Indiana Life Insurance Exam
A full lines Producer renewing a two year license must have a. 24 Hours of Continuing education b. 10 Hours of Continuing education. c. 15 Hours of Continuing education. d. 30 Hours of Continuing education
24 Hours of Continuing Education
Which of the following retirement plans could provide tax-free retirement income benefits? a. Roth IRA b. Joint and Survivorship Variable Life Annuity c. 401K d. 403B
C. 401K
All of the following policies provide for the tax deferred accumulation of cash value EXCEPT: A. Interest Sensitive Whole Life B. Single Premium Variable Annuity C. Variable Universal Life D. Term Life
D. Term Life
If the Commissioner issues a cease-and-desist order and you continue the same activities, you can be fined up to which of the following amounts per violation of that order? a. $5,000 b. $1,000 c. $50,000 d. $25,000
$25,000
Which of the following statements is NOT true about Enhanced Ordinary Life? a. It is the same as a Modified Life policy. b. It is a combination of continuous premium Whole Life and Renewable Term. c. Policy dividends are used to purchase Paid Up Additions. d. It is only available on Participating Life insurance policies.
. It is the same as a Modified Life Policy
What are the five elements of a contract?
1. Offer: A concise statement that is answered by Yes or No. In life insurance, an application is only an offer if it comes with the first premium. 2. Acceptance: Mirror image of the offer. The company must issue and deliver the policy by the agent. 3. Consideration: The exchange of something of value. Company offers promises and applicant gives premium. 4. Capacity: Ability to enter into the contract 5. Purpose: Reason for existence. In life, the applicant must have insurable interest and consent in the life of the proposed insured.
In order to qualify for Accelerated Death Benefits, the insured must be in what kind of circumstance?
1. Terminally ill 2. Extraordinary Medical Intervention (organ transplant, artificial life support, etc.) 3. Permanently Institutionalized 4. Limits the Insured's life span (Heart disease, cancer, renal failure) 5. Any other condition approved by the Commissioner
Explain the conversion summary for the State of Indiana for Group insurance policies
31 Days: Normal Conversion Period 15 Days: Extension 60 Days: Maximum Conversion Period
All of the following may obtain a limited insurance Producer's license EXCEPT a. A person selling limited health policies (such as cancer insurance) to church members. b. A person selling travel accident insurance in a transportation terminal. c. A person selling title insurance to the purchaser of real estate. d. A person selling baggage insurance in a transportation terminal
A person selling limited health policies (such as cancer insurance) to church members
The Commissioner must be notified in all of the following circumstances EXCEPT: a. A Producer changes their telephone number. b. A Producer is discharged for cause by an insurance company. c. A Producer changes their business address d. A Producer changes their residential address.
A producer changes their telephone number
In the year 2000, Hamlet purchased a $200,000 face amount Adjustable Life policy containing a conventional Suicide clause. If Hamlet commits suicide in the year 2008, his company will pay which of the following? a. $200,000 less any outstanding loans b. The premium paid less any outstanding loans c. $200,000 plus the cash value at Hamlet's death minus any outstanding loans d. The cash value less any outstanding loans
A. $200,000 less any outstanding loans
Joel owns a $100,000 face amount Whole Life policy which has a cash value of $11,000. There is also an outstanding loan of $4,000. If Joel dies, how much would the insurance company pay to his beneficiary? a. $96,000 b. $100,000 c. $111,000 d. $107,000
A. $96,000
Which of the following is NOT an example of insurable interest? a. A niece seeking insurance on an uncle who has named her in his will. b. One partner in a business insuring the life of another partner as part of a business continuation agreement. c. A bank insuring the life of a borrower in the amount of their outstanding loan. d. The owner of a business insuring the lives of key employees.
A. A niece seeking insurance on an uncle who has named her in his will.
Which of the following statements is NOT true about Fixed Annuities? a. A securities license is necessary to sell Fixed Annuities. b. There will be a guaranteed minimum rate of return payable on the investment. c. Monies cannot be withdrawn prior to age 59 1/2 without penalty. d. The monies invested will be in the company's General Account.
