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Indiana Life Insurance EXAM
ACCURATE TESTED VERSIONS OF THE
EXAM FROM 2025 TO 2026 | ACCURATE
AND VERIFIED ANSWERS | NEXT GEN
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Which of the following provisions gurantees that premiums will be waived if a Juvenille Life policyowner becomes disabled? A. Family Maintenance clause B. Payor clause C. Assignment provision D. Automatic Premium Loan provision
- ANSWER B. Payor clause P died five years after purchasing a life policy. While investigating the claim, the insurer discovered material misrepresentations made by P during the application process. Which of these actions will the insurer take? A.Beneficiary will be denied the claim B. Beneficiary will be denied the claim and refunded all paid premiums C. Beneficiary will be paid the death benefit D. Beneficiary will be paid a partial benefit
- ANSWER C. Beneficiary will be paid the Death Benefit All of these statements concerning Settlement Options are true, EXCEPT: A. Increased proceeds can be provided through accumulation of interest B. Rapid depletion of proceeds can be avoided C. Proceeds can be administered by the insurance company D. Only the beneficiary may select
- ANSWER D. Only the beneficiary may select P is the insured on a participating life policy. Which statement is true if P's premiums are waived due to a disability? A. P cannot borrow against the policy's cash value while disabled B. P will have to pay income taxes on the amount of premiums waived C. P will receive declared dividends D. P cannot assign ownership of the policy while premiums are being waived - ANSWER C. P will receive declared dividends
D is the policyowner and insured for a $50,000 life insurance policy. The beneficiary is D's wife. D and his wife divorce and D remarries, transferring ownership of his policy to his new wife. If D dies without making any further changes, to whom will the policy proceeds be paid to? A. Ex-wife B. Current wife C. Estate D. Split equally between the ex-wife and current wife
- ANSWER A. Ex-wife T took out a $50,000 life insurance policy with an Accidental Death and Dismemberment rider. Five years later, T commits suicide. How much will the insurer pay? A. The total premiums paid minus policy loans B. Nothing C. 50, D. 100,
- ANSWER C. 50, Which life insurance rider typically appears on a Juvenile life insurance policy? A. Decreasing term rider B. Inflation Rider C. Payor Benefit rider D. Waiver of premium rider - ANSWER C. Payor Benefit rider P is blinded in an industrial accident. Which provision of his life insurance policy will pay a stated benefit amount? A. Accelerated Benefits provision B. Entire Contract C. Accindental Death and Dismemberment clause D. Consideration clause
- ANSWER C. Accidental Death and Dismemberment clause Which provision prevents an insurer from changing the terms of the contract with the policyowner by referring to documents not found within the policy itself? A. Policy Exclusion B. Inconstestable C. Entire Contract Provision D. Assignment
- ANSWER C. Entire Contract Provision Which of these are NOT an example of a Nonforfeiture option? A. Extended Term B. Reduced Paid-up
D. The face amount of a life policy paid on a monthly basis is higher than one paid on an annual basis.
- ANSWER A. The gross premium is higher on a monthly payment mode as a compared to being paid annually Which of the following statements is CORRECT regarding the tax treatment of a lumpsum payment paid to a life insurance policy's primary beneficiary? A. The proceeds which exceed the amount paid in premiums are taxable B. The proceeds are taxable only if the beneficiary's tax bracket has changed from the payout C. All proceeds are considered taxable income in the year they are received D. All proceeds are income tax free in the year they are received
- ANSWER D. All proceeds are income tax free in the year they are received T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary? A. Request will be accepted only if in writing by the insured B. Change will be made only if premiums are paid current C. Change will be made immediately D. Request of the change will be refused
- ANSWER D. Request of the change will be refused A primary beneficiary has died before the insured in a life insurance policy. A contingent beneficiary is also named in the policy. Which of the following will occur when the insured dies? A. Proceeds will go to the primary beneficiary's estate B. Probabte will decide who receives proceeds C. Proceeds will go to the contingent beneficiary D. Proceeds will go to the insured's estate
- ANSWER C. Proceeds will go to the contingent beneficiary Quarterly premium payments increase the annual cost of insurance because A. Insurer risk exposure is greater B. Interest to the insurer is increased while admisistrative costs are decreased C. Mortality costs are greater D. Interest to the insurer is decreased while the administrative costs are increased - ANSWER D. Interest to the insurer is decreased while the administrative costs are increased C is trying to determine whether to convert her convertible term life policy to whole life insurance using her original age or attained age. What factor would affect her decision the most? A. The cost B. The nonforfeiture options
C. The contestable period D. The assignment of ownership
- ANSWER A. The cost T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive? A. 1,000, B. 500, C. 250, D. 0
- ANSWER D. 0 A policyowner is allowed to pay premiums more than once a year under which provision? A. Insuring B. Consideration C. Payor D. Mode of premium
