Indiana Life & Health Insurance Exam complete solution rated A+
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Course
Indiana Life
Institution
Indiana Life
Indiana Life & Health Insurance Exam complete solution rated A+/Indiana Life & Health Insurance Exam complete solution rated A+/Indiana Life & Health Insurance Exam complete solution rated A+
Indiana Life & Health Insurance Exam
Participating Insurance Policy - correct answer may pay dividends to the
policyowner
Material Misrepresentation - correct answer misstatement to a question asked in
the application process; death benefit claim will likely be denied
Law of Large Numbers - correct answer the larger a group becomes, the easier it
is to predict losses; used to predict certain types of losses and set appropriate
premiums
Substandard Risk - correct answer results in higher premium
Standard Risk - correct answer results in standard premium
Preferred Risk - correct answer results in lower premium
Expense Loading - correct answer combined with premiums to spread the
operating costs of a business to all insureds
Net Premium - correct answer premiums without expense loading
Concealment - correct answer occurs 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
Warranty - correct answer a statement guaranteed to be true
Representation - correct answer a statement true to the best of an applicant's
knowledge
3 Basic Types of Term Life Insurance - correct answer level, increasing, and
decreasing
Level Term - correct answer death benefit doesn't change throughout the life of
the policy
Annually Renewable Term (ART) - correct answer premium increases annually
according to attained age; policy may be guaranteed to be renewable each
without proof of insurability
, Indiana Life & Health Insurance Exam
Re-entry Option - correct 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
Decreasing Term - correct answer death benefit decreases each year over
duration of the policy term; typically used when the amount of needed protection
is time sensitive, or decreases over time
Increasing Term - correct answer death benefit increases each year over duration
of the policy term (usually by specific amount or percentage of original amount);
often used by insurance companies to fund certain riders that provide a refund of
premiums of a gradual increase in total coverage, such as the cost of living or
return of premium riders
Convertible Term - correct answer provides the policy owner with the right to
convert the policy to a permanent insurance policy without evidence of
insurability; premium will be based on the insured's attained age at the time of
conversion
Continuous Premium (Straight Life or Ordinary Life) - correct answer basic whole
life policy; will typically have the lowest annual premium
Limited Payment - correct answer premiums for coverage paid-up before age
100; higher premium and cash value builds up faster; 20-pay life, life paid-up at 65
(LP-65);
Single Premium Whole Life (SPWL) - correct answer provides level death benefit
to the insured's age 100 for a one-time, lump-sum payment; policy completely
paid-up after one premium and generates immediate cash
Modified Life - correct answer lower premium in first few policy years (3 to 5
years) and higher level premium for remainder of insured's life
Graded-premium Whole Life - correct answer premiums start low, gradually
increase each year (for about 5 to 10 years), and remain level thereafter
Interest Sensitive Whole Life (Current Assumption Life) - correct 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
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