A. A securities license is necessary to sell Fixed Annuities
Which of the following statements is true about the Group Life conversion privilege? a. Death during the conversion period is covered even if the departing employee chooses NOT to convert to an individual policy. b. The departing employee must pay the premium if they elect to be covered during the conversion period. c. If a departing employee elects to convert their life insurance, the company must offer Term insurance as a choice. d. Under the COBRA laws a departing employee may elect to remain a member of the Group Life plan for a limited period of time.
A. Death during the conversion period is covered even if the departing employee chooses NOT to convert to an individual policy.
Which of the following is a combination of Decreasing Term and Whole Life? a. Family Income Policy b. Family Maintenance Policy c. Modified Life d. Family Policy
A. Family Income Policy
Which of the following life insurance policy provisions does not contain any controlling numbers? a. Misstatement of Age b. Free Look provision c. Incontestable clause d. Suicide clause
A. Misstatement of Age
Which of the following is NOT an example of third party ownership? a. Modified Life b. Key Employee Life c. Split Dollar Life d. Group Life
A. Modified Life
Mary is receiving an annuity payout from her Variable Straight Life Annuity. Upon her death, which of the following will be payable to her estate? a. Nothing b. The policy death benefit c. The remaining value of her account d. The total premiums paid into the account, less the amount paid to Mary in benefits
A. Nothing
Which of the following is NOT taxable? a. Policy dividends received from a mutual insurance company. b. The interest earned on reinvested dividends of a Whole Life policy. c. The interest earned under an Interest Only settlement option. d. The interest earned on a Fixed Annuity during the pay out period.
A. Policy dividends received from a mutual insurance company
All of the following are true statements about the taxation of life insurance benefits except: A. Policy loans are taxed as ordinary income B. The cash value in a life insurance policy grows on a tax deferred basis. C. The interest earned on the "interest" Settlement Option is taxed as ordinary income. D. The death benefit of a life policy is received by the beneficiary federal income tax free.
A. Policy loans are taxed as ordinary income
A type of Term Life Insurance that allows the policyowner to re-qualify for a lower premium rate by passing a physical exam from time to time is known as: a. Re-entry Term b. Renewable Term c. Convertible Term d. Decreasing Premium Term
A. Re-entry Term
A Renewable Term life insurance policy is: a. Renewable from time to time up to a certain age with renewal premium based on the insured's attained age. b. Automatically converted into Whole Life after a designated period of time. c. Renewable as long as the insured can provide evidence of insurability. d. Renewable at any age through age 100.
A. Renewable from time to time up to a certain age with renewal premium based on the insured's attained age.
Which of the following regulates Group Life insurance conversion privileges? a. State Law b. HIPAA c. COBRA d. HCFA
A. State Law
In a Whole Life policy, which of the following events will trigger a return of all the cash value minus any outstanding loans to the policyowner? a. Surrender b. Suicide c. Nonpayment of premium d. Death
A. Surrender
Which of the following statements is true concerning a Limited Pay Whole Life policy? a. The insured will benefit from a lifetime of coverage. b. The cash values will grow more slowly than they would in a continuous premium Whole Life policy. c. Policy dividends paid will reduce the premiums over time. d. The policy will not develop any cash values.
A. The insured will benefit from a lifetime of coverage.
The Reinstatement provision in a Whole Life policy states all the following EXCEPT that the: a. policy on Extended Term may not be reinstated. b. insured must pay all past due premiums plus interest. c. reinstatement must occur within a designated period of time (such as three years). d. insured must provide proof of insurability.
A. The policy on Extended Term may not be reinstated.
Which of the following life insurance policies offers the build up of cash value on an interest-sensitive basis and the right to make partial withdrawals of that cash value without interest? a. Universal Life b. Adjustable Life c. Variable Universal Life d. Variable Whole Life
A. Universal Life
Joe Insured's $1,000 annual premium was due to his insurance company on January 25th. Joe did not pay the premium, but Joe did die on February 2nd. If the death benefit on Joe's policy was $100,000, and assuming there was no outstanding loan, then the beneficiary can expect to receive which of the following? a. $99,000 minus any interest charged by the company. b. The $100,000 death benefit minus one month's past due premium. c. $100,000. d. No death benefits will be paid because Joe failed to pay his premium on time.
