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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. Available for any reason up to full cash value @ fixed (max 8%) OR variable interest rate; loan $ + interest deducted from benefit @ death.
Peril vs. Hazard
Policy loans
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Joint Life (aka "First to die") policy
2. 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
Human Life Value approach
Long Term Care (LTC) policy
Viatical Settlement Provider (VSP)
3. Taxable income (unlike individual plans); can be either short-term - 13-52 wks. max. or long-term - longer than 52 wks.
Common Disaster (Simultaneous Death Act) clause/provision
Insuring clause/provision (aka Insuring Agreement)
Group Disability plan
Types of reinsurance
4. If Insured & primary beneficiary die due to same act (w/in 14 days) - primary assumed 1st to die & contingent beneficiary paid death benefit.
Types of reinsurance
Cost of Living Adjustment (COLA) Disability rider
Common Disaster (Simultaneous Death Act) clause/provision
Claim Form (aka Proof of Loss Form) provision
5. War/Military; Intentional self-inflicted; Aviation (non-commercial); Foreign country; Loss of professional license; Illegal activity; Mental disorders (after 1-2 yrs.).
Flexible Spending Account (FSA)
Common Disability Exclusions
Family or Dependents rider
Reinsurance
6. Potential circumstance that could cause a loss; measured in dollars.
Workers' Compensation insurance
Current Assumption (aka Interest-Sensitive) Whole Life policy
Concealment
Loss exposure
7. 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)
Insurance contract characteristics (1 of 2)
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Family Maintenance policy
8. Provides benefit during Social Security "black-out" period - up to 1 yr.
Social Security Benefit (Supplement) rider
Policy loans
Return of Premium rider
Limited Pay Whole Life policy
9. An attempt to contain costs by employing various strategies - including wellness programs - preventative testing - outpatient & alternative procedures.
IRS Penalties for Annuities
Law of Large Numbers
Common Disaster (Simultaneous Death Act) clause/provision
Medical cost containment (aka Managed care)
10. Qualified Annuity - Tax-deductible contributions & tax-deferred growth but fully taxable w/drawals.
Reinstatement provision
Universal (aka Flexible Premium Adjustable) Life policy (3 of 4)
Variable Life policy (1 of 2)
Tax implications of an Annuity (1 of 2)
11. Actual/Expressed - written powers; Implied - unwritten but customary practices; Apparent - perceived powers.
Change of Occupation provision
Incontestability clause/provision
Types of Agency Authority
Palliative vs. Curative care
12. Provides for continued operation of business if partner becomes disabled - by allowing other partner(s) to buy disabled partner's interest in business.
Exclusions to Work. Comp.
Beneficiary provisions
Business Continuation (aka Buy-Sell) Disability policy
Endowment Life policy
13. Any person - assoc. - org. - partnership - business trust - LLC - or corp. capable of making an insurance contract.
Insurer (as defined by CIC)
Medicaid/Medi-Cal
Single Pay Whole Life policy
Convertibility provision
14. Receipt whereby coverage incepts ONLY after underwriting approval.
Retrocession
Approval Type Conditional receipt
Time Limit on Certain Defenses provision
Medi-Cal Share Cost plan
15. Provides coverage for specific disease(s) - such as cancer or leukemia.
Cost of Living Adjustment (COLA) Life rider
Dread Disease policy
Incontestability clause/provision
Departments of an Insurer
16. Type of partial disability rider - which pays fluctuating % of lost income w/out time limit.
Graded Premium Whole Life policy
Residual disability rider
Universal (aka Flexible Premium Adjustable) Life policy (2 of 4)
Types of Insurers (by authorization)
17. Compensates business for loss due to death or disability of key employee; premiums not deductible but benefits tax-free.
Key Employee policy
Common Disability Exclusions
Types of Agency Authority
Supplemental Major Medical plan
18. Dependent children are covered until 19 or 23 (full-time student only) or until self-sufficient (if handicapped).
Plans A-L of Medical Supplement or Medigap
Phases of an annuity
Preferred Provider Organization (PPO)
Dependent coverage
19. Benefits automatically increase annually based on inflationary index (i.e. Consumer Price Index) OR flat rate (5% max.).