- ANSWER D. Mode of premium Which provision allows the policyowner to change a term life policy to a permanent one without providing proof of good health? A. Modification B. Conversion C. Exchange D. Adjustable
- ANSWER B. Conversion Which of the following Nonforfeiture options offers the highest death benefit? A. Cash surrender B. Reduced Paid-up C. Extended term D. Dividend
- ANSWER C. Extended term The provision that can be used to put an insurance policy back in force after it has lapsed due to nonpayment is called: A. Reinstatement B. Grace period C. Automatic premium loan D. Waiver of premium
- ANSWER A. Reinstatement
A. Waived one of its legal rights B. Issued a voidable policy C. Commited an act of fraud D. Assigned the risk to a reinsurer
- ANSWER A. Waived one of its legal rights All are true statements regarding the underwriting process, EXCEPT: A. Signed consent from the applicant must be provided in order to test for AIDS and HIV virus B. AIDS and HIV virus exams can be conducted in a discriminatory fashion C. The cost of any examination is paid for by the insurer D. The original application is the primary source of information used in the underwriting process
- ANSWER B. AIDS and HIV virus exams can be conducted in a discriminatory fashion K is an agent who takes an application for individual life insurance and accepts a check from the client. He submits the application and check to the insurance company, however the check was never signed by the applicant. If the application is approved, when will coverage be effective? A. The date the sales appointment was made B. The date the application was submitted to the insurance company C. The date of the application D. The date the agent delivered the policy, collected the initial premium, and obtained a good health statement from the insured
- ANSWER D. The date the agent delivered the policy, collected the initial premium, and obtained a good health statement from the insured Life insurance companies are required to establish and maintain an anti-money laundering compliance program according to which federal regulation? A. Federal Reserve Act B. USA Patriot Act C. Fair Credit Reporting Act D. Dodd-Frank Act - ANSWER USA Patriot Act P is a producer who notices 5 questions on a life application were not answered. What actions should P take? A. Mail incomplete application to applicant to be completed and returned to the agent. B. Submit the application as-is to the insurer C. Call the applicant and complete application over the phone. D. Set up a meeting with the applicant to answer the remaining questions - ANSWER D. Set up a meeting with the applicant to answer the remaining questions When a policyowner cash surrenders a Universal Life insurance policy in it's early years, this may be considered a red flag for a(n) A. Federal Fair Credit Act Violation
B. Title 18 Fraud violation C. Anti-money Laundering violation D. Unfair Trade Practice violation - ANSWER C. Anti-money Laundering violation Under the USA Patriot Act, insurers are required to report receipt of cash payments in excess of A. $10, B. $7, C. $5, D. $2,500 - ANSWER A. $10, A life insurance application may be rejected on the basis of all these factors EXCEPT A. Medical History B. Hobbies C. Gender D. Weight - ANSWER C. Gender M completes an application for life insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect EXCEPT A. Policy is delivered B. Free-look period has expired C. Insurance company issues policy D. Initial premium is collected - ANSWER B. Free-look period has expired Which of these actions should a producer take when submitting an insurance application to an insurer? A. Issue a binding receipt to applicant if no intial premium is submitted. B, Disclose to the applicant the amount of commissions to be earned on this transaction C. Inform insurer of relevant information not included on the application D. Arrange for a copy of the Attending Physician Statement (APS) to be sent to the producer - ANSWER C. Inform insurer of relevant information not included on the application On August 6, D submitted an application for a 50,000 Life Insurance policy and did not pay the intial premium. On August 18, D went to his doctor complaining of chest pains and some tests were given by the doctor. The life policy was delivered by rhe producer on August 20 and D explains what had recently taken place with the doctor. What action should the producer then take? A. Collect initial Premium B. Collect initial premium along with signed health statement C. Explain to the applicant the policy is longer in effect due to change in health condition D. Collect initial premium and leave a binding receipt - ANSWER B. Collect initial premium along with signed health statement