A.$99,000 minus any interest charged by the company
Under Indiana Law a. Accelerated Death Benefi ts must be taken as a lump sum. b. Accelerated Death Benefits which have been paid act as a lien against the death benefit c. Companies must waive further premium after the payment of Accelerated Death Benefits. d. There are no restrictions on the discount rates for Accelerated Death Benefits.
Accelerated Death Benefits which have been paid act as a lien against the death benefit
Which of the following statements is NOT true about Endowment policies? a. Endowment policies have a cost per thousand rate which is higher than Whole Life rates. b. Endowment policies provide protection for the whole of life. c. Death during the endowment period will cause the policy to mature. d. Endowment policies will pay its face amount to the policyowner if he/she lives to the end of the endowment period.
B. Endowment policies provide protection for the whole of life.
Which of the following policy options is NOT available to the policyowner who owns a rated Whole Life insurance policy? a. Reduced Paid Up b. Extended Term c. Paid Up Additions d. Interest
B. Extended Term
Which of the following is a characteristic of Term insurance? a. Nonforfeiture options b. Renewability c. Increasing cash values d. Automatic coverage through age 100
B. Renewability
Warranties are: a. The same as representations. b. Statements that are absolutely true. c. Statements that are believed to be true. d. Critical to the formation of a life insurance contractual agreement.
B. Statements that are absolutely true.
Which of the following is true of a Whole Life policy purchased with a single premium? a. The incontestable period will be shorter than it otherwise would have been. b. The cash values will be larger than they otherwise would have been in the earlier policy years. c. The suicide clause will be waived. d. The death benefit will be larger than if the policy was purchased with a limited pay system.
B. The cash values will be larger than they otherwise would have been in the earlier policy years.
Endowment policies can mature in two ways. What are they? a. The insured dies during the policy period or annuitizes the policy after age 59&1/2. b. The insured dies during the policy period or reaches the endowment age as designated in the policy. c. The insured dies during the policy period or retires at age 59&1/2. d. The insured dies or reaches age 100.
B. The insured dies during the policy period or reaches the endowment age as designated in the policy.
An Immediate Life Annuity provides for: a. A level death benefit. b. The systematic liquidation of the principal and interest over the lifetime of the annuitant. c. The accumulation of retirement funds. d. Cost of living increases in benefit payments.
B. The systematic liquidation of the principal and interest over the lifetime of the annuitant
Producer Bart makes a sales presentation to Betty for a Universal Life policy. While completing the application, Bart learns that Betty is insured under a life policy. Bart must give Betty the Important Notice Regarding the Replacement of Life Insurance and a copy of the Sales Proposal used in the presentation under all of the following situations EXCEPT a. Betty will convert her existing Convertible Term policy to Whole Life. b. Betty says that coming up with the initial premium for the UL will not be a problem as she will borrow all the cash value out of her existing policy to pay it. c. Betty tells Bart that she will exchange her original policy for a reduced paid-up policy. d. Betty decides to follow Bart's recommendation that she continue her Whole Life as extended term insurance.
Betty will convert her existing Convertible Term policy to Whole Life.
Jack is licensed as a Life Producer and Jill is licensed as a Property and Casualty Producer. Jack sends one of his Life insurance clients to Jill to buy automobile insurance. Jill makes the sale and sends a portion of her commission to Jack who accepts it as a finder's fee. Which is true concerning these events? a. Both Jack and Jill are guilty of rebating. b. Only Jill is guilty of rebating. c. Only Jack is guilty of rebating. d. Neither is guilty of rebating.
Both Jack and Jill are guilty of rebating. It is a crime to offer a rebate, give a rebate, or accept a rebate.
All the following are reasons why an insurance company may not pay a death benefit under a Term life insurance policy EXCEPT: a. A suicide before the end of the first two policy years. b. Non payment of premium. c. An accidental death resulting from drowning. d. A material misrepresentation on the application discovered before the end of the contestable period.
C. An accidental death resulting from drowning.
All the following riders attached to a Whole Life policy could increase the amount of the death benefit EXCEPT: a. Guaranteed insurability. b. Cost of living. c. Automatic premium loan. d. Accidental death.
