Indiana State Life and Health Insurance Exam
In Indiana, which o the following is considered an Unfair Competition Practice? Replacement Coercion Aleatory Subrogation
Coercion
Which of these actions is taken when a policyowner uses a Life Insurance policy as collateral for a bank loan? Revocable Assignment Beneficiary Change Irrevocable Assignment Collateral Assignment
Collateral Assignment
How long does an insurance company appointment remain in force for? 1 Year 2 Years 3 Years Until Terminated
Until Terminated
In Indiana, the maximum fine that the Commissioner can impose on a producer or company who violates a cease and desist order is____per violation? $10,000 $15,000 $20,000 $25,000
$25,000
In Indiana, the maximum fine the the commissioner can impose on a producer or company who violates a cease and desist order is___per violation? $10,000 $15,000 $20,000 $25,000
$25,000
The free-look period for life insurance policies issued in Indiana is ____ days? 10 14 30 45
10
What is the minimum Grace Period for an individual health policy that is paid monthly? 5 Days 10 Days 15 Days 30 Days
10 Days
How many days is a temporary producers license valid? 30 60 90 180
180
The Indiana Children's Health Insurance Program provides children of need with health benefits until the child reaches age ____ or becomes financially ineligible, whichever is earlier? 18 19 20 21
19
An individual life insurance policy sold in Indiana can be contested by the insurer only during the first____years of the contract? 2 3 4 5
2
If a new life insurance policy is replacing an existing one, the insured is given the right to return for a full refund of at least ____ days after policy delivery? 10 20 30 40
20
A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy. which of these statements made by the producer would be correct? Straight life accumulates faster than Limited-Pay Life 20-Pay Life accumulates cash value faster than Straight Life Cash value accumulation of both 20-Pay Life and Straight Life depend on the insurers financial rating 20-Pay Life and Straight Life accumulate cash value at the same rate
20-Pay Life accumulates cash value faster than Straight Life
The Affordable Care Act provides health coverage to dependents up to the age of? 18 21 26 28
26
According to Indiana law, how long is the Free Look period for a Medicare Supplement Policy? 10 Days 20 Days 30 Days 40 Days
30 Days
In the event of employment termination, a person covered by a group policy also has the right to convert such coverages to an individual policy within____days without proving insurability? 15 30 31 45
31
to continue health coverage for a newborn, the policyowner must notify the insurer of birth and provide the first premium payment within ____ days of birth? 10 15 30 31
31
What is the excise tax rate the IRS imposes on individuals aged 70 1/2 or older who do not take the required minimum distributions from their qualified retirement plan? 30% 40% 50% 60%
50%
Long-Term Care policies sold in Indiana may exclude coverage for pre-existing conditions for? 6 Months 8 Months 12 Months 18 Months
6 Months
A life policy loan in Indiana cannot charge a fixed of interest higher than? 7% 8% 9% 10%
8%
Eligible employees must be added to group health coverage no later than ____ days after their first day of employment? 30 45 60 90
90
A nonprofit incorporated society that does not have capital stock and operates for the sole benefit of its members is known as? A fraternal benefit society A stock insurer A mutual insurer The Life and Health Insurance Guaranty Association
A fraternal benefit society
What is required for a Producer to be in compliance with Rule 13, Life Insurance Advertising? A potential Applicant must be told the the Producer is currently licensed for any Life Insurance transaction A potential Applicant must be told that Life insurance is the exclusive subject of the sale A Producer is required to notify potential Applicants that dividends are guaranteed A Producer is required to have all sales materials approved by the commissioner
A potential Applicant must be told that Life insurance is the exclusive subject of the sale
Which of these is an example of twisting? A producer maliciously aligns another insurance company's financial status A producer misrepresents a policy to induce a policyowner to surrender an existing policy A producer reduces the commission in order to sell a policy A producer induces a policyowner with something of value to purchase a policy
A producer misrepresents a policy to induce a policyowner to surrender an existing policy
What is Indianas definition of Life insurance replacement? A transaction in which coverage on an existing policy is increased A transaction in which group life coverage is converted to an individual policy A transaction in which a new policy is bought and an old policy is terminated A transaction in which a policyowner reinstates a lapsed policy
A transaction in which a new policy is bought and an old policy is terminated
L takes out a life insurance policy and dies 10 years later. During the claim process, the insurer discovers that L had understated her age on the application. Under the Misstatement of Age provision, the insurer will? Pay the death benefit in full Adjust the death benefit to an increased amount Adjust the death benefit to a reduced amount Deny the claim
Adjust the death benefit to a reduced amount
Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of unequal values reflects which of the following insurance contract features? Aleatory Adhesion Unilateral Consideration
Aleatory
All of the following statements regarding group health insurance is true except? Premiums are usually determined by the claims experience of the group A master contract is issued for the group An individual policy is given to each member Group health insurance premiums are typically lower than individual health insurance premiums
An individual policy is given to each member
Which of the following is an example of false advertising? An insurer advertising in an insurance trade journal An insurance company publishing misleading information about its policy's provisions A producer spending more than $25 on marketing gifts for a client Paid testimonials from celebrity endorsements
An insurance company publishing misleading information about its policy's provisions
What does a certificate of authority allow? A nonresident producer to conduct insurance business An insurance company to exceed coverage limits that the Guaranty Fund covers An insurance company to conduct insurance business in Indiana A resident producer to sell insurance contracts
An insurance company to conduct insurance business in Indian
When a policyowner cash surrenders a Universal Life insurance policy in it's early years, this may be considered a red flag for a? Federal Fair Credit Act Violation Title 18 Fraud Violation Anti-Money Laundering Violation Unfair Trade Practice Violation
Anti-Money Laundering Violation
Which of the following is the most important factor when deciding how much Disability Income coverage an applicant should purchase? Applicant'sOccupation Applicant's Monthly Income Applicant's Health Applicant's Previous Disabilities
Applicant's Monthly Income
The coordination of benefits provision exists in order to? Avoid duplication of benefits payments Avoid excessive hospitalization Lower insurance premiums Maximize patient care
Avoid duplication of benefits payments
In order to establish a Health Reimbursement Arrangement, it must? Be offered in conjunction with other employer provided health benefits Limit the benefits to prescription drugs only Be established be the employer Limit the amount of money the employee can contribute toward the account
Be established be the employer
Which of the following is a requirement to obtain a nonresident producer license in Indiana? Maintain a specific sales quota in resident state Own real estate in Indiana Be licensed as a producer in the producer's state of domicile Pass a special examination for nonresident producers
Be licensed as a producer in the producer's state of domicile
A domestic insurance company in Indiana must? Be organized under Indiana insurance laws Own real estate in Indiana Write insurance on risks located only in Indiana Honor the charter of the NAIC
Be organized under Indiana insurance laws
Medicaid was designed to assist individuals who are? Federal employees Disabled In poor health Below a specific income limit
Below a specific income limit
As a condition for a loan, a bank requires the borrower to purchase credit insurance from a specific company. What is the bank guilty of? Coercion Defamation Rebating Misrepresentation
Coercion
If an existing Accident and Health policy is being replaced with a new policy, the decision to replace should not be based on? Waiting Periods Commissions to be Paid Exclusion and Limitations Underwriting Requirements
Commissions to be Paid
Which of the following consists of an offer, acceptance, and consideration? Warranty Estoppel Contract Representation
Contract
Which provision allows the policyowner to change a term life policy to a permanent one without providing proof of good health? Modification Conversion Exchange Adjustable
Conversion
Jill is covered under two Group Health policies, one through her employer and one through her husband's employer. If Jill suffers a loss, which policy provision dictates the primary coverage? Replacement Time Payment of Claims Notice of Claim Coordination of Benefits
Coordination of Benefits
Jill is covered under two Group Health policies, one through her employer and one through her husbands employer. If Jill suffers a loss, which policy provision dictates the primary coverage? Replacement Time Payment of Claims Notice if Claim Coordination of Benefits
Coordination of Benefits
What is required for Producers to sell Long Term Care in Indiana? Eight hours of post licensing education specifically devoted to LTC Twelve hours of post licensing education specifically devoted to LTC A Chartered Long Term Care designation Passing a separate examination specifically devoted to Long Term Care
Eight hours of post licensing education specifically devoted to LTC
Non-occupational disability coverage is designed for? 24 hour protection Those who are exempt from Workers' Compensation coverage Sole proprietors and self-employed individuals Employees who suffer non-work related disabilities, since work-related disabilities are covered be Workers' Compensation
Employees who suffer non-work related disabilities, since work-related disabilities are covered be Workers' Compensation
What is the purpose of the Indiana Life and Health Insurance Guaranty Association? Ensures that claims filled against insolvent insurance companies will be paid Enforces Indianas insurance regulations Approves policy forms Underwrites high-risk insurance applicants
