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