C. Automatic Premium Loan
You own a Flexible Premium Deferred Annuity. You have been making contributions to this annuity over the last 20 years. Now at age 55 you are considering surrendering your annuity for cash. All the following are true statements about this surrender EXCEPT: a. All of the profits earned in the annuity will be taxed in the year that the contract is surrendered. b. You will be charged a 10% tax penalty for early withdrawal. c. Both the interest and the principal will be taxed as ordinary income. d. The annuity may contain surrender charges that will cost extra money.
C. Both the interest and the principal will be taxed as ordinary income.
If the insured dies, the proceeds of a Credit Life policy will be paid to the: a. Insured's estate b. Debtor c. Creditor d. Insured's named beneficiary
C. Creditor
Agent Steve takes a prepaid application from applicant Cindy and issues a 30 day Interim Term insurance receipt to Cindy. The effective date of the interim coverage will be on the: a. policy delivery date. b. date of application or date of the medical exam, which ever occurs last, if the proposed insured is insurable on that key date. c. date of application. d. policy issue date.
C. Date of Application
Luis and his spouse, Mary, are both age 30. Luis owns a life insurance policy that will pay Mary an income through age 50, followed by a death benefit if Luis were to die before age 50. Luis owns which of the following types of life insurance policies? a. Survivorship Life b. Modified Life c. Family Income d. Family
C. Family Income
The primary reason for selecting a Variable Whole Life policy rather than a traditional Whole Life policy is that the Variable Whole Life policy: a. Allows the policyowner more flexibility in naming and changing beneficiaries. b. Allows the policyowner to borrow a larger percentage of the cash value. c. Has the potential to earn a higher rate of return on the cash value. d. Provides for flexible premium payments.
C. Has the potential to earn a higher rate of return on the cash value.
At age 30, Joe Insured purchases a 20 Pay Whole Life Policy. Which of the following statements is true regarding Joe's policy coverage? a. Joe's death protection will end at age 50. b. Joe's nonforfeiture values will end at age 50. c. Joe will be able to stop paying the premiums at age 50, but his death protection will run through age 100. d. At age 50, Joe's cash value will equal the face value of his contract.
C. Joe will be able to stop paying the premiums at age 50, but his death protection will run through age 100.
Because Joe is terminally ill, he decides to exercise his accelerated death benefit on his Whole Life insurance policy. Which of the following is true concerning this benefit option? a. Joe's company will loan Joe his cash value interest free, and then subtract the loan from the death benefit. b. Joe's company will pay the entire death benefit to Joe's beneficiary prior to Joe's actual death. c. Joe's company will pay a percentage of the face amount to Joe prior to death, and then pay the balance to the beneficiary at Joe's death. d. Joe's company will pay the face amount of the policy to Joe prior to death, and then pay an additional face amount to the beneficiary at death.
C. Joe's company will pay a percentage of the face amount to Joe prior to death, and then pay the balance to the beneficiary at Joe's death.
Which of the following factors is NOT part of the gross premium calculation for a life insurance policy? a. Interest b. Expenses c. Premium mode d. Mortality (risk)
C. Premium Mode
A contract sold by an insurance company that promises to pay an income to the policyowner until his/her death is called a: a. Survivorship Life b. Family Income Policy c. Straight Life Annuity d. Modified Endowment
C. Straight Life Annuity
Joe Insured is the policyowner and the insured under a $100,000 Whole Life Policy. Jolene is designated as his primary beneficiary. Joe's three children are designated as the contingent beneficiaries on a per capita basis. Joe and Jolene plus one of the three children are killed in an automobile accident. It is not possible to determine who died first. How will the $100,000 death benefit be paid? a. $100,000 to Joe's estate. b. $33,333 to each of the three children's estates. c. The money will be divided equally between the two surviving children. d. $100,000 to Jolene's estate.
