Indiana Life and Health Insurance State Exam (Part 3)

K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary?

$20,000 death benefit

P purchases a $50,000 term life insurance policy in 2005. One of the questions on the application ask if P engages in scuba diving, to which P answers "No". The policy is then issued with no scuba exclusions. In 2010, P takes up scuba diving and dies in a scuba-related accident in 2011. What will the insurer pay to P's beneficiary?

$50,000 minus any outstanding policy loans

P received Disability income benefits for 3 months then returns to work. She is able to work one month before her condition returns, leaving her disabled once again. What would the insurance company most likely regard this second period of disability as?

A recurrent disability

Which of the following actions does the Insurance Commissioner NOT have the power to conduct?

Activate insurance companies' financial reserves

A "reimbursement policy" pays what amount of covered Long-Term Care expenses?

Actual covered expenses up to the daily maximum

B owns a Whole Life policy with a guaranteed insurability option that allows him to purchase, without evidence of insurability, stated amounts of

Additional Whole Life coverage at specified times

Insurance companies that are organized in countries outside the Unites States are referred to as:

Alien

When an insurance application is taken by a producer, which of these statements is true?

Any changes made on the application require the applicant's initials

A policy loan is made possible by which of these life insurance policy features?

Cash value provision

How do life insurance companies handle cases where the insured commits suicide within the contract's stated Contestable period?

Claims are denied under the Suicide clause of the policy

When an employee is required to pay a portion of the premium for an employer/employee group health plan, the employee is covered under which of the following plans?

Contributory

What group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability?

Conversion

Which of the following BEST describes a Hospital Indemnity policy?

Coverage that pays a stated amount per day of a covered hospitalization

____ of personal life insurance premiums is usually deductible for federal income tax purposes.

0%

Premature IRA distributions are assessed a penalty tax of

10%

Insurers may request a hearing within ____ if their policy is rejected.

20 days

How long does an individual have to "rollover" funds from an IRA or qualified plan?

60 days

A life policy loan in Indiana cannot charge a fixed rate of interest higher than

8%

Credit life insurance is typically issued with which of the following types of coverage?

Decreasing Term

Under a trustee group life policy, who would be eligible for a certificate of coverage?

Employee

P owns a $25,000 life policy that pays the face amount to him if he lives to age 70, or to his beneficiary if he dies before age 70. What kind of policy does P own?

Endowment at age 70

What is the purpose of the Indiana Life and Health Insurance guaranty Association?

Ensures that claims filed against insolvent insurance companies will be paid

When an individual is planning to protect his family with life insurance, one method of doing so is called needs analysis. What exactly does needs analysis involve?

Establishes the needs of the individual and his dependants

Long term Care policies will usually pay for eligible benefits using which of the following methods?

Expense incurred

A life insurance application may be rejected on the basis of all of these EXCEPT:

Gender

Which of the following is a requirement to be eligible for a group life policy in Indiana?

Group must be formed for a purpose other than obtaining Insurance

a 66 year old is covered under a group health plan while employed with a business that has 40employees. If she injures herself while walking in the park, what coverage will be considered primary?

Her group health plan

What would be an accurate definition of "controlled business"?

Insurance business that is written on the producer's own life, property, or interests

Which of the following combination plans is designed to protect an insured from an unpaid mortgage balance upon premature death?

Joint Life

Which of these factors do NOT play a role in the underwriting of a life insurance policy?

Marital status

If a retiree on Medicare required five hospital stays in one year, which policy would provide the best insurance for excess hospital expenses?

Medicare supplement

Which Unfair Competition Practice involves a producer suggesting that an insurance policy is like a share of stock?

Misrepresentation

Periodic health claim payments MUST be made at least

Monthly

In Indiana, which of the following MUST be delivered to a policyowner upon the sale of an individual life insurance policy?

Policy summary and Buyer's guide

Q applied for life insurance and submitted the initial premium on January 1. The policy was issued February 1, but it was not delivered by the agent until February 7. Q is dissatisfied and returns the policy February 13. How will the insurer handle this situation?

Policy was returned within the free-look period, premium will be fully refunded

Which of these describe a participating insurance policy?

Policyowners are entitled to receive dividends

A Limited-Pay Life Policy has:

Premium payments limited to a specified number of years

T is covered by two health insurance plans: a group plan through his employer and his spouse's plan as a dependent. Under the Model Group Coordination of Benefits Provision, when T files a claim, his employer's plan is considered the:

Primary carrier

The Insurance Commissioner is authorized:

To enforce state laws relating to insurance

All of these are considered sources of underwriting information about an applicant EXCEPT

Rating Services

When an existing life insurance policy is terminated so that a new life insurance policy can be purchased, this transaction is referred to as:

Replacement

When a person returns to work after a period of total disability but cannot earn as much as he or she did before the disability, this situation is called which of the following?

Residual Disability

Which of these terms accurately defines an underwriter's assessment of information on a life insurance application?

Risk Classification

Which mode of payment is NOT used by health insurance policies?

Single Premium

Which of the following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party?

Subrogation

An individual who purchases a life annuity is given protection against:

The risk of living longer than expected

At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act?

Under completion of the application

the part of a life insurance policy guaranteed to be true is called a(n):

Warranty

Which of the following would be a valid reason for suspending or revoking an insurance producer's license?

Writing primarily controlled business

A disabled dependent's continued coverage under a family health plan would be discontinued if,

documentation of the disability is not provided to the insurer