Indiana Life & Health Insurance Exam
2024-2025 Edition. All Exam Questions &
Answers. Graded A+
3 Basic Types of Term Life Insurance - ANSlevel, increasing, and decreasing
7-Pay Test - ANScumulative 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
Absolute Assignment - ANStransferring all rights of ownership to another person or
entity; new policy owner doesn't need to have insurable interest in the insured
Accidental Death Rider - ANSpays some multiple of the face amount if the death is the
result of an accident as defined in the policy; death must usually occur within 90 days of
such an accident
Accumulation Period - ANSthe pay-in period; the period of time over which the owner
makes payments (premiums) into an annuity; period during which payments earn
interest on a tax-deferred basis
Accumulation Phase - ANSperiod after an annuity has been purchased but before
distributions begin
Adjustable LIfe - ANSinsured determines how much coverage is needed and the
affordable amount of premium; as insured's needs change, policy owner may make
adjustments such as increase or decrease the premium or the premium paying period,
increase or decrease the face amount (requires proof of insurability for increasing the
death benefit or changing to a lower premium type policy), or change the period of
protection; policy owner also has option of converting from term to whole life or vice
versa
Annually Renewable Term (ART) - ANSpremium increases annually according to
attained age; policy may be guaranteed to be renewable each without proof of
insurability
Annuity - ANScontract 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
, Annuity Income Amount Based On - ANSamount of premium paid or cash value
accumulated; frequency of payment; interest rate; annuitant's age and gender
Annuity Period - ANSknown as annuitization period, liquidation period, or pay-out
period; time during which the sum that has been accumulated during the accumulation
period is converted into a stream of income payments to the annuitant; may last for the
lifetime of the annuitant or for a specified period, which could be longer or shorter
Application of State Law - ANSprovision that states that no matter what the home state
of the insurance company or the applicant is, the law of the state in which the policy is
sold would be considered the law under which the policy will be enforced
Automatic Premium Loans - ANSloan that prevents the unintentional lapse of a policy
Bail-Out Provision (Annuity) - ANSallows the contract holder, in the event that interest
rates drop a specified amount within a specified time frame, to surrender the contract
without charge
Buy-Sell Agreement - ANSbusiness continuation agreement that determines what will
be done with the business in the event that an owner dies or becomes disabled
Cash Refund (Annuity) - ANSwhen annuitant dies, the annuitant's beneficiary receives a
refund of the principal, or the original amount paid into the annuity minus benefit
payments already made to the annuitant; guarantees the return of the amount to
purchase the annuity but it does not guarantee to pay any interest; only difference
between cash refund and installment refund is that cash refund is a lump-sum payment
Collateral Assignment - ANStransfer of partial rights to another person; usually done to
secure a loan or some other transaction; partial and temporary assignment of some of
the policy rights; once debt/loan repaid, assigned rights returned to the policy owner
Common Disaster Clause - ANSprovided under the Uniform Simultaneous Death Law;
assumed that the primary beneficiary died first in a common disasters; most insurers
specify a certain period of time, usually 14 to 30 days, in which death must occur for this
provision to apply; as long as the beneficiary dies within this specified period of time
following the death of the insured, it will still be interpreted that the beneficiary died first
Concealment - ANSoccurs when a person withholds a material fact that is crucial to
making a decision; in insurance, this involves withholding information that would be
crucial to underwriting decisions
Continuous Premium (Straight Life or Ordinary Life) - ANSbasic whole life policy; will
typically have the lowest annual premium
2024-2025 Edition. All Exam Questions &
Answers. Graded A+
3 Basic Types of Term Life Insurance - ANSlevel, increasing, and decreasing
7-Pay Test - ANScumulative 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
Absolute Assignment - ANStransferring all rights of ownership to another person or
entity; new policy owner doesn't need to have insurable interest in the insured
Accidental Death Rider - ANSpays some multiple of the face amount if the death is the
result of an accident as defined in the policy; death must usually occur within 90 days of
such an accident
Accumulation Period - ANSthe pay-in period; the period of time over which the owner
makes payments (premiums) into an annuity; period during which payments earn
interest on a tax-deferred basis
Accumulation Phase - ANSperiod after an annuity has been purchased but before
distributions begin
Adjustable LIfe - ANSinsured determines how much coverage is needed and the
affordable amount of premium; as insured's needs change, policy owner may make
adjustments such as increase or decrease the premium or the premium paying period,
increase or decrease the face amount (requires proof of insurability for increasing the
death benefit or changing to a lower premium type policy), or change the period of
protection; policy owner also has option of converting from term to whole life or vice
versa
Annually Renewable Term (ART) - ANSpremium increases annually according to
attained age; policy may be guaranteed to be renewable each without proof of
insurability
Annuity - ANScontract 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
, Annuity Income Amount Based On - ANSamount of premium paid or cash value
accumulated; frequency of payment; interest rate; annuitant's age and gender
Annuity Period - ANSknown as annuitization period, liquidation period, or pay-out
period; time during which the sum that has been accumulated during the accumulation
period is converted into a stream of income payments to the annuitant; may last for the
lifetime of the annuitant or for a specified period, which could be longer or shorter
Application of State Law - ANSprovision that states that no matter what the home state
of the insurance company or the applicant is, the law of the state in which the policy is
sold would be considered the law under which the policy will be enforced
Automatic Premium Loans - ANSloan that prevents the unintentional lapse of a policy
Bail-Out Provision (Annuity) - ANSallows the contract holder, in the event that interest
rates drop a specified amount within a specified time frame, to surrender the contract
without charge
Buy-Sell Agreement - ANSbusiness continuation agreement that determines what will
be done with the business in the event that an owner dies or becomes disabled
Cash Refund (Annuity) - ANSwhen annuitant dies, the annuitant's beneficiary receives a
refund of the principal, or the original amount paid into the annuity minus benefit
payments already made to the annuitant; guarantees the return of the amount to
purchase the annuity but it does not guarantee to pay any interest; only difference
between cash refund and installment refund is that cash refund is a lump-sum payment
Collateral Assignment - ANStransfer of partial rights to another person; usually done to
secure a loan or some other transaction; partial and temporary assignment of some of
the policy rights; once debt/loan repaid, assigned rights returned to the policy owner
Common Disaster Clause - ANSprovided under the Uniform Simultaneous Death Law;
assumed that the primary beneficiary died first in a common disasters; most insurers
specify a certain period of time, usually 14 to 30 days, in which death must occur for this
provision to apply; as long as the beneficiary dies within this specified period of time
following the death of the insured, it will still be interpreted that the beneficiary died first
Concealment - ANSoccurs when a person withholds a material fact that is crucial to
making a decision; in insurance, this involves withholding information that would be
crucial to underwriting decisions
Continuous Premium (Straight Life or Ordinary Life) - ANSbasic whole life policy; will
typically have the lowest annual premium
