Insurance

material and deliberate misrepresentations submitted on the application

under what circumstances can an insurer contest a life insurance policy according to the Incontestable clause?

typically not subject to federal income taxes

How are dividends from a participating life insurance policy normally treated?

taxes are owed on the amount of cash value that exceeds the premium paid

How much will be taxable if a policyowner, age 55, relinquishes a Universal Life policy?

considered unfair discrimination

Sexual orientation, religious preference, and geographical location are not allowed to be used in the underwriting process. Why is this so?

joint life

The type of life policy best suited to cover a husband and wife for mortgage protection would be

fraternal

type of insurance company that is established as a lodge or charity organization

annuity

product which can offer its owner a lifetime income stream is called an

SIMPLE plan

qualified retirement plan

Fraternal benefit society

sells insurance exclusively for its members

pay estate taxes

survivorship life policy's proceeds are typically used to

70 1/2

Required minimum distributions for qualified retirement plans must start at age

Law of Large Numbers

probability of loss becoming more predictable

$5,000

A $50,000 Whole Life policy is surrendered by the policyowner for the full cash value amount of $15,000. The policyowner had paid a total of $10,000 in premiums while the policy was active. How much of the cash value is taxable?

graded whole life

A Modified Life policy has similar characteristics and serves the same purpose as

only one bill per month for each employer

A group policy's administration charges are lower than that of an individual life policy for what reasons?

survivorship life

A husband and wife own a life insurance policy with their son named as beneficiary. The wife dies first, followed by the husband 5 years later. Their son receives the policy's face amount after his father dies. What type of policy was owned?

lose certain tax advantages

A life insurance policy that fails the 7-Pay Test is considered to be a Modified Endowment Contract. This type of policy will

equity indexed life

A life insurance policy that offers cash value and is influenced by the S&P with a guaranteed minimum rate of return is called

Variable universal life

A life insurance policy which is characterized by flexible premium payments is called

face amount will be paid minus the past due premium

A life insurance policyowner falls behind on his premium payments and dies during the grace period. How will the insurer handle this claim?

$50,000

A man dies and is insured by a Whole Life insurance policy of $50,000 which has a cash value of $15,000. The primary beneficiary will receive how much?

take an exam in Indiana

A person holding an Indiana Non-Resident Producers license would NOT be required to 1. be a licensed Producer in another state 2.take an exam in Indiana 3. comply with Indiana Insurance Regulations 4. renew their license

absolute assignment

A policyowner who permanently changes the ownership of a life insurance policy is exercising which contractual option?

policyowner's estate

A woman is insured under a Variable Life insurance policy with her husband named as primary beneficiary. If there is no designated contingent beneficiary, who will receive the policy's proceeds if they both die in a common accident?

taxes are owed on the amount of cash value that exceeds the premiums paid

After fifteen years, a Whole Life policy is surrendered. Which of the following can the policyowner expect?

rebating

An Indiana Producer offers something of value to a potential Policyowner outside of the promises contained in the policy to convince them to buy a policy. The Producer is guilty of

at time of the application

At what point is insurable interest required for life insurance?

a $50,000 fine

Consistently violating the Indiana Unfair Claims Settlement Practice statute is considered an Unfair Competition Law violation and could result in

Mutual

Dividends are paid out of these companies

consumers the right to protect their own credit information

Fair Credit Reporting Act is intended to give

10

If the Indiana Insurance Commissioner receives a complaint about an alleged Unfair Claim Settlement practice, the Commissioner will notify the Insurance Company involved within ______ days

Long Term Care Insurance

In Indiana, which is NOT a type of Limited Lines Insurance licenses? 1.Credit Life and Health Insurance 2. Long Term Care Insurance 3. Title Insurance 4. Flight Insurance

paying a finder's fee to someone who generates sales leads for you

In Indiana, which is NOT a violation of the Unfair Competition Law? 1. making false statements about the financial condition of a competitor 2. restraining trade assigning your 3. commission to the licensed business entity for which you work 4. paying a finder's fee to someone who generates sales leads for you

limited lines

In Indiana, which type of license is appropriate for a person that wants to sell only pre-need Life Insurance for a funeral home?

