Indiana Life Insurance Exam Prep

How much time does the insurer have to pay the death benefit to the beneficiary of a life insurance policy after the receipt of proof of death?

2 MONTHS

A temporary license may be obtained for all of the following situations EXCEPT

A producer's RETIREMENT

An insurer has made all of the decisions regarding the provisions included in the insured's policy. The insured finds an objectionable provision and wants to negotiate it with the insurer but is not allowed to do so. Her ONLY options are to REJECT the policy or ACCEPT it as is. Which CONTRACT FEATURE does this describe?

ADHESION

Which of the following BEST describes GROSS ANNUAL PREMIUM?

ANNUAL cost of MORTALITY, PLUS EXPENSES

questions directed to determine the appicants's sexual orientation

According to underwriting rules pertaining to AIDS & HIV all of the following questions will be allowed on an application for health insurance EXCEPT

In life insurance policies, CASH VALUE INCREASES

Grow TAX DEFERRED

In insurance, an OFFER is usually made when

The completed application is submitted

When would a 20-pay whole life policy endow?

When the insured reaches age 100

Which of the following is the CHIEF EXECUTIVE and ADMINISTRATIVE OFFICER of the Insurance Department?

the COMMISSIONER

An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is a currently 20,000. What would be the face amount of the new term policy?

50'000

The COMMISSIONER must be notified in ALL of the following circumstances EXCEPT

A change of the PRODUCERS BUSINESS PHONE NUMBER

Twisting

A form of misrepresentation in which an agent persuades an insured/owner to cancel, lapse, or switch policies, even when it's to the insured's disadvantage.

If a death benefit is not paid out in a timely manner, the interest begins to accrue

At the SAME RATE as the Policy LOAN

An insurer neglects to pay a LEGITIMATE CLAIM that is covered under the terms of the policy. Which of the following insurance PRINCIPLES has the insurer violated?

Consideration

In a DIRECT ROLLOVER, how is the money transferred from one plan to the new one?

From trustee to trustee

During PARTIAL WITHDRAWAL from a UNIVERSAL LIFE policy, which portion will be taxed?

INTEREST

The policyowner wants to make sure that upon his death, the life policy will pay a portion of the PROCEEDS annually to his spouse, but that the PRINCIPAL will be paid to their children when they reach a certain age. Which SETTLEMENT option should the policyowner choose?

INTEREST ONLY option

Charge a higher premium

If an applicant for a life insurance policy is found to be a substandard risk, the insurance company is most likely to

What type of annuity can be purchased with a single premium and provides benefit payments immediately?

Immediate

Which of the following is TRUE about the mandatory free look in a Life Insurance policy

It commences when the policy is delivered

Which of the following best describes ANNUALLY RENEWABLE TERM INSURANCE?

It is LEVEL TERM insurance

What type of whole life insurance policy has premiums that are adjusted so that during the first years of the policy, the premiums are lower than those of a straight whole life policy, and in subsequent years the premiums are higher than those of a straight whole life policy?

MODIFIED LIFE

Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?

OPTION B

Which option is being utilized when the insurer accumulates dividends at interest and then uses the accumulated dividends, plus interest, and the policy cash value to pay the policy up early?

PAID-UP OPTION

Promptly forwarding premiums to the insurance company

Pertaining to insurance what is the definition of a fiduciary responsibility?

An insured pays $1,200 annually for her life insurance premium. The insured applies this year's $300 worth of accumulated dividends to the next year's' premium, thus reducing it to $900. What option does this describe?

REDUCTION OF PREMIUM

Equity indexed annuities

Seek higher returns

An insurance producer has not been appointed to an insurance company. WHO is the PRODUCER considered to represent?

The CLIENT

Which of the following is true about the commissioner of Insurance

The Commissioner is authorized to participate in the NAIC

Which of the following determines the cash value of a VARIABLE LIFE policy?

The PERFORMANCE of the POLICY PORTFOLIO

Under the REPLACEMENT REGULATION, Rule 16.1 which of the following statements would best describe the PRODUCER'S DUTIES?