Ensures that claims filled against insolvent insurance companies will be paid
An insurance applicant must be informed of an investigation regarding his/her reputation and character according to the? State Guaranty Association Fair Labor Standards Board Fair Credit Reporting Act National Association of Insurance Commissioners
Fair Credit Reporting Act
From what authority derives the requirement that an insurance application contains a disclosure stating that an investigative consumer report may be obtained on an applicant? Fair Credit Reporting Act Medical Information Bureau Part 3 of the Application Life Insurance Buyer's Guide
Fair Credit Reporting Act
What is considered a valid reason for small businesses to insure the lives of its major shareholders? To provide an income for the surviving dependents Reduce the company's tax liability To pay for final expenses Fund a buy-sell agreement
Fund a buy-sell agreement
With Accidental Death and Dismemberment policies, what is the purpose of the Grace Period? Gives the policyowner additional time to pay overdue premiums Gives the policyowner additional time to file a lawsuit Gives the policyowner additional time to file a claim Gives the policyowner additional time to provide proof of loss
Gives the policyowner additional time to pay overdue premiums
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 Group must designate one of its members to be the named insured Group must have been formed for obtaining insurance Group must include at least five employers
Group must be formed for a purpose other than obtaining insurance
Basic Medical Expense insurance? Normally has a deductible and coinsurance Covers an illness but not an accident Pays for lost wages while hospitalized Has lower benefit limits than Major Medical Insurance
Has lower benefit limits than Major Medical Insurance
During the course of an insurance business transaction, who does the producer legally represent? Producer Insured Insurance Company Beneficiary
Insurance Company
What would be an accurate definition of "controlled business"? Insurance business that is written on the producer's own life, property, or interests Insurance business obtained by an agent through coercion, intimidation, or boycotting Insurance business that is obtained through false advertising Insurance business that is obtained by replacing an existing policy through misrepresentation
Insurance business that is written on the producer's own life, property, or interests
The agreement in a life insurance contract that states a specific sum of money will be paid to a designated person upon an insured's death is called? Entire Contract Provision Consideration Clause Insuring Agreement Assignment Agreement
Insuring Agreement
The Accidental Death and Dismemberment provision in a life insurance policy would pay additional benefits if the insured? Dies of natural causes Becomes critically ill Becomes chronically ill Is blinded in an accident
Is blinded in an accident
A producer's license may be denied, suspended, or revoked if the license? Engages in replacement of an existing policy Is found guilty of misrepresentation in obtaining the license Files for bankruptcy Does not meet a sales quota
Is found guilty of misrepresentation in obtaining the license
A producers license may be denied, suspended, or revoked if the licensee? Engages in replacement of an existing policy Is found guilty of misrepresentation in obtaining the license Files for bankruptcy Does not meet a sales quota
Is found guilty of misrepresentation in obtaining the license
K is looking to purchase Renewable Term insurance. Which of these types of Term insurance may be renewable? Increasing Decreasing Adjustable Level
Level
Which of these would e considered a Limited-Pay Life policy? 10-year Renewable and Convertible Term Life Paid-Up at age 70 Straight Whole Life Renewable Term to Age 100
Life Paid-Up at age 70
A whole life insurance policyowner does not wish to continue making premium payments. Which of the following enables the policyowner to sell the policy for more than its cash value? Cash Surrender Life Settlement Contract Buy-Sell Arrangement 1031 Exchange
Life Settlement Contract
Life insurance coverage will frequently contain an Accelerated Benefits rider attached to the policy. What would be considered a "Qualifying event" under these riders? Seasonal Unemployment Short-Term Disability Medical Condition resulting in a significantly-shortened lifespan Divorce
Medical Condition resulting in a significantly-shortened lifespan
An applicant must receive an Outline of Coverage when an applicant is taken for a? Endowment Annuity Medicare Supplement Policy Universal Life Policy
Medicare Supplement Policy
An applicant must receive an Outline of Coverage when an application is taken for a? Endowment Annuity Medicare Supplement Policy Universal Life Policy
Medicare Supplement Policy
Which Unfair Competition Practice involves a producer suggesting that an insurance policy is like a share of stock? Twisting Intimidation Misrepresentation Sliding
Misrepresentation
An example of an Unfair Claims Settlement Practice would be? Requesting a third-party arbitrator to resolve a disagreement Paying a claim promptly after receiving proof of loss Misrepresenting insurance policy provisions affecting a loss Requiring the insured to give a statement under oath