Risk management
Cost of Living Adjustment (COLA) Disability rider
Annuity Classifications (2 of 5): When benefits begin
Waiver of Premium provision
20. Life license + NASD (FINRA) Series 6 or 7.
Rehabilitation rider
Cost of Living Adjustment (COLA) Life rider
Requirements to sell variable life products
24 Hour Coverage (CA)
21. Same as WL but death benefit decreases each yr. w/ dividends paid annually to offset decrease.
Beneficiary provisions
Insurable interest
Modified Endowment Contract (MEC)
Enhanced Ordinary (aka Extraordinary) Whole Life policy
22. Written contract to transfer risk of premature death from one party to another; pays stated sum upon death; creates instant estate.
Disability Income policy
Life insurance policy
Medicare Part A & B "Gaps"
Recurrent disability clause/provision
23. Privately-sold policies to provide benefits not covered by Medicare; divided into 12 plans listed alphabetically A - L; 30-day free look; guaranteed renewable.
Return of Cash Value rider
Accidental Death & Dismemberment (AD&D) Disability rider
Medicare Supplement or Medigap policy
Health Maintenance Organization (HMO)
24. Allows Insured to increase benefit w/out medical exam (subject to age max.) w/ additional premium rate determined @ attained age; must prove income increase.
Approval Type Conditional receipt
Guaranteed Insurability (aka Additional Purchase or Future Increase) Disability rider
Equity Indexed annuity
Legal Action provision
25. Provides increased death benefit if death occurs w/in 90 days & as result of accident; relatively INexpensive add-on.
Accidental Death (aka Multiple Indemnity) rider
Departments of an Insurer
Tax implications of Dividends - Loans & Interest
Estoppel
26. Written contract that provides INCOME @ high interest rate for fixed period OR for annuitant's lifetime w/ possible death benefit.
Elements to contract
Automatic Premium Loan (APL) provision
Valid life insurance contracts must identify...
Annuity
27. Combination of Basic Medical & Major Medical in one policy; Basic pays 1st - then Major Medical w/ corridor deductible.
Presumptive disability
Current Assumption (aka Interest-Sensitive) Whole Life policy
Total disability (any-occupational definition)
Comprehensive Major Medical plan
28. To "make whole again" w/out benefit or detriment; neither monetary profit nor loss.
Medicare Part A & B "Gaps"
Tax implications of an Annuity (1 of 2)
Indemnify
Residual disability rider
29. 'The inability to perform ANY gainful occupation'.
Total disability (any-occupational definition)
Medicare Supplement or Medigap policy
Convertibility provision
Approval Type Conditional receipt
30. Term Life policy w/ decreasing death benefit; usually used to secure credit (loan) w/ lender as beneficiary & borrower as Insured.
Mortality vs. Morbidity tables
Credit Life policy
Cash value
Common Life Exclusions
31. Partially state-funded benefits for low-income people whereby cost of care is shared between state & recipient - based on income.
Enhanced Ordinary (aka Extraordinary) Whole Life policy
Penalties for violating AIDS/HIV privacy laws
Medi-Cal Share Cost plan
Relation of Earnings to Insurance provision
32. Revocable - changeable anytime w/ Change of Beneficiary Form; Irrevocable - not changeable w/out beneficiary permission.
Total disability (as commonly defined)
Revocable vs. Irrevocable beneficiary
Common Life Exclusions
Renewability provision
33. Non-qualified Annuity - Non-deductible contributions & tax-deferred growth. At pay-out - tax-free principal but taxable growth.
Misstatement of Age/Sex provision
Presumptive disability
Tax implications of an Annuity (1 of 2)
Departments of an Insurer
34. Two death benefit options - Option A: death benefit ONLY; Option B: death benefit + cash value; death benefit NOT guaranteed.