B. The entire premium paid in a year C. Half the premium paid in a year D. Nothing - ANSWER D. Nothing A non-contributory plan requires _____ participation of all elgible employees A. 25% B. 50% C. 75% D. 100% - ANSWER D. 100% When an employee is terminated, which statement about a group term life conversion is true? A. Employee must convert group term life coverage into an individual term life policy B. Employee must provide evidence of insurability for conversion C. Policy proceeds will be paid if the employee dies during the conversion period D. Policy proceeds will NOT be paid if the employee during the conversion period. - ANSWER C. Policy proceeds will be paid if the employee dies during the conversion period S recently received a $500,000 lump sum retirement buyout from her employer. She would like to buy an annuity that will immediately furnish her with a guaranteed income for life. What type of annuity is best suited for her situation? A. 403(b) Plan B. Deferred Premium C. Single Premium D. Period Certain - ANSWER C. Single Premium K is an annuitant currently receiving payments. If she were to die before receiving payments equal to the correct value, a beneficiary will continue receiving payments until an amount equal to the contract value has been paid. This is called a(n) A. Installment Refund annuity B. Joint Refund annuity C. Straight Refund annuity D. Equal Value annuity - ANSWER A. Installment Refund annuity T has an annuity that guarantees an income payment for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this? A. Fixed Certain B. Joint and Full Survivor C. Life Annuity with period certain D. Installment Refund - ANSWER C. Life Annuity with period certain The type of annuity that must be purchased with one monetary deposit is called a(n):
A. Single Deposit annuity B. Variable annuity C. Fixed annuity D. Immediate annuity - ANSWER D. Immediate annuity P, age 50, purchased an annuity that P will fund with $500/ month for 15 years. The annuity will then pay P retirement payments after the 15 years. Which type of annuity did P purchase? A. Immediate B. Retroactive C. Deferred D. Universal - ANSWER C. Deferred All of the following statements regarding a Tax Sheltered Annuity (TSA) are true EXCEPT A. Income derived from the TSA is received income tax-free B. TSA's are availble to public school employees C. Contributions to the TSA are tax-deductible D. Interest earned by TSA is tax deferred - ANSWER A. Income derived from the TSA is received income tax-free A(n) _ annuity pays benefits based on units rather than stated dollar amounts. A. Deferred B. Variable C. Immediate D. Unit - ANSWER B. Variable What determines the full amount of Social Security retirement benefits a qualified indivual is entitled to receive? A. Primary Insurance Amount (PIA) B. Total taxes paid into FICA C. Number of dependents D. State of residence - ANSWER A. Primary Insurance Amount (PIA) The amount of monthly disability benefits payable under Social Security is affected by which of the following factors A. Insured's tax bracket B. Amount of the benefits availble from other sources C. Nature of the disability D. Insured's education level - ANSWER B. Amount of the benefits availble from other sources Which of these is NOT a source of funding for Soical Security benefits? A. Self employed individuals B. Employess C. Federal Government
D. Distribution is subject to federal income tax withholding - ANSWER D. Distribution is subject to federal income tax withholding Rick recently died and left behind an individual IRA account in his name. His widow was forwarded the balance of the IRA. The widow qualifies for the A. Marital deduction B. Death benefits C. Section 1035 exchange D. captal gains tax rate - ANSWER A. Marital deduction What type of employess welfare plans are not subject to ERISA regulations? A. Church plans B. Major medical plans C. Corporate D. Qualified plans - ANSWER A. Church plans At the age of 45, an indiviual withdraws $50,000 from his qualified profit-sharing plan and then deposits this amount into a personal savings account. This action would result in A. Only income tax on the amount withdrawn B. Income tax a 10% penalty assessed upon funds withdrawn from the qualified plan C. Continued tax-free accumulations in the bank savings account D. Only a 10% penalty on the withdrawal of funds - ANSWER B. Income tax a 10% penalty assessed upon funds withdrawn from the qualified plan Premature IRA distributions are assessed a penalty tax of A. 0% B. 10% C. 15% D. 20% - ANSWER B. 10% A retirement plan that sets aside part of the company's net income for distributions to qualified employees is called a A. Rollover plan B. 403(b) plan C. profit-sharing plan D. salary reduction plan - ANSWER C. profit-sharing plan How are Roth IRA distributions normally taxed? A. 10% penalty tax is applied B. Taxed as ordinary income C. Capital gains tax is applied D. Distributions are received tax-free - ANSWER D. Distributions are received tax-free
An IRA owner can start making withdrawals and NOT be subjected to a tax penalty beginning at what age? A. 70 1/ B. 65 C. 55 D. 59 1/2 - ANSWER D. 59 1/ Three law partners form a Cross-Purchase Buy and Sell agreement. This agreement is funded with individual life insurance. How many total life policies are needed for this agreement? A. 12 B. 6 C. 3 D. 1 - ANSWER B. 6 Which of these is NOT relevant when determining the amount of personal life insurance needed? A. Existing life insurance coverage B. Local unemployment rate C. Household income D. Household debt - ANSWER B. Local unemployment rate When an individual is planning to protect his family with life insurance, one method of doing so is called needs analysis. What exactly does needs analysis involve? A. Establishes the needs of the individual and his dependents B. Takes into account the present value of the future income earned by the breadwinner C. Places a dollar value on the life of the individual D. Establishes the investment risk level acceptable to the individual - ANSWER A. Establishes the needs of the individual and his dependents Which statement regarding a key employee life policy is NOT true? A. The application must be signed by the key employee B. Its purpose is to prevent the financial loss that may ensue if a key employee dies C. The beneficiary is named by the key employee D. The company purchases, owns, pays the premiums and is the beneficiary - ANSWER C. The beneficiary is named by the key employee Company Z has a Cross Purchase Buy-Sell Agreement in place among its three founding partners. If the agreement is funded with individual life insurance, what would it require? A. One policy is owned and paid for the company B. Each partner must own a policy on the other partners C. One policy is owned by the company and premiums are split equally among the partners
An insurance company that has qualified and received a Certificate of Authority from the Department of Insurance to sell insurance in this state is considered to e a(n) BLANK insurer A. Reciprocal B. Accepted C. Domestic D. Admitted - ANSWER D. Admitted At the very least, an admitted insurance company shall be examined once ever ___ years A. 2 B. 3 C. 4 D. 5 - ANSWER D. 5 Which of the following statements is correct about the Insurance Commissioner's authority to examine the business records of a producer? A. The Commisioner has no authority to examine them B. The Commissioner may examine them whenever it's deemed necessary C. The Commissioner must examine them at least twice every five years D. The Commissioner must examine them at least twice every three years - ANSWER B. The Commissioner may examine them whenever it's deemed necessary J owns a business and offers a Group Life policy covering her employees. J decides to cancel the policy by letting it lapse on the renewal date. What action must be taken? A. J must cover the group with another policy at cancellation B. All the employees must be notified of the cancellation either by the insurance company or through J C. The insurance company must replace the existing policy with one to J's liking D. No obligation is required from the insurance company nor J - ANSWER B. All the employees must be notified of the cancellation either by the insurance company or through J Which of the following provides funding for the Indiana Life and Health Insurance Guaranty Association? A. NAIC B. Department of Insurance C. Revenue bonds D. Member company assessments - ANSWER D. Member company assessments Which of the following is NOT considered rebating? A. Sharing commissions with a producer licensed in the same line of business B. Returning premium to a client as an inducement for purchasing a policy C. Giving something of value to an insured in exchange for their business D. Offering special dividends - ANSWER A. Sharing commissions with a producer licensed in the same line of business
When a life insurance policy application is completed, a Policy Summary must be given to the applicant. The Policy Summary MUST include A. the insurer's AM Best rating B. the producer's address C. Cash value rate D. the premium cost for basic coverage applied for - ANSWER D. the premium cost for basic coverage applied for T is an employee covered under a Group Life policy. If T's employment is terminated, the conversion privilege gives T the right to convert A. to an individual policy, only by providing evidence of insurability B. to an individual policy. only if the employer pays the premiums C. to an individual policy, upon employment termination D. to an individual policy with a higher amount of coverage - ANSWER C. to an individual policy, upon employment termination What is Indian's definition of Life insurance replacement? A. A transaction in which coverage on an existing policy is increased B. A transaction in which group life coverage is converted to an indiviual policy C. A transaction in which a new policy is bought and an old policy is terminated D. A transaction in which a policyowner reinstates a lapsed policy - ANSWER C. A transaction in which a new policy is bought and an old policy is terminated Why would the Insurance Commissioner issue a temporary license? A. To allow a person who failed the state exam to conduct insurance business B. To allow a nonresident producer to conduct a business in Indiana C. To allow the personal representative of a deceased producer to provide service to existing policyowners D. To allow producer to sell for an unauthorized insurer - ANSWER C. To allow the personal representative of a deceased producer to provide service to existing policyowners An applicant for a resident insurance producer's license MUST meet which of the following requirements? A. Have at least thirty college credits in insurance-related courses B. Compete a prelicensing examination C. Submit a minimum of two insurance company appointments to the insurance Commissioner D. Be resident of this state for a minimum of one year - ANSWER B. Compete a prelicensing examination Which of the following statements is CORRECT about the Indiana Life and Health Inusrance Guaranty Association?
D. An insurer advertising in an insurance trade journal - ANSWER B. An insurer exaggerating its dividends in a magazine advertisement Which of the following is an example of false advertisting? A. An insurer advertising in an insurance trade journal B. An insurance company publishing misleading information about its policy's provisions C. A producer spending more that $25 on marketing gifts for a client D. Paid testimonials from celebrity endorsements - ANSWER B. An insurance company publishing misleading information about its policy's provisions At what point may a producer sell insurance for an insurer? A. After taking the license exam B. After completing a prelicensing course C. After being properly appointed by the insurer D. After