C. The money will be divided equally between the two surviving children.
Which of the following is true about the taxation of an Annuity contract? a. The growth of an Annuity is not tax-deferred; therefore, there are no taxes to pay at withdrawal. b. The monies invested in an Annuity will grow tax deferred, and the death benefit will be paid to the beneficiary tax-free. c. The monies invested in an Annuity will grow tax deferred, but taxes on the growth must be paid during the Annuity payout period. d. The monies invested in an Annuity will grow tax deferred, and the monies withdrawn during the payout period will be tax-free.
C. The monies invested in an Annuity will grow tax deferred, but taxes on the growth must be paid during the Annuity payout period.
Which of the following is true of a Variable Life Annuity? a. The policy will guarantee a minimum length of benefit payments, such as at least 10 years. b. Upon annuitization the policy will guarantee benefit payments totaling at least the value of the account. c. The policy will pay benefits until the death of the annuitant. d. There will be two or more annuitants receiving the benefits.
C. The policy will pay benefits until the death of the annuitant.
All of the following statements about the Nonforfeiture options in a life insurance policy are true EXCEPT: a. The policyowner may surrender the policy for its cash value. b. Coverage may continue after premium payments are stopped. c. The policyowner is guaranteed the right to convert a Term policy into a Whole Life policy. d. These options are found in life insurance policies that accumulate cash values.
C. The policyowner is guaranteed the right to convert a Term policy into a Whole life policy.
Which of the following does NOT provide a taxable income? a. The interest earned on a death benefit under the Interest Only settlement option. b. The interest earned on the Accumulate At Interest dividend option. c. The receipt of dividends paid by a mutual company to the policyowner. d. The receipt of an annuity payment under a Joint and Survivorship Life Annuity contract.
C. The receipt of dividends paid by a mutual company to the policyowner.
What is the purpose of the MIB? a. To calculate the mortality tables. b. To provide a statistical base of medical information to assist physicians in the treatment of insured patients. c. To provide member insurance companies with medical information on proposed insureds. d. To protect the consumer against the misuses of background data and credit information.
C. To provide member insurance companies with medical information on proposed insureds.
Which of the following riders will not increase a Whole Life insurance premium? a. Guaranteed Insurability b. Waiver of Premium c. Payor Benefit d. Automatic Premium Loan
D. Automatic Premium Loan
Ralph applies for a Universal Life policy on his own life. Debra, the Agent, fails to complete page 4 of the application. Debra submits the application to her company for underwriting. The company issues and delivers a policy to Ralph. Six months later Ralph dies. Assuming there was no material misrepresentation on the application, which of the following actions can the insurance company take? a. Invoke the Incontestable clause, as the application was incomplete when the policy was issued. b. Negotiate with Ralph's estate over reducing the amount of the death benefit as the result of the missing information. c. Pay the claim. d. Contest paying the claim because of the incomplete application.
D. Contest paying the claim because of the incomplete application
Which of the following premium payments for a business related life insurance policy would be tax deductible as an ordinary business expense? a. Split Dollar b. Key Employee c. Buy and Sell d. Group Life
D. Group Life
Which of the following is NOT a characteristic of a Variable Annuity? A. Premium Payments may be level or flexible or single premium B. The cash values are invested in securities. C. The non-forfeiture values will provide for the return of the cash value should the annuitant die during the accumulation period. D. It provides for a tax-free death benefit.
D. It provides for a tax-free death benefit.
You take a prepaid application on Mrs. Santiago on January 1st and issue her a conditional receipt. Mrs. Santiago completes the medical exam on January 5th. On January 20th you receive a policy from your company that is different than the one applied for and you immediately deliver it to Mrs. Santiago. She agrees to pay the increase in premium. Coverage starts when? a. On the policy issue date. b. January 5th c. January 1st d. January 20th
D. January 20th
Which of the following types of life insurance would use a Payor Benefit rider? a. Survivorship Life b. Family Policy c. Family Income Policy d. Juvenile Life
D. Juvenile Life
Which of the following life insurance policy provisions allow the policyowner the right to name and change beneficiaries, to assign the policy to another person, to obtain a policy loan or to surrender the policy for its cash value? a. Entire Contract b. Settlement c. Assignment d. Ownership
D. Ownership
You own a Life Annuity. Which of the following settlement options would guarantee that at least the value of your Annuity would be paid to you or to your estate? a. Straight Life Annuity b. Life Annuity with Period Certain c. Joint and Survivorship Life Annuity d. Refund Life Annuity
D. Refund Life Annuity
William intentionally understates his age on an application for a Term insurance policy. When William dies and the insurance company discovers his true age, the company will do which of the following? a. Pay the stated death benefit minus the extra premium that William should have paid if he had stated his true age. b. Pay the face amount of the policy if the death occurred after the end of the Incontestable period. c. Pay a somewhat reduced death benefit. d. Refuse to pay the claim based on material misrepresentation on the application.
