Indiana Life Insurance Exam u u u
Which of the following is NOT a characteristic of a Variable Annuity?
u u u u u u u u u u u
A. Premium Payments may be level or flexible or single premium
u u u u u u u u u u
B. The cash values are invested in securities.
u u u u u u u
C. The non-
u u
forfeiture values will provide for the return of the cash value should the annuitant die during the accumulatio
u u u u u u u u u u u u u u u u u
n period.
u
D. It provides for a tax-free death benefit. - Answer-D. It provides for a tax-free death benefit.
u u u u u u u u u u u u u u u u
All of the following policies provide for the tax deferred accumulation of cash value EXCEPT:
u u u u u u u u u u u u u u
A. Interest Sensitive Whole Life
u u u u
B. Single Premium Variable Annuity
u u u u
C. Variable Universal Life
u u u
D. Term Life - Answer-D. Term Life
u u u u u u
All of the following are true statements about the taxation of life insurance benefits except:
u u u u u u u u u u u u u u
A. Policy loans are taxed as ordinary income
u u u u u u u
B. The cash value in a life insurance policy grows on a tax deferred basis.
u u u u u u u u u u u u u u
C. The interest earned on the "interest" Settlement Option is taxed as ordinary income.
u u u u u u u u u u u u u
D. The death benefit of a life policy is received by the beneficiary federal income tax free. - Answer-
u u u u u u u u u u u u u u u u u u
A. Policy loans are taxed as ordinary income
u u u u u u u
Which of the following statements is true about the Group Life conversion privilege?
u u u u u u u u u u u u
a. Death during the conversion period is covered even if the departing employee chooses NOT to convert to
u u u u u u u u u u u u u u u u u
uan individual policy.
u u
b. The departing employee must pay the premium if they elect to be covered during the conversion period.
u u u u u u u u u u u u u u u u u
c. If a departing employee elects to convert their life insurance, the company must offer Term insurance as
u u u u u u u u u u u u u u u u u u
a choice.
u
d. Under the COBRA laws a departing employee may elect to remain a member of the Group Life plan for a
u u u u u u u u u u u u u u u u u u u u u
limited period of time. - Answer-
u u u u u
A. Death during the conversion period is covered even if the departing employee chooses NOT to convert t
u u u u u u u u u u u u u u u u u
o an individual policy.
u u u
Which of the following is a combination of Decreasing Term and Whole Life?
u u u u u u u u u u u u
a. Family Income Policy
u u u
b. Family Maintenance Policy
u u u
c. Modified Life
u u
d. Family Policy - Answer-A. Family Income Policy
u u u u u u u
A type of Annuity in which the cash values are invested in securities is called:
u u u u u u u u u u u u u u
a. Variable
u
b. Deferred
u
c. Joint and Survivorship
u u u
d. Flexible premium - Answer-Variable
u u u u
,Mary is receiving an annuity payout from her Variable Straight Life Annuity. Upon her death, which of the foll
u u u u u u u u u u u u u u u u u u
owing will be payable to her estate?
u u u u u u
a. Nothing
u
b. The policy death benefit
u u u u
c. The remaining value of her account
u u u u u u
d. The total premiums paid into the account, less the amount paid to Mary in benefits - Answer-A. Nothing
u u u u u u u u u u u u u u u u u u
What is decreasing in a Decreasing Term policy?
u u u u u u u
a. The cash value
u u u
b. The premium
u u
c. The face amount
u u u
d. The nonforfeiture values - Answer-The Face Amount
u u u u u u u
Endowment policies can mature in two ways. What are they? u u u u u u u u u
a. The insured dies during the policy period or annuitizes the policy after age 59&1/2.
u u u u u u u u u u u u u u
b. The insured dies during the policy period or reaches the endowment age as designated in the policy.
u u u u u u u u u u u u u u u u u
c. The insured dies during the policy period or retires at age 59&1/2.
u u u u u u u u u u u u
d. The insured dies or reaches age 100. - Answer-
u u u u u u u u u
B. The insured dies during the policy period or reaches the endowment age as designated in the policy.
u u u u u u u u u u u u u u u u u
At age 30, Joe Insured purchases a 20 Pay Whole Life Policy. Which of the following statements is true reg
u u u u u u u u u u u u u u u u u u u
arding Joe's policy coverage?
u u u
a. Joe's death protection will end at age 50.
u u u u u u u u
b. Joe's nonforfeiture values will end at age 50.
u u u u u u u u
c. Joe will be able to stop paying the premiums at age 50, but his death protection will run through age 100.
