdemeanor + up to 1 yr. prison + up to $10 -000.
Key Employee policy
Phases of an annuity
Tax implications of an Estate
Penalties for violating AIDS/HIV privacy laws
3. Death benefit determined by Insured's projected lost earnings potential.
Dependent coverage
Employer-Administered plan
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Human Life Value approach
4. Time extension of benefits based on "qualifying" event. 18 mth. extension if laid off or fired; 36 mth. extension if death - divorce or child leaves home.
Notice of Claim provision
Employer-Administered plan
Term Life policy
COBRA Time Limitations
5. 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.
Dividend options
Types of hazards
Medicare Part A & B "Gaps"
Waiver of Premium provision
6. Benefits NOT taxable; employer-paid premiums deductible to employer; individual plans not deductible unless over 7 1/2% of adjusted gross income - then excess deductible.
Concealment
Term Life policy
Tax implications of medical plans
Annuity Classifications (1 of 5): How premium is paid
7. Provides usual & customary business expenses (rent - utilities - salaries - mortgage) if owner becomes disabled; premiums deductible - benefits taxable.
Automatic Premium Loan (APL) provision
Variable Life policy (1 of 2)
Concealment
Business Overhead Expense (BOE) Disability policy
8. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.
Law of Large Numbers
Partial disability rider
Annuity
Annuity Classifications (1 of 5): How premium is paid
9. Potential circumstance that could cause a loss; measured in dollars.
Loss exposure
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Settlement options for Life policy (2 of 2)
10. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).
Tax implications of an Annuity (1 of 2)
Common Disability Exclusions
Needs approach (most common)
Medical cost containment (aka Managed care)
11. Non-qualified Annuity - Non-deductible contributions & tax-deferred growth. At pay-out - tax-free principal but taxable growth.
Point of Service plan
Tax implications of an Annuity (1 of 2)
Indeterminate Premium Whole Life policy
Reinstatement provision
12. 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
Incontestability clause/provision
Reinstatement provision
Whole (aka Permanent or Straight) Life policy
13. A&H - A&S - Sickness only; Medical; Disability; Accident only; Travel accident; LTC; Medicare supplement; AD&D; Dental/Vision/Prescription; Limited.
Dividend options
IRS Penalties for Annuities
Types of Accident & Health insurance
Rate (as defined by CIC)
14. Death benefit determined by Insured's financial goals & needs (minus assets).
Medicare Part D
Limited Pay Whole Life policy
Needs approach (most common)
Cross Purchase Plan
15. Insurance purchased by other Insurer(s) to spread or diversify risk; promotes industry stability.
Common Life Exclusions
Types of Accident & Health insurance
Reinsurance
Consolidated Omnibus Budget Reconciliation Act (COBRA)
16. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.
Renewability provision
Family policy
Rehabilitation rider
Insuring clause/provision (aka Insuring Agreement)
17. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Group Disability plan
Types of Insurers (by authorization)
Business Overhead Expense (BOE) Disability policy
Exclusions to Work. Comp.
18. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.
Incontestability clause/provision
Medical Savings Account (MSA) & Health Savings Account (HSA)
Tax implications of medical plans
Proof of Loss provision
19. A lapsed policy may be reinstated if not longer than 3-5 yrs. - & proof of insurability re-established - & back premiums + interest paid.
Types of Accident & Health (A&H) providers
Errors & Omissions (E&O)
Reinstatement provision
Policy delivery
20. Private sector (Commercial) - provides LA&H - P&C - & LTC; Public sector (Gov't) - provides flood - work. comp. - Medicare/Medicaid - Group Life (SGLI/FEGLI).
Spendthrift provision
Rehabilitation rider
Types of Insurers (by sector)
Convertibility provision
21. Policy owner has 90 days from date of loss to submit proof of loss to Insurer; valid claim must be paid immediately upon receipt.
Accidental Death & Dismemberment (AD&D) Disability rider
Concealment exceptions
Proof of Loss provision
Disability Income policy
22. 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.
Non-forfeiture options for WL policy
Tax implications of an Estate
Types of reinsurance
Business Overhead Expense (BOE) Disability policy
23. Price of insurance per exposure unit.
Loss exposure
Insurance contract characteristics (1 of 2)
Rate (as defined by CIC)
Small Employer Medical Expense plan
24. Commercial (private) companies; HMOs; PPOs; Blue Cross/Blue Shield; Employer-sponsored plans; Government.
Key Employee policy
Types of Accident & Health (A&H) providers
Viatical Settlement Provider (VSP)
Transplant/Cosmetic Surgery rider
25. Identical to Incontestable Clause in Life policy.
Mortality vs. Morbidity tables
Whole (aka Permanent or Straight) Life policy
Cost of Living Adjustment (COLA) Disability rider
Time Limit on Certain Defenses provision
26. Provides medical & personal services for people needing extended assistance w/ Activities of Daily Living (ADL). Other benefits include: assisted living care; respite care; hospice care; adult day care.
Medi-Cal Share Cost plan
Plans A-L of Medical Supplement or Medigap
Dread Disease policy
Long Term Care (LTC) policy
27. Policy covering minor child; premium fixed but death benefit increases by 5 times @ age 18 or 21.
Proof of Loss provision
Entire Contract provision
Group Disability plan
Juvenile Life (aka Jumping Juvenile) policy
28. Provides hospital insurance automatically @ age 65 (if FICA qualified) @ no fee but may have deductible & co-pay.
COBRA Time Limitations
Residual disability rider
Medicare Part A (aka Hospital Insurance or HI)
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
29. Federal law which allows health coverage portability when changing jobs - so long as previous coverage was in effect 63+ days; allows some tax deductibility for LTC.