Pure

Insurable risk

have a Certificate of Authority

Insurance Companies admitted to do business in Indiana must

accumulation

John owns a deferred annuity and is currently paying no income taxes on the investment gains. This annuity is now in the ______ phase.

counteroffer

Kathy applies for a preffered rate on an insurance application. The insurance company responds by classifying her as a standard risk. The insurer's response is called:

they make a full disclosure about how they will be compensated at the outset of the transaction

Licensed Resident Producers can sell insurance advice in Indiana if

adjustable lif

Life insurance that allows the death benefit to be modified is known as

Modified Endowment Contract

Life insurance that does NOT pass the 7-day test is called

marital status of the applicant

Life insurance underwriting would consider which of these factors as unimportant? 1. Age of the applicant 2.Weight of the applicant 3. Marital status of the applicant 4. Gender of the applicant

National Association of Insurance Commissioners

NAIC stands for

total

One of the requirements for becoming eligible for Social Security Disability Income (SSDI) is ____ disability.

promulgate rules and regulations

The Indiana Commissioner of Insurance has the power to

applicants medical history

The Medical Information Bureau (MIB) provides what kind of information to an insurance company?

reduction of premium option

The dividend option which reduces the annual premium payment of a life insurance policy is called the

pre-tax contributions

Traditional 401(k) plans are funded by

three months

Under Indiana Insurance Licensing Law, Producers would be considered delinquent on child support payments if they are _____ in arrears on payments.

producer's commission income in a twelve month period

Under Indiana law, Controlled Business is limited to 25% of the

flexible premiums and flexible face amount

Universal Life Insurance offers what features?

a minimum guaranteed rate of return

What advantage does an equity-indexed life insurance policy have over a variable life policy?

premium payment amount

What can be altered by the policyowner in an adjustable life insurance policy?

incarceration

What is NOT a possible punishment administered by the Indiana Commissioner for violating the Indiana Producer Licensing Law? 1. suspension or revocation of the license 2. a $10,000 fine 3. incarceration 4. a letter of reprimand from the Commissioner

At the outset of the transaction, they must make full disclosure in writing about how they will be compensated

What is required for Licensed Resident Producers to sell insurance advice?

a licensed Producer must be designated as responsible for compliance

What is required for a corporation to be licensed as an Indiana Resident Producer?

pay a fee for each license requested

What is required for a new Applicant to be licensed as an Indiana Resident Producer?

Variable life

What kind of life insurance offers the policyowner a cash value that is invested in a separate account?

Designate an individual who is licensed as a Producer to be responsible for insurance law compliance

What must a business entity do in order to be licensed as a Producer in Indiana?

Variable

What type of life insurance are characterized by separate accounts?

family protection

What type of life insurance policy covers a husband and wife as well as any future children for no additional premium?

Variable life

What type of permanent life insurance offers a guaranteed minimum face amount and allows for future increases in coverage?

insurer assumes the investment risk

Which assumption concerning a Fixed Dollar Life annuity is correct? 1.Annuitant assumes no inflation risk 2.Insurer assumes the inflation risk 3.Annuitant assumes the investment risk 4.Insurer assumes the investment risk

Take an unreasonable amount of time to settle claims after the Proof of Loss is submitted

Which is a violation of the Unfair Claims Settlement Act? 1. Require that an insured make a sworn statement about the facts of a claim 2. Deny a claim after a reasonable investigation 3. Issue policies that offer the resolution of claims disputes through arbitration 4. Take an unreasonable amount of time to settle claims after the Proof of Loss is submitted

force an insured to sue the Insurance Company in order to receive a claim settlement

Which is illegal for an Insurance Company to do under the Indiana Unfair Claims Settlement laws? 1.force an insured to sue the Insurance Company in order to receive a claim settlement 2.refuse to pay a claim after conducting a reasonable investigation 3. act promptly on claims 4.f pay a portion of a claim

Continuing Education (C/E) hour requirements are less than the C/E hour requirements for a Resident Producer's license