u u u u u u u u u u u u u u u u u u u u u
d. At age 50, Joe's cash value will equal the face value of his contract. - Answer-
u u u u u u u u u u u u u u u u
C. Joe will be able to stop paying the premiums at age 50, but his death protection will run through age 100.
u u u u u u u u u u u u u u u u u u u u u
Warranties are: u
a. The same as representations.
u u u u
b. Statements that are absolutely true.
u u u u u
c. Statements that are believed to be true.
u u u u u u u
d. Critical to the formation of a life insurance contractual agreement. - Answer-
u u u u u u u u u u u u
B. Statements that are absolutely true.
u u u u u
All the following are reasons why an insurance company may not pay a death benefit under a Term life insur
u u u u u u u u u u u u u u u u u u u
ance policy EXCEPT:
u u
a. A suicide before the end of the first two policy years.
u u u u u u u u u u u
b. Non payment of premium.
u u u u
c. An accidental death resulting from drowning.
u u u u u u
d. A material misrepresentation on the application discovered before the end of the contestable period. -
u u u u u u u u u u u u u u u
Answer-C. An accidental death resulting from drowning.
u u u u u u u
Which of the following life insurance policies offers the build up of cash value on an interest-
u u u u u u u u u u u u u u u u
sensitive basis and the right to make partial withdrawals of that cash value without interest?
u u u u u u u u u u u u u u
a. Universal Life
u u
b. Adjustable Life
u u
c. Variable Universal Life
u u u
d. Variable Whole Life - Answer-A. Universal Life
u u u u u u u
, Joel owns a $100,000 face amount Whole Life policy which has a cash value of $11,000. There is also an o
u u u u u u u u u u u u u u u u u u u u
utstanding loan of $4,000. If Joel dies, how much would the insurance company pay to his beneficiary?
u u u u u u u u u u u u u u u u
a. $96,000
u
b. $100,000
u
c. $111,000
u
d. $107,000 - Answer-A. $96,000
u u u u
You own a Life Annuity. Which of the following settlement options would guarantee that at least the value of
u u u u u u u u u u u u u u u u u u u
your Annuity would be paid to you or to your estate?
u u u u u u u u u u
a. Straight Life Annuity
u u u
b. Life Annuity with Period Certain
u u u u u
c. Joint and Survivorship Life Annuity
u u u u u
d. Refund Life Annuity - Answer-D. Refund Life Annuity
u u u u u u u u
Which of the following statements is NOT true about Fixed Annuities?
u u u u u u u u u u
a. A securities license is necessary to sell Fixed Annuities.
u u u u u u u u u
b. There will be a guaranteed minimum rate of return payable on the investment.
u u u u u u u u u u u u u
c. Monies cannot be withdrawn prior to age 59 1/2 without penalty.
u u u u u u u u u u u
d. The monies invested will be in the company's General Account. - Answer-
u u u u u u u u u u u u
A. A securities license is necessary to sell Fixed Annuities
u u u u u u u u u
Agent Steve takes a prepaid application from applicant Cindy and issues a 30 day Interim Term insurance r
u u u u u u u u u u u u u u u u u
eceipt to Cindy. The effective date of the interim coverage will be on the:
u u u u u u u u u u u u u
a. policy delivery date.
u u u
b. date of application or date of the medical exam, which ever occurs last, if the proposed insured is insurabl
u u u u u u u u u u u u u u u u u u u
e on that key date.
u u u u
c. date of application.
u u u
d. policy issue date. - Answer-C. Date of Application
u u u u u u u u
Which of the following regulates Group Life insurance conversion privileges?
u u u u u u u u u
a. State Law
u u
b. HIPAA
u
c. COBRA
u
d. HCFA - Answer-A. State Law
u u u u u
Which of the following is true of a Whole Life policy purchased with a single premium?
u u u u u u u u u u u u u u u
a. The incontestable period will be shorter than it otherwise would have been.
u u u u u u u u u u u u
b. The cash values will be larger than they otherwise would have been in the earlier policy years.
u u u u u u u u u u u u u u u u u
c. The suicide clause will be waived.
u u u u u u
d. The death benefit will be larger than if the policy was purchased with a limited pay system. - Answer-
u u u u u u u u u u u u u u u u u u u
B. The cash values will be larger than they otherwise would have been in the earlier policy years.
u u u u u u u u u u u u u u u u u
The Reinstatement provision in a Whole Life policy states all the following EXCEPT that the:
u u u u u u u u u u u u u u
a. policy on Extended Term may not be reinstated.
u u u u u u u u
b. insured must pay all past due premiums plus interest.
u u u u u u u u u
c. reinstatement must occur within a designated period of time (such as three years).
u u u u u u u u u u u u u
d. insured must provide proof of insurability. - Answer-
u u u u u u u u
A. The policy on Extended Term may not be reinstated.
u u u u u u u u u
Which of the following is NOT a characteristic of a Variable Annuity?
