INDIANA LIFE HEALTH INSURANCE EXAM

PDF Download INDIANA LIFE & HEALTH INSURANCE EXAM Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -87 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: 3 Basic Types of Term Life Insurance

Answer:

level, increasing, and decreasing

Question 2: Fixed-Period Installments

Answer:

annuitant selects the time period for the benefits, and insurer determines how much each payment will be, based on the value of the account and future earnings projections; pays for a specified amount of time only, whether or not the annuitant is living

Question 3: Modified Life

Answer:

lower premium in first few policy years (3 to 5 years) and higher level premium for remainder of insured's life

Question 4: Automatic Premium Loans

Answer:

loan that prevents the unintentional lapse of a policy

Question 5: Suitability

Answer:

how well a recommended product will meet the applicant's needs an resources

Question 6: Owner Privileges of Adjustable Life

Answer:

increase/decrease the premium, change the premium-paying period, increase/decrease the face amount of coverage, change the period of protection

Question 7: Accumulation Phase

Answer:

period after an annuity has been purchased but before distributions begin

Question 8: 7-Pay Test

Answer:

cumulative premiums paid during the first 7 years of the policy must not exceed the total amount of net level premiums that would be required to pay the policy up using guaranteed mortality costs and interest; new test required any time there is a material change to a policy (increase in death benefit); essentially, determines if policy is "overfunded" or if it's a MEC

Question 9: Single Premium Deferred Annuities (SPDAs)

Answer:

annuity is purchased with single payment, but benefit isn't paid until after one year or more has elapsed

Question 10: Preferred Risk

Answer:

results in lower premium

Question 11: Spendthrift Clause

Answer:

protects beneficiaries from the claims of their creditors; designed to protect life insurance policy proceeds that have not yet been paid to a named beneficiary from the claims of the creditors of the beneficiary of policy owner

Question 12: Annuity

Answer:

contract that provides income for a specified period of years, or for life; protects person against outliving his or her money; vehicle for accumulation of money and the liquidation of an estate; deferred grows tax free

Question 13: Policy Loan

Answer:

loan from cash value of life insurance policy; not income taxable to the policy owner; individual cannot receive a deduction for interest paid on life insurance policy loan

Question 14: Payor Benefit Rider

Answer:

if the payor becomes disabled for at least 6 months or dies, insurer will wave the premiums until the minor reaches a certain age, such as 21; primarily used with juvenile policies (written on the life of a minor); also used when the owner and the insured are two different individuals

Question 15: Joint LIfe

Answer:

insures two or more lives; term or permanent; premium based on a joint average age and the death benefit is paid upon the first death only

Question 16: Survivorship Life

Answer:

premium based on joint age; pays on the last death; lower premium than joint life; used to offset the liability of the estate tax upon the death of the last insured

Question 17: Family Income Policy

Answer:

principle wage earner is the only family member insured

Question 18: Re-entry Option

Answer:

the insured, upon the end of a term policy with guaranteed renewable option, may qualify for a discounted premium rate with proof of insurability

Question 19: Interest Sensitive Whole Life (Current Assumption Life)

Answer:

provides same benefits as traditional whole life policies with added benefit of current interest rates which may allow for either greater cash value accumulation or a shorter premium-paying period

Question 20: Riders

Answer:

modify provisions that already exist; used to increase or decrease policy benefits and premiums

Question 21: Continuous Premium (Straight Life or Ordinary Life)

Answer:

basic whole life policy; will typically have the lowest annual premium

Question 22: Straight Life

Answer:

charge a level annual premium for the lifetime of the insured and provide a level, guaranteed death benefit

Question 23: Installment Refund (Annuity)

Answer:

when annuitant dies, beneficiary will continue to receive guaranteed installments until the entire principal amount has been paid out

Question 24: Variable Life Insurance and Annuities

Answer:

cash values accumulate based upon a specific portfolio of stocks without guarantees of performance; keep pace with inflation, and are determined by the value of securities backing it

Question 25: Warranty

Answer:

a statement guaranteed to be true

Question 26: Right to Examine (Free Look)

Answer:

allows policy owner a specified number of days from receipt to look over the policy and if dissatisfied for any reason, return it for a full refund of premium; starts when policy owner receives policy