D. Refuse to pay the claim based on material misrepresentation on the application.
In an effort to show true love, Romeo names Juliet as his irrevocable beneficiary on a Variable Universal Life policy. Unfortunately, the relationship does not last, and some time later Romeo falls in love with Gwenevere. What can Romeo do concerning his beneficiary designation? a. Romeo may terminate his existing life insurance policy and purchase a new policy naming Gwenevere as his beneficiary. b. Romeo may put his existing policy on Reduced Paid Up, and purchase a new policy naming Gwenevere as his beneficiary. c. Romeo may not make any substantial changes to his existing policy as he has named Juliet as his irrevocable beneficiary. d. Romeo may now name Gwenevere as his revocable beneficiary.
D. Romeo may now name Gwenevere as his revocable beneficiary.
Marina owns a $200,000 Whole Life Policy in which there is a positive cash value. Marina is out of the country for 7 months on a business trip and fails to pay the premium on time. The policy is NOT placed on Extended Term by the insurance company. This may be explained by which of the following? a. There was a policy loan outstanding. b. Reduced Paid Up is the automatic nonforfeiture value. c. Marina had named a beneficiary on an irrevocable basis. d. The policy contained an Automatic Premium Loan provision.
D. The policy contained an Automatic Premium Loan provision.
Though the Commissioner may issue a limited insurance Producer's license without requiring an examination, he currently administers an exam to which of the following limited insurance Producers? a. Funeral Directors selling pre-need burial plans. b. Those selling flight policies in transportation terminals. c. Those selling baggage insurance in transportation terminals. d. Those selling title insurance in connection with real estate transactions.
Funeral Directors selling pre-need burial plans. Funeral Directors, and their employees who are also licensed funeral directors may obtain a limited license to sell pre-need insurance, after completing the necessary prelicensing course and passing the examination.
Joe sells his policy to a Viatical Company. All of the following are true EXCEPT a. Joe will assign ownership of his policy to the Viatical company. b. Joe will receive the face amount of his life insurance policy from the Viatical company. c. Joe has been diagnosed with a terminal illness d. Joe must be mentally competent
Joe will receive the face amount of his life insurance policy from the Viatical company.
Linda is purchasing a new Universal Life policy. Replacement would be involved in all of the following situations EXCEPT a. Linda will borrow 35% of the cash value of her existing Whole Life policy to purchase the new Universal Life policy. b. Linda will terminate an existing Term to Age 65 policy. c. Linda will allow a one-year Term policy to expire d. Linda will place an existing Whole Life policy on Extended Term.
Linda will allow a one-year Term policy to expire
Viatical Settlement Contracts can also be referred to as a. Section 403(b) Annuities b. Accelerated Death Benefits. c. Viators. d. Living Benefit Agreements
Living Benefit Agreements
As set forth in Indiana law, all of the following are considered to be unfair insurance trade practices EXCEPT a. Making a maliciously critical statement about the financial condition of an insurance company. b. Making an untrue, deceptive or misleading statement about a competitor. c. Lowering the premiums paid by an employer for group insurance based upon loss experiences. d. Restraining trade.
Lowering the premiums paid by an employer for group insurance based upon loss experiences.
All of the following are requirements that you must meet in order to obtain an Indiana insurance Producer's license EXCEPT a. Complete an approved prelicensing course. b. Obtain the sponsorship of an admitted insurance company. c. Make application with the Department of Insurance. d. Pass the licensing examination given by the Commissioner orpersons selected by the Commissioner.