The PRODUCER must conduct a REASONABLE INVESTIGATION to determine if a replacement will take place

A father owns a life insurance policy on his 15 year old daughter. The policy contains the optional PAYER BENEFIT RIDER. If the father becomes disabled, what will happen to the LIFE INSURANCE PREMIUMS?

The insured's premiums will be waived until she is 21

40

What is the number of credits required for fully status for social security disability benefits?

When would a 20-PAY WHOLE LIFE policy endow?

When the insured reaches age 100

Death due to plane crash for a fare-paying passenger

Which of the following is NOT typically excluded from life policies?

to create an estate

Which of the following is the best reason to purchase life INSURANCE rather than ANNUITIES?

Payor Benefit Rider

Which of the following riders would NOT cause the Death Benefit to increase?

Which of the following is NOT correct regarding EXAMINATION OF COMPANIES?

the COMMISSIONER must examine ALL ALIEN COMPANIES

All of the following would be eligible to establish a KEOGH RETIREMENT plan EXCEPT

the PRESIDENT and EMPLOYEE of a FAMILY CORPORATION

Under an EXTENDED TERM NONFORFEITURE option, the policy cash value is converted to

the SAME FACE AMOUNT as in the whole life policy

An insured purchased a 15-year level term life insurance policy with a face amount of 100,000. The policy contained an ACCIDENTAL DEATH RIDER, offering a DOUBLE indemnity benefit. The insured gets in an accident, is hopspitalized for 10 weeks and then dies. What amount would his Beneficiary receive as a settlement?

200,000

What is the WAITING PERIOD on a WAIVER OF PREMIUM RIDER in life insurance policies?

6 MONTHS

A candidate applying for WHICH of the following licenses will NOT be required to pass a WRITTEN EXAM?

A NONRESIDENT PRODUCER

In reference to FIXED ANNUITIES, what comprises most of a life insurance company's general account?

CONSERVATIVE INVESTMENTS like bonds

All of the following apply to DEFINED BENEFIT plans EXCEPT

CONTRIBUTIONS are tied to the COMPANY PROFITS

An individual has just borrowed $10,000 from his bank on a 5-year installment LOAN requiring MONTHLY PAYMENTS. What type of life insurance policy would be BEST suited to THIS situation?

DECREASING TERM because the policy's face amount DECREASES as the amount of DEBT is reduced

Which statement is NOT true regarding a STRAIGHT LIFE policy?

Its premiums steadily decrease over time, in response to its growing cash value

Your client uses 50,000 in inheritance money to purchase a SINGLE PREMIUM IMMEDIATE ANNUITY. How soon can he begin receiving income payments?

No later than 1 YEAR from the time of purchase

Which of the following would help prevent a UNIVERSAL LIFE POLICY from lapsing?

Target premium

Who is protected by an INTERIM INSURING AGREEMENT?

The APPLICANT and the INSURER

The ANNUITY OWNER dies during the ACCUMULATION PERIOD of his annuity. The cash value of his annuity EXCEEDS the premiums he paid. There is NO NAMED BENEFICIARY. Which of the following is true?

The CASH VALUE will be paid to the ANNUITANT'S ESTATE

When a fixed annuity owner pays a monthly annuity premium to the insurance company, where is the money placed?

The insurance company's general account

the Commissioner

Who is responsible for issuing a certificate of authority

Which of the following policies would have an IRS REQUIRED CORRIDOR or GAP between the cash value AND the death benefit?

Universal Life- Option A

What is the name of the insured who enters into a VIATICAL SETTLEMENT?

VIATOR

Which of th following is NOT required for a producer to tell a prospect?