u u u u u u u u u u u
A. Premium Payments may be level or flexible or single premium
u u u u u u u u u u
B. The cash values are invested in securities.
u u u u u u u
C. The non-
u u
forfeiture values will provide for the return of the cash value should the annuitant die during the accumulatio
u u u u u u u u u u u u u u u u u
n period.
u
D. It provides for a tax-free death benefit. - Answer-D. It provides for a tax-free death benefit.
u u u u u u u u u u u u u u u u
All of the following policies provide for the tax deferred accumulation of cash value EXCEPT:
u u u u u u u u u u u u u u
A. Interest Sensitive Whole Life
u u u u
B. Single Premium Variable Annuity
u u u u
C. Variable Universal Life
u u u
D. Term Life - Answer-D. Term Life
u u u u u u
All of the following are true statements about the taxation of life insurance benefits except:
u u u u u u u u u u u u u u
A. Policy loans are taxed as ordinary income
u u u u u u u
B. The cash value in a life insurance policy grows on a tax deferred basis.
u u u u u u u u u u u u u u
C. The interest earned on the "interest" Settlement Option is taxed as ordinary income.
u u u u u u u u u u u u u
D. The death benefit of a life policy is received by the beneficiary federal income tax free. - Answer-
u u u u u u u u u u u u u u u u u u
A. Policy loans are taxed as ordinary income
u u u u u u u
Which of the following statements is true about the Group Life conversion privilege?
u u u u u u u u u u u u
a. Death during the conversion period is covered even if the departing employee chooses NOT to convert to
u u u u u u u u u u u u u u u u u
uan individual policy.
u u
b. The departing employee must pay the premium if they elect to be covered during the conversion period.
u u u u u u u u u u u u u u u u u
c. If a departing employee elects to convert their life insurance, the company must offer Term insurance as
u u u u u u u u u u u u u u u u u u
a choice.
u
d. Under the COBRA laws a departing employee may elect to remain a member of the Group Life plan for a
u u u u u u u u u u u u u u u u u u u u u
limited period of time. - Answer-
u u u u u
A. Death during the conversion period is covered even if the departing employee chooses NOT to convert t
u u u u u u u u u u u u u u u u u
o an individual policy.
u u u
Which of the following is a combination of Decreasing Term and Whole Life?
u u u u u u u u u u u u
a. Family Income Policy
u u u
b. Family Maintenance Policy
u u u
c. Modified Life
u u
d. Family Policy - Answer-A. Family Income Policy
u u u u u u u
A type of Annuity in which the cash values are invested in securities is called:
u u u u u u u u u u u u u u
a. Variable
u
b. Deferred
u
c. Joint and Survivorship
u u u
d. Flexible premium - Answer-Variable
u u u u
,Mary is receiving an annuity payout from her Variable Straight Life Annuity. Upon her death, which of the foll
u u u u u u u u u u u u u u u u u u
owing will be payable to her estate?
u u u u u u
a. Nothing
u
b. The policy death benefit
u u u u
c. The remaining value of her account
u u u u u u
d. The total premiums paid into the account, less the amount paid to Mary in benefits - Answer-A. Nothing
u u u u u u u u u u u u u u u u u u
What is decreasing in a Decreasing Term policy?
u u u u u u u
a. The cash value
u u u
b. The premium
u u
c. The face amount
u u u
d. The nonforfeiture values - Answer-The Face Amount
u u u u u u u
Endowment policies can mature in two ways. What are they? u u u u u u u u u
a. The insured dies during the policy period or annuitizes the policy after age 59&1/2.
u u u u u u u u u u u u u u
b. The insured dies during the policy period or reaches the endowment age as designated in the policy.
u u u u u u u u u u u u u u u u u
c. The insured dies during the policy period or retires at age 59&1/2.
u u u u u u u u u u u u
d. The insured dies or reaches age 100. - Answer-
u u u u u u u u u
B. The insured dies during the policy period or reaches the endowment age as designated in the policy.
u u u u u u u u u u u u u u u u u
At age 30, Joe Insured purchases a 20 Pay Whole Life Policy. Which of the following statements is true reg
u u u u u u u u u u u u u u u u u u u
arding Joe's policy coverage?
u u u
a. Joe's death protection will end at age 50.
u u u u u u u u
b. Joe's nonforfeiture values will end at age 50.
u u u u u u u u
c. Joe will be able to stop paying the premiums at age 50, but his death protection will run through age 100.