Obtain the sponsorship of an admitted insurance company
Which of the following is allowed under Rule 39, AIDS Underwriting? Select one: a. Using the fact that an individual has sought AIDS counseling as an underwriting criteria. b. Requiring AIDS testing as part of the underwriting process. c. Informing the MIB of the presence of HIV antibodies. d. Providing lower benefi ts for AIDS-related losses than other claims.
Requiring AIDS testing as part of the underwriting process.
What is risk? What is a pure risk?
Risk is the uncertainty of that loss. A pure risk is one that exists rather or not you buy the policy.
What are the two types of major insurance companies? What is the difference?
Stock & Mutual Companies Stock companies are entities created for the benefit of the stockholders. Profits of their investments are called Dividends. Dividends are subject to tax Mutual companies have no owners but are organized for the benefit of the policy owners. Dividends (unneeded premium) are returned to the policy owners. No tax on dividends.
All of the following are true EXCEPT a. The Commissioner must examine all companies doing business in Indiana at least every five years. b. The Commissioner may waive the examination for a foreign or alien company under certain circumstances. c. The Commissioner may examine any company doing business in Indiana at any time. d. The Commissioner may waive the examination for a domestic company, under certain circumstances.
The Commissioner may waive the examination for a domestic company, under certain circumstances.
What is decreasing in a Decreasing Term policy? a. The cash value b. The premium c. The face amount d. The nonforfeiture values
The Face Amount
Bill Black and Dave Decker have formed a partnership known as the Black and Decker Insurance Agency. If Bill becomes permanently and totally disabled, the Commissioner could grant a temporary license to all of the following EXCEPT a. Bill's guardian. b. one of Bill's employees. c. Bill's wife. d. the partnership itself.
The Partnership Itself
Al and Betty Franken wish to obtain a mortgage from Clamdigger's National Bank. The bank wants them to insure the property that is to be mortgaged. Which is true concerning the bank's request? a. The bank can legally require that the property be insured, but it cannot require that the insurance be purchased from the bank. b. The bank can legally require that the property be insured, and that the insurance must be purchased from the bank. c. The bank cannot legally require that the property be insured, but it can require that any insurance purchased on the property be purchased from the bank. d. The bank cannot legally require that the property be insured nor that any insurance which is purchased be purchased from the bank.
The bank can legally require that the property be insured, but it cannot require that the insurance be purchased from the bank
All of the following are required of an individual seeking an Indiana Non Resident Producers License EXCEPT a. The Producer's home state has reciprocity with Indiana b. The individual pass the State Law portion of the Indiana Licensing Exam. c. Be licensed as a resident Producer in their home state. d. The proper application has been submitted.
The individual pass the State Law portion of the Indiana Licensing Exam
All of the following are true regarding controlled business EXCEPT a. Controlled business includes insurance written on yourself. b. The limit for controlled business is 25% of the premium that you write in a year. c. Controlled business includes insurance written on your parents. d. The limit for controlled business is 25% of your commission income in a twelve month period
The limit for controlled business is 25% of the premium that you write in a year.
A Producer may collect both a consulting fee and a commission in the same transaction if a. The Producer is also licensed as a surplus lines Producer. b. The Producer is also licensed as a consultant. c. The Producer is also a licensed broker. d. The Producer makes full disclosure in writing about the compensation arrangements prior to the time that the transaction occurs.
The producer makes full disclosure in writing about the compensation arrangements prior to the time that the transaction occurs. A Producer may not be licensed as a consultant, however, a Producer may act as a consultant if they follow the proper procedures, including full disclosure of the compensation arrangements.
All of the following are qualifications of a resident Producer EXCEPT a. They must be at least 21 years of age. b. They must be an Indiana resident. c. They must have completed an approved prelicensing course. d. They must have passed an examination.
They must be at least 21 years of age. An individual must be 18 years of age.
Which of the following statements is NOT true concerning Life Insurance Solicitation statutes and regulations? a. They require that prospective clients be given a Life Insurance Buyer's Guide prepared by the NAIC. b. They require life insurance policies contain an unconditional right to return the policy within 10 days from policy delivery for a full refund. c. They require a Policy Summary containing generic insurance information. d. They are written by the legislature and/or promulgated by the Commissioner.