What REQUIREMENTS the producer NEEDED to meet to OBTAIN THE INSURANCE LICENSE

A RIDER that may be attached to a life insurance policy that will ADJUST the FACE AMOUNT based upon a SPECIFIC INDEX, such as the Consumer Price Index, is called

"COST OF LIVING" Rider

Any licensed person whose activities affect interstate commerce and who knowingly make false material statement related to the business of insurance may be imprisoned for up to

10 YEARS

A deferred annuity is surrendered PRIOR to annuitization. Which of the following best describes the NON-FORFEITURE VALUE of the annuity?

The surrender value should be EQUAL to 100% of the premium paid, MINUS any prior withdrawals and surrender charges

Providing the applicant with a signed copy of the IMPORTANT NOTICE REGARDING REPLACEMENT

Under Rule 24, LIFE INSURANCE SOLICITATION, producers duties include all of the following EXCEPT

An insured becomes disabled at age 22 and can no longer work. She meets the definition of total disability under Social Security. What other requirement must the insured have met to receive Social Security disability benefits?

Have accumulated 6 work credits in the past 3 years

What do individuals use to TRANSFER their risk of loss to a larger group?

Insurance

Limited to 25% of a producer's annual commission income

In Indiana, controlled business is

The contribution is known and the benefit is unknown

In a defined contribution plan

Which of the following ultimately determines the INTERST RATES paid to the owner of a FIXED annuity?

Insurer's GUARANTEED minimum rate of interest

The type of SETTLEMENT option which pays throughout the lifetimes of two or more beneficiaries is called

JOINT and SURVIVOR option pays while EITHER beneficiary is still living

What is the advantage of REINSTATING a policy instead of applying for a new one?

The original age is used for premium determination

All of the following are qualifications of a resident producer EXCEPT

Obtaining a sponsorship of an admitted insurance company

Which of the following is INCORRECT concerning a NONCONTRIBUTORY GROUP PLAN?

The employees receive INDIVIDUAL policies

Which type of life insurance policy allows the policyowner to pay more or less than the planned premium?

Universal Life

Which of the following is an example of a LIMITED-pay life policy?

Life Paid-Up at age 65

The policyowner of a UNIVERSAL LIFE policy may skip paying the premium and the policy will not lapse as long as

The policy contains sufficient cash value to cover the cost of insurance

All of the following are characteristics of GROUP life insurance plans EXCEPT

There is a requirement to prove insurability on the part of the PARTICIPANTS

Which of the following statements is TRUE concerning IRREVOCALBE BENEFICIARIES?

They can be changed ONLY with the WRITTEN CONSENT of that beneficiary

Which of the following is TRUE for both equity indexed annuities AND fixed annuities?

They have a GUARANTEED MINIMUM INTEREST RATE

All of the following are requirements for life insurance ILLUSTRATIONS EXCEPT

They must be part of the contract

Which of the following represents controlled business?

Writing policies for oneself and one's family

If an insured continually uses the AUTOMATIC PREMIUM LOAN option to pay the policy premium,

The policy will TERMINATE when the cash value is REDUCED to NOTHING!

12 months

A producer has completed all of his continuing education hows but his license has just lapsed. Within what time frame must the producer reinstate his license if he wants to avoid taking an exam to regain his licensed status

There is no current income taxation upon the growth in the annuity

Annuity contracts grow tax deffered. That means that

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?

Consideration

Which of the following terms is used to name the NON-TAXED return of UNUSED premiums?

DIVIDEND

An insurance company assures its new policyholders that their premium cost will not increase for a period of at least five years. However, due to increasing financial strain, they plan to raise premium cost for all insureds by 10% over the next two years. What TERM best describes THIS act?

FRAUD

When a REDUCED-PAID UP NONFORFEITURE option is chosen, what happens to the FACE AMOUNT of the policy?

It is REDUCED to the amount of what the CASH VALUE would buy as a SINGLE PREMIUM

Which of the following is NOT true regarding a NON QUALIFIED RETIREMENT plan?

It needs IRS APPROVAL

A married couple owns a permanent policy which covers both of their lives and pays the death benefit ONLY upon the death of the FIRST insured. WHICH policy is that?

JOINT LIFE POLICY