Misrepresenting insurance policy provisions affecting a loss
A policyowner is allowed to pay premiums more than once a year under which provision? Insuring Consideration Payor Mode of Premium
Mode of Premium
All of these statements are true regarding a child qualifying for coverage under the Indiana children Health Insurance Program, except? Must be a resident of Indiana to qualify Must be 19 years of age to qualify Family's income level must be greater than 150% of Federal poverty level, but less than 200% Must have been born in the united States to qualify
Must have been born in the united States to qualify
Which of the following is not an unfair claim settlement practice? Failing to acknowledge and act promptly with respect to an insurance claim Compelling an insured to initiate a lawsuit be offering less on an insurance claim Failing to accept or deny a claim within reasonable time after proof of loss is submitted Needing written documentation of claim details
Needing written documentation of claim details
If an insurance company issues a Disability Income policy that it cannot cancel for which it cannot increase premiums, the type of renewability that best describes this policy is called? Noncancellable conditionally Renewable Cancellable Guaranteed Renewable
Noncancellable
P is a producer who is licensed in Indiana, but a resident of Michigan. In Indiana , P is considered to be a____Producer? Nonresident Foreign Alien Reciprocal
Nonresident
An example of rebating would be A mutual insurance company paying dividends to its policyowners Reducing the premiums across the board for a specific risk class Offering a client something of value not stated in the contract in exchange for their business Using intimidation in order to restrain or monopolize the business of insurance.
Offering a client something of value not stated in the contract in exchange for their business
An example of unfair discrimination would be? Declining an insurance application because of involvement in a hazardous occupation Offering the same terms of coverage to different policyowners in the same risk classification Offering different terms of coverage for different policyowners having the same risk classification Issuing a policy at a substandard rate because of poor health
Offering different terms of coverage for different policyowners having the same risk classification
According to Indianas Mammography Coverage statue, which of these benefits are considered mandatory in every Medical Expense Policy? One baseline mammogram for women between ages 30-34 One mammogram every year for women aged 35 and older One mammogram every year for women aged 40 and older Two mammograms every year for those considered "women at risk"
One mammogram every year for women aged 40 and older
Upon reaching the limiting age, a handicapped child can extend their health insurance coverage as a dependent? Only if the child is incapable of employment and chiefly dependent on the policyowner For up to an additional 10 years only Only physically disabled Only if mentally disabled
Only if the child is incapable of employment and chiefly dependent on the policyowner
In Indiana, which of the following must be delivered to a policyowner upon the sale of an individual life insurance policy? Insurers AM Best rating The written sales proposal Policy Summary and Buyer's Guide Buyer's Guide only
Policy Summary and Buyer's Guide
Who elects the governing body of a mutual insurance company? Chairman of the board Bondholders Stockholders Policyholders
Policyholders
What is considered to be a characteristic of a Conditionally Renewable Health Insurance policy? Premiums may increase at time of renewal Premiums may increase at any time Policy may be renewed at the discretion of the insured Policy may be amended by insured at any time
Premiums may increase at time of renewal
An individual who in any manner sells, solicits, or negotiates insurance on behalf of insurance companies for compensation is an insurance? Solicitor Adjuster Producer Representative
Producer
The _____ must provide an insured with proper disclosure concerning the replacement of a life insurance policy? Compliance Officer Underwriter Commissioner Producer
Producer
The Insurance Commissioner may suspend, revoke, or refuse to renew a producer's license for which of the following reasons? Producer files for bankruptcy Producer engages in the replacement of an existing policy Producer has used fraudulent, coercive, or dishonest practices Producer does not meet a sales quota
Producer has used fraudulent, coercive, or dishonest practices
Which of the following is not a valid reason for the insurance commissioner to suspend or revoke a producers license? Producer returns part of a commission to client in exchange for a sale Producer represents more than one insurance company Producer engages in false advertising Producer commingles premiums collected with a personal account
Producer represents more than one insurance company
Which of these Nonforfeiture Options continue a build-up of cash value? Waiver of Premium Extended Term Reduced Paid-Up Cash Surrender
Reduced Paid-Up
An example of rebating would be? Returning a portion of a premium as inducement to purchase insurance Reducing the premium across the board for a specific risk class A mutual insurance company paying dividends to its policyowners Using intimidation in order to restrain or monopolize the business of insurance