They require a Policy Summary containing generic insurance information. The policy summary contains specific information regarding the insurance information
Which of the following is the intent of the Replacement regulation? a. To protect existing insurers from having policies replaced by producers representing companies with inferior life insurance policies. b. To assure that the client is given enough information to make a decision in his or her own best interest c. To determine the penalties if producers or companies fail to comply with the Replacement regulation. d. To limit the number of times replacement may occur.
To assure that the client is given enough information to make a decision in his or her own best interest.
Which of the following is the purpose of the Life Insurance Solicitation (Life Insurance Disclosure) regulation? a. To protect policyowners in the event of a life insurance company insolvency. b. To standardize the provisions of new forms of life insurance products sold in the state. c. To ensure purchasers of life insurance are given enough information to evaluate a policy's cost relative to similar life insurance policies. d. To govern the activities of producers and companies with respect to the replacement of existing life insurance and annuities.
To ensure purchasers of life insurance are given enough information to evaluate a policy's cost relative to similar life insurance policies.
All of the following are benefits which can be paid under an Accelerated Death benefit EXCEPT a. Terminal Illness b. Nursing Home c. Total Disability d. Dread Disease
Total Disability
Under Rule 48, all of the following may trigger Accelerated Death Benefits EXCEPT a. Permanent institutionalization b. A medical condition that will drastically shorten the insured's life. c. Terminal illness. d. Total disability
Total Disability
You are employed by an Indiana insurance agency to talk to prospective clients about your company's insurance policies. When a prospect wishes to purchase insurance, a licensed Producer in the office completes the application for you and signs the forms. You do not sign anything because you are unlicensed. You are acting as a(an) a. Surplus Lines Producer. b. Unlicensed Producer. c. Consultant. d. Limited Lines Producer.
Unlicensed Producer
A type of Annuity in which the cash values are invested in securities is called: a. Variable b. Deferred c. Joint and Survivorship d. Flexible premium
Variable
The primary difference between Viatical Settlements and Accelerated Death benefits is that a. Viaticals are not regulated by the Department of Insurance. b. Viaticals can be used to fund retirement, whereas Accelerated Death Benefits cannot. c. Viaticals require an extra premium, whereas Accelerated Death Benefits do not. d. Viaticals are funded by a third party, whereas in an Accelerated Death Benefit, the proceeds come from the company that issued the original policy.
Vaticals are funded by a third party, whereas in an Accelerated Death Benefit, the proceeds come from the company that issued the original policy.
Under a Viatical Settlement agreement, the insured person is known as the a. Viatical b. Third party c. Viator d. Beneficiary
Viator
What is the difference between warranties and representations?
Warranties are statements that are absolutely true Representations are true to the best knowledge and belief of the applicant.
When does coverage begin on a life insurance policy?
When the first premium is paid.
The insurance company or its producer must provide a prospective life insurance purchaser with a Buyer's Guide and a Policy Summary in which of the following types of life insurance sales? a. Credit Life b. Whole Life c. Group Life d. Variable Life
Whole Life
If the Commissioner has reason to believe that you have violated the Unfair Competition Law, several events may occur. These include all of the following EXCEPT a. You may request a judicial review of the Commissioner's order. b. You are subject to a fine of not more than $1,000 for each violation, not to exceed $5,000 in any 6-month period. c. The Commissioner may conduct a hearing after giving you at least 5 days written notification. d. Based upon his findings, at a hearing the Commissioner can issue a cease-and-desist order.
You are subject to a fine of not more than $1,000 for each violation, not to exceed $5,000 in any 6-month period. The limits for fines are $25K per violation for unknowing violations and $50K per violation for knowing violations of the law.
What are the responsibilities of the agent at the time of application?
You have to make sure that the purchase is in the best interest of the insured
If the Commissioner finds you guilty of violating Producer Licensing Law, all of the following may occur EXCEPT a. You may be jailed for up to 365 days. b. You may have your license revoked or suspended. c. A hearing will be held, should you request it. d. You may be fined up to $10,000.
You may be jailed for up to 365 days. The Commissioner cannot jail anyone; only a Judge has that power.