Indiana Life Insurance Exam Latest Update -

Indiana Life Insurance Exam Latest Update - 200 Questions and 100% Verified Correct Answers Guaranteed A+

A contract sold by an insurance company that promises to pay an income to the

policyowner until his/her death is called a:

• Survivorship Life
• Family Income Policy
• Straight Life Annuity

d. Modified Endowment - CORRECT ANSWER: C. Straight Life Annuity

A Family policy is constructed using what two kinds of Life insurance products?

• Whole Life and Decreasing Term
• Convertible Term and Decreasing Term
• Whole Life and Level Term
• Whole Life and Convertible Term - CORRECT ANSWER: Whole Life & Convertible

Term

A full lines Producer renewing a two year license must have

• 24 Hours of Continuing education
• 10 Hours of Continuing education.
• 15 Hours of Continuing education.

d. 30 Hours of Continuing education - CORRECT ANSWER: 24 Hours of Continuing

Education

A Keogh plan would allow an annual contribution of up to

• 20 percent of total earned income.
• 10 percent of total earned income.
• 15 percent of total earned income.

d. 30 percent of total earned income. - CORRECT ANSWER: 20% of total earned

income

Maximum annual contributions are limited to the lesser of $30,000 or 20 percent of total earned income (25% of the after-contribution income).

A life insurance death benefit is

• Always credited as income and taxed on the deceased's final income tax return.
• Not subject to Federal income tax.
• Subject to Federal Income tax on the growth, but not on the premium dollars paid. 1 / 4

• Taxed as ordinary income to the beneficiary. - CORRECT ANSWER: Not subject to

Federal Income Tax

The fact that the death benefit of a life policy paid to the beneficiary is NOT taxed is one of the major advantages of life insurance.

A life insurance policy that has cash value which grows faster than the cash value of a Seven Pay Whole Life policy is known as

• An Endowment policy.
• Modified Life policy.
• A Modified Endowment Contract.

d. A Modified Superstock Pro. - CORRECT ANSWER: A Modified Endowment Contract

A Multiple Indemnity rider does which of the following?

• Waives the premium on the policy if the insured should become disabled.
• Pays an amount in addition to the death benefit if the insured dies in an accident.
• Pays an equal amount to a multiple number of beneficiaries.
• Pays an amount in addition to the death benefit if the insured dies before age 60 or

65. - CORRECT ANSWER: Pays an amount in addition to the death benefit if the

insured dies in an accident.

A Producer may collect both a consulting fee and a commission in the same transaction if

• The Producer is also licensed as a surplus lines Producer.
• The Producer is also licensed as a consultant.
• The Producer is also a licensed broker.
• The Producer makes full disclosure in writing about the compensation arrangements

prior to the time that the transaction occurs. - CORRECT ANSWER: 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.

A rated individual cannot select which of the following options?

• Paid-up Additions.
• Extended Term.
• Reduced Paid-up.

d. Cash. - CORRECT ANSWER: Extended Term

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A rated individual represents an adverse selection risk. If we allowed them to select Extended Term as a Nonforfeiture option, it means they would have the same level of death benefit without paying additional premium dollars.

A Renewable Term life insurance policy is:

• Renewable from time to time up to a certain age with renewal premium based on the

insured's attained age.

• Automatically converted into Whole Life after a designated period of time.
• Renewable as long as the insured can provide evidence of insurability.

d. Renewable at any age through age 100. - CORRECT ANSWER: A. Renewable from

time to time up to a certain age with renewal premium based on the insured's attained age.

A Straight Life Annuity pays

• Until age 100.
• Only upon the death of the annuitant.
• Until the money in the annuity is gone.
• Throughout the life of the annuitant. - CORRECT ANSWER: Throughout the life of

the annuitant

A Term insurance policy in which the death benefit remains constant is called

• Decreasing Term.
• Level premium Term.
• Level Term.

d. Increasing Term. - CORRECT ANSWER: Level Term

Increasing Term: face amount increases over time. Decreasing term: face amount goes

down over time. Level: fixed... the face amount doesn't change over time. Level

premium: here the emphasis is on the PREMIUM, not the face amount, so the premium is level throughout the life of the policy.

A Term insurance policy provides

• Death benefit but no cash value.
• Cash value but no death benefit.
• Cash value plus a death benefit.

d. A guaranteed retirement income. - CORRECT ANSWER: Death Benefit but no cash

value

Unlike Whole Life policies, Term insurance policies do not have cash value.

A type of Annuity in which the cash values are invested in securities is called:

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• Variable
• Deferred
• Joint and Survivorship

d. Flexible premium - CORRECT ANSWER: Variable

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:

• Re-entry Term
• Renewable Term
• Convertible Term

d. Decreasing Premium Term - CORRECT ANSWER: A. Re-entry Term

A Whole Life policy matures at age 100. The tax implications for the policyowner/insured are that he/she

• Will be taxed on the entire value of the policy.
• Will be taxed only on the interest dollars that grew in the policy, not the premium

dollars paid.

• Will be taxed and pay a 10% penalty
• Will not be taxed at all. - CORRECT ANSWER: Will be taxed only on the interest

dollars that grew in the policy, not the premium dollars paid.

If a policyowner/insured lived to age 100, the policy would ENDOW and the insurance company would pay the face amount of the policy to the policyowner. However, it is NOT a death benefit, and therefore is NOT tax free. The policyowner would be taxed on the interest earned on the policy.

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:

• policy delivery date.
• date of application or date of the medical exam, which ever occurs last, if the

proposed insured is insurable on that key date.

• date of application.

d. policy issue date. - CORRECT ANSWER: C. Date of Application

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?

• The bank can legally require that the property be insured, but it cannot require that

the insurance be purchased from the bank.

• The bank can legally require that the property be insured, and that the insurance

must be purchased from the bank.

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