u u u u u u u u u u u u u u u u u u u u u
d. At age 50, Joe's cash value will equal the face value of his contract. - Answer-
u u u u u u u u u u u u u u u u
C. Joe will be able to stop paying the premiums at age 50, but his death protection will run through age 100.
u u u u u u u u u u u u u u u u u u u u u
Warranties are: u
a. The same as representations.
u u u u
b. Statements that are absolutely true.
u u u u u
c. Statements that are believed to be true.
u u u u u u u
d. Critical to the formation of a life insurance contractual agreement. - Answer-
u u u u u u u u u u u u
B. Statements that are absolutely true.
u u u u u
All the following are reasons why an insurance company may not pay a death benefit under a Term life insur
u u u u u u u u u u u u u u u u u u u
ance policy EXCEPT:
u u
a. A suicide before the end of the first two policy years.
u u u u u u u u u u u
b. Non payment of premium.
u u u u
c. An accidental death resulting from drowning.
u u u u u u
d. A material misrepresentation on the application discovered before the end of the contestable period. -
u u u u u u u u u u u u u u u
Answer-C. An accidental death resulting from drowning.
u u u u u u u
Which of the following life insurance policies offers the build up of cash value on an interest-
u u u u u u u u u u u u u u u u
sensitive basis and the right to make partial withdrawals of that cash value without interest?
u u u u u u u u u u u u u u
a. Universal Life
u u
b. Adjustable Life
u u
c. Variable Universal Life
u u u
d. Variable Whole Life - Answer-A. Universal Life
u u u u u u u
, Joel owns a $100,000 face amount Whole Life policy which has a cash value of $11,000. There is also an o
u u u u u u u u u u u u u u u u u u u u
utstanding loan of $4,000. If Joel dies, how much would the insurance company pay to his beneficiary?
u u u u u u u u u u u u u u u u
a. $96,000
u
b. $100,000
u
c. $111,000
u
d. $107,000 - Answer-A. $96,000
u u u u
You own a Life Annuity. Which of the following settlement options would guarantee that at least the value of
u u u u u u u u u u u u u u u u u u u
your Annuity would be paid to you or to your estate?
u u u u u u u u u u
a. Straight Life Annuity
u u u
b. Life Annuity with Period Certain
u u u u u
c. Joint and Survivorship Life Annuity
u u u u u
d. Refund Life Annuity - Answer-D. Refund Life Annuity
u u u u u u u u
Which of the following statements is NOT true about Fixed Annuities?
u u u u u u u u u u
a. A securities license is necessary to sell Fixed Annuities.
u u u u u u u u u
b. There will be a guaranteed minimum rate of return payable on the investment.
u u u u u u u u u u u u u
c. Monies cannot be withdrawn prior to age 59 1/2 without penalty.
u u u u u u u u u u u
d. The monies invested will be in the company's General Account. - Answer-
u u u u u u u u u u u u
A. A securities license is necessary to sell Fixed Annuities
u u u u u u u u u
Agent Steve takes a prepaid application from applicant Cindy and issues a 30 day Interim Term insurance r
u u u u u u u u u u u u u u u u u
eceipt to Cindy. The effective date of the interim coverage will be on the:
u u u u u u u u u u u u u
a. policy delivery date.
u u u
b. date of application or date of the medical exam, which ever occurs last, if the proposed insured is insurabl
u u u u u u u u u u u u u u u u u u u
e on that key date.
u u u u
c. date of application.
u u u
d. policy issue date. - Answer-C. Date of Application
u u u u u u u u
Which of the following regulates Group Life insurance conversion privileges?
u u u u u u u u u
a. State Law
u u
b. HIPAA
u
c. COBRA
u
d. HCFA - Answer-A. State Law
u u u u u
Which of the following is true of a Whole Life policy purchased with a single premium?
u u u u u u u u u u u u u u u
a. The incontestable period will be shorter than it otherwise would have been.
u u u u u u u u u u u u
b. The cash values will be larger than they otherwise would have been in the earlier policy years.
u u u u u u u u u u u u u u u u u
c. The suicide clause will be waived.
u u u u u u
d. The death benefit will be larger than if the policy was purchased with a limited pay system. - Answer-
u u u u u u u u u u u u u u u u u u u
B. The cash values will be larger than they otherwise would have been in the earlier policy years.
u u u u u u u u u u u u u u u u u
The Reinstatement provision in a Whole Life policy states all the following EXCEPT that the:
u u u u u u u u u u u u u u
a. policy on Extended Term may not be reinstated.
u u u u u u u u
b. insured must pay all past due premiums plus interest.
u u u u u u u u u
c. reinstatement must occur within a designated period of time (such as three years).
u u u u u u u u u u u u u
d. insured must provide proof of insurability. - Answer-
u u u u u u u u
A. The policy on Extended Term may not be reinstated.
u u u u u u u u u