Health Insurance Portability and Accountability Act (HIPAA)
Departments of an Insurer
Cost of Living Adjustment (COLA) Disability rider
Health Maintenance Organization (HMO)
30. After 2-3 yrs. - Whole Life policy equity builds tax-deferred @ fixed interest rate until it equals death benefit; borrowable but taxable.
Accidental Death (aka Multiple Indemnity) rider
Types of Accident & Health (A&H) providers
Annuity surrender charges
Cash value
31. Fixed premium w/ guaranteed min. death benefit that may increase due to higher than expected investment returns.
Accidental Death & Dismemberment (AD&D) Life policy
Variable Life policy (2 of 2)
Types of Accident & Health insurance
Convertibility provision
32. Permanent - not recoverable (spinal cord injury); Temporary - recoverable (temp. illness/injury - broken limb).
Tax implications of an Annuity (1 of 2)
Exclusions to Work. Comp.
Permanent vs. Temporary disability
Medicare Part A & B "Gaps"
33. Provides professional services - rehabilitation - training/re-training & related costs to assist Insured in returning to work.
Rehabilitation rider
Types of Insurers (by sector)
Insuring clause/provision (aka Insuring Agreement)
Modified Premium Whole Life policy
34. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.
CA Work. Comp. Statutes
Types of Insurers (by domicile)
Common Accident provision
Annuity surrender charges
35. Waives premium upon disability of Insured until return to work; disability must persist for 6 mths. or longer. Cash value & dividends not affected.
Waiver of Premium (Waiver of Cost of Insurance) rider
Major Medical plan
Preferred Provider Organization (PPO)
Variable Universal Life policy
36. Same as WL but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Tax implications of an Estate
Common Life Exclusions
Medicare Part A (aka Hospital Insurance or HI)
Variable Life policy (1 of 2)
37. Insurer has right to adjust (+ or -) death benefit if age or sex is misstated but normally doesn't void policy.
Rehabilitation rider
Survivorship (aka "Last to die") policy
Partial disability rider
Misstatement of Age/Sex provision
38. Specialized policy covering diagnostic & preventative dental care; often no deductible; co-insurance; expensive; may be included w/ medical plan.
Insurable interest
Phases of an annuity
Dental Plan
Common Accident provision
39. Intentional OR unintentional failure to disclose material underwriting facts that should have been disclosed; grounds for policy rescission.
Concealment
Types of Term Life policies
Beneficiary provisions
Flexible Spending Account (FSA)
40. Death benefits & premium automatically increase annually based on inflationary index (i.e. Consumer Price Index).
Whole (aka Permanent or Straight) Life policy
Cost of Living Adjustment (COLA) Life rider
Factors that determine premium
Valid life insurance contracts must identify...
41. Same as WL but w/ Decreasing Term rider; upon death - pays monthly income for REMAINING term AFTER which pays full death benefit.
Elements to contract
Family Income policy
Primary Insurance Amount (PIA)
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
42. Application submitted w/out premium; no coverage until submission of full consideration & completed Statement of Continued Good Health.
Types of Accident & Health (A&H) providers
Trial Application (aka Request for Offer)
Accidental Death (aka Multiple Indemnity) rider
Graded Premium Whole Life policy
43. Same as Universal Life but cash value put in investment vehicles chosen by policy owner (stocks - bonds - munis.); cash value NOT guaranteed.
Workers' Compensation insurance
Variable Universal Life policy
Tax implications of Disability policy
Fraud
44. Coverage for catastrophic loss w/ high limits - front end deductible; co-insurance (80/20%); blanket coverage; stop loss max.
Beneficiary provisions
Dread Disease policy
Social Security Benefit (Supplement) rider
Major Medical plan
45. Unilateral - Insurer provides contract; Adhesion - parties must adhere to terms; Aleatory - benefits may not inure equally.
Medicare Part D
Insurance contract characteristics (1 of 2)
Medicaid/Medi-Cal
Comprehensive Major Medical plan
46. War; elective cosmetic surgery; routine dental; work. comp.-covered claims; self-inflicted (intentional); gov't. facility treatment; LTC; private nursing.
Elimination (aka Waiting) period
Types of Insurers (by ownership)
Exclusions to Work. Comp.
Exclusions for Major Medical plan
47. Prevents overinsuring in order to profit from disability by coordinating benefits between Insurers.
Relation of Earnings to Insurance provision
Medicare Part C (aka Medicare Advantage)
Graded Premium Whole Life policy
Elimination (aka Waiting) period
48. Provides 24 hr. health coverage both "on" & "off" job - but may cause coverage duplication & coordination challenges.
Valid life insurance contracts must identify...
Medicare Part C (aka Medicare Advantage)
Retrocession
24 Hour Coverage (CA)
49. Prohibited w/ regard to testing for people of same class; test results must remain confidential; coverage may be declined (once discovered).
Point of Service plan
AIDS/HIV discrimination
Permanent vs. Temporary disability
Waiver of Premium provision
50. Benefits automatically increase annually based on inflationary index (i.e. Consumer Price Index) OR flat rate (5% max.).
Types of Agency Authority
Cost of Living Adjustment (COLA) Disability rider
Approval Type Conditional receipt
Family policy