Returning a portion of a premium as inducement to purchase insurance
Which factors are taken into consideration when an insurance company determines the premium rate for a Whole Life policy on an applicant? Geographical Location Source of Income Risk Classification Marital Status
Risk Classification
The Commissioner is appointed be the? Governor Attorney General State Senate NAIC
State Senate
Life insurance replacement regulation protects the interest of? The Policyowner The Producer The Insurer The NAIC
The Policyowner
Life insurance replacement regulation protects the interests of? The Policyowner The Producer The Insurer The NAIC
The Policyowner
If an annuity is terminated prior to beginning of the income payment period, the contract owner receives? No refund money The contract surrender value at the time All premiums paid up to the date of termination Reimbursement of all expenses deducted from the contract value
The contract surrender value at the time
Which of these statements regarding health coverage for physically handicapped dependents is false? The dependent must have been over 10 years of age when the handicap was insured The dependent must have been covered under the insureds policy at the time the handicap was insured The dependent must rely chiefly on the policyowner for support and maintenance The dependent must agree to periodic medical examinations at the request of the insurance company
The dependent must have been over 10 years of age when the handicap was insured
J chooses a monthly premium payment mode on his Whole Life insurance policy. Which of these statements is correct? The gross premium is higher on a monthly payment mode as compared to being paid annually The gross premiums is lower on a monthly payment mode as compared to being paid annually The cash value from a life policy paid on a monthly basis builds quicker than one paid on an annual basis The face amount of a life policy paid on a monthly basis is higher than one paid on an annual basis
The gross premium is higher on a monthly payment mode as compared to being paid annually
Which of the following statements regarding a Tax Sheltered Annuity is incorrect? The income from the TSA is received income tax-free The amount contributed is deductible from taxable income The interest earnings are tax deferred A tax-sheltered annuity is available to employees of non-profit organizations
The income from the TSA is received income tax-free
When a life insurance application is completed, a Policy Summary must be given to the applicant. The Policy Summary must include? The insurers AM Best rating The Producers address Cash value rate The premiums cost for basic coverage applied for
The premiums cost for basic coverage applied for
Which of the following is a requirement to obtain a nonresident producer license in Indiana? The producer must be at least 21 years of age The producer's state of residence must have reciprocity with Indiana The producer must be bonded in the producer's state of domicile The producer must pass a special examination for nonresident producers
The producer's state of residence must have reciprocity with Indiana
The Common Disaster clause provides that if both the insured and sole named beneficiary were to die in a common accident, which of the following is true? This clause provides the payment of proceeds to the insured's estate This clause provides the payment of proceeds to the beneficiary's estate The estate taxes in the insured's estate may be reduced The estate taxes in the beneficiary's estate may be reduced
This clause provides the payment of proceeds to the insured's estate
The Insurance Commissioner is authorized? To enforce state laws relating to insurance To pass state laws relating to insurance To set insurance rates for foreign insurers To set sales quotas
To enforce state laws relating to insurance
An example of an Unfair Claims Settlement Practice is? Making it mandatory that the proof of loss be provided for each claim Requiring a time for submitting a claim Paying a claim in a timely matter Turning down a claim without providing the basis of denial
Turning down a claim without providing the basis of denial
At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act? Before the appointment is scheduled Upon completion of the application At the policy's delivery When the insurer receives the MIB report
Upon completion of the application
S is a life insurance policyowner who enters into a written agreement to receive immediate cash in exchange for the sale transfer of her life insurance policy. This agreement is referred to as a? 1035 Exchange Viatical Settlement Equity Cash Agreement Cash Conversion
Viatical Settlement
ABC Insurance Company has accepted a life insurance application which contains unanswered questions. The company then makes the application part of the life contract. In this situation, the insurer has? Waived one of its legal rights Issued a voidable policy Committed an act of fraud Assigned the risk to a reinsurer
Waived one of its legal rights
When must insurable interest be present in order for a life insurance policy to be valid? When the insured dies Within the incontestability period When the application is made Before the insured dies
When the application is made