Recurrent disability clause/provision
Limited Pay Whole Life policy
Palliative vs. Curative care
Universal (aka Flexible Premium Adjustable) Life policy (4 of 4)
35. Identical to Incontestable Clause in Life policy.
Time Limit on Certain Defenses provision
Policy delivery
Grace Period provision
Relation of Earnings to Insurance provision
36. Same as WL but premium low for 1st 5 yrs. - THEN has annual premium increases for set # yrs. - THEN level premium.
Cash value
Graded Premium Whole Life policy
Adverse selection
Non-Occupational Disability policy
37. Insurer has right to rescind policy & return premium if material misrepresentation in application is found w/in 1st 2 yrs.
Incontestability clause/provision
Accidental Death & Dismemberment (AD&D) Life policy
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
Convertibility provision
38. Summary of coverage including premium & mode of payment - death benefit - beneficiary(ies) - exclusions - & promise to pay.
Impairment (Exclusion) rider
Insurer (as defined by CIC)
Insuring clause/provision (aka Insuring Agreement)
Joint Life (aka "First to die") policy
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
Earned vs. Unearned premium
Factors that determine premium
Juvenile Life (aka Jumping Juvenile) policy
40. Representation - oral or written statement made to best of knowledge or belief; Warranty - statement guaranteed/presumed/understood to be true.
Limited Pay Whole Life policy
Retrocession
Applicant Representations vs. Warranties
Loss of Earnings Test
41. 1: Single (lump sum) premium; 2: Periodic premiums - can be level (fixed $) OR flexible from mth. to mth. (w/ req. min.)
Experience vs. Community rating in Group Health plan
Annuity Classifications (1 of 5): How premium is paid
Preferred Provider Organization (PPO)
Social Security (aka Old Age Survivors Disability Health Insurance or OASDHI)
42. Underwriting - determines insurability; Marketing/Sales - determines products; Actuarial - determines rates; Claims - investigates/pays claims.
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Supplemental Major Medical plan
Departments of an Insurer
Mortality vs. Morbidity tables
43. Excludes coverage for suicide during 1st 2 yrs. ONLY but - if it does - all premiums must be returned to beneficiary.
Annuity
Health Maintenance Organization (HMO)
Accelerated Benefits (aka Terminal Illness or Living Benefits) rider
Suicide clause/provision
44. Expands individual WL policy to include Term Life for dependents (spouse - children - etc.).
Family or Dependents rider
Exclusions for Major Medical plan
Blue Cross/Blue Shield
Types of Licensed Producers
45. Compensates business for loss due to disability of key employee; premiums not deductible but benefits tax-free.
Payment of Premium provision
Long Term Care (LTC) policy
Key Employee Disability policy
Needs approach (most common)
46. Part A - Inpatient hospital deductibles vary on # of days; limited reserve days; finite benefit; 1st 3 pints blood; Part B - 20% co-payment.
Transplant/Cosmetic Surgery rider
Life insurance policy
Business Continuation (aka Buy-Sell) policy
Medicare Part A & B "Gaps"
47. Coverage for catastrophic loss w/ high limits - front end deductible; co-insurance (80/20%); blanket coverage; stop loss max.
Waiver of Premium provision
Market Value Adjusted (aka Modified Guaranteed) annuity
Non-Occupational Disability policy
Major Medical plan
48. Responsible adult trustee designated to manage death benefits for minor child beneficiary until adulthood.
Trusts
Settlement options for Life policy (2 of 2)
Blue Cross/Blue Shield
Business Continuation (aka Buy-Sell) Disability policy
49. War - 2 types; Suicide (1st 2 yrs.); Aviation (non-commercial); Hazardous hobbies; Criminal acts; Alcohol/Drug influenced.
Common Life Exclusions
Palliative vs. Curative care
Elements to contract
Credit Life policy
50. If 2 or more family members are injured in the same accident - only payment of a single deductible is required.
Medicare Part B (aka Supplemental Medical Insurance or SMI)
Common Accident provision
Variable Life policy (1 of 2)
Non-Occupational Disability policy