Which of the following is true concerning Indiana Limited Lines licenses? 1. Pre-licensing education is never required 2. An exam is never required 3. Continuing Education (C/E) hour requirements are less than the C/E hour requirements for a Resident Producer's license 4. A Limited Lines license entitles the licensee to sell all forms of Limited Lines of Insurance

a beneficiary will receive a lump-sum benefit if the annuitant dies

Which of these is NOT a characteristic of a Straight Life annuity? 1.Payments continue until the annuitant dies 2.No death benefit 3.Age and gender are factors of the income amount 4.A beneficiary will receive a lump-sum benefit if the annuitant dies

consent of the agent

Which of these is NOT required when an insurance company requests a consumer report on an applicant? -Disclosure to the applicant that report will be requested -Consent of the agent -Consent of the applicant -Remain in compliance with Fair Credit Reporting Act

to appoint producers

Which power is NOT held by the Indiana Insurance Commissioner? 1. to hold hearings 2. to fine Producers 3. to examine Insurance Companies 4. to appoint Producers

The Insurance Commissioner is prohibited from conducting fiscal examinations of Foreign and Alien Insurance Companies

Which statement is NOT true about the Insurance Commissioner? 1. The Insurance Commissioner may examine any Insurance Company doing business in Indiana at any time 2. The Insurance Company must examine all Admitted Insurance Companies at least every 5 years 3. The Insurance Commissioner is prohibited from conducting fiscal examinations of Foreign and Alien Insurance Companies 4. Under specific circumstances, the Insurance Commissioner may waive the Indiana fiscal examinations of a Foreign or Alien Insurance Company

they can be from a United States territory

Which statement is true about Foreign Insurance Companies? 1. They are from another country 2. They cannot be admitted to do business in Indiana 3. They can be from a United States territory 4. They do not need a Certificate of Authority to do business in Indiana

they sell insurance advice for free

Which statement is true about licensed Indiana Insurance Consultants? 1. they must also hold a Producer's license if they intend to sell insurance policies 2. They may only split commissions with licensed Producers 3. They must first be appointed by an Insurance Company before they can solicit applications for policies 4. They sell insurance advice for a fee

The Insurance Commissioner is appointed by and serves at the pleasure of the governor

Which statement is true about the Indiana Insurance Commissioner? 1.The Insurance Commissioner is elected to a four year term 2.The Insurance Commissioner is appointed by the NAIC 3.The Insurance Commissioner is appointed by and serves at the pleasure of the Governor 4.The Insurance Commissioner is appointed by the Governor for a four year term

joint life

Which type of life insurance is characterized as having two insureds and matures when the first insured dies?

owner of the annuity

Who assumes the investment risk in a Variable Life annuity?

Other producers who are licensed in the same line of insurance that generated the commission

With whom may Insurance Producers split commissions?

policyowner

a beneficiary can only be designated by the

accumulate funds for the future

a deferred annuity is used to

Payor benefit

a rider that is normally associated with a Juvenile Life policy is called:

converting a cash value into periodic income

annuitization can be described as

offer

application submitted to an insurer that includes the initial premium

surviving children

considered a class beneficiary designation

insurer

function of a Discretionary Provision is to protect the

something of value

how is consideration characterized by law?

material and intentional

in order for a misrepresentation or concealment on an application to void a Life insurance policy, it has to be

attending physicians report (APS)

information needed for the underwriting process can be obtained from here

conditional

insurance company is required to provide coverage as long as the policyowner is current on the premium payments

stock company

insurance company that shares profits or losses with its investors

aleatory

legal term that applies to a contract where one party may receive more benefits than the other

Assignment Clause

life insurance provision which allows the policyowner to change the policy's beneficiary designation is called:

concealment

making a statement on an insurance application that only reveals part of the truth

decreasing term

mortgage protection is usually covered by what type of insurance?

loss is predictable

necessary for a risk to be considered insurable

unilateral

only party in an insurance contract that makes a legally enforceable promise is the insurance company. Because of this, insurance contracts are considered to be

5 months

waiting period for Social Security disability is

becomes completely disabled

waiver of premium benefit for a life insurance policy is utilized when the insured

scuba diving

what activity is considered hazardous to a life insurance underwriter?

Automatic Premium Loan

when a Permanent Life insurance policy's premiums are stopped, which provision is designed to keep the policy from lapping?

grace period clause

when a premium for a life insurance policy is missed, what provision will dictate the actions taken by the insurer?

representations

when an application for insurance is taken, the statements made by the applicant are true and accurate to the best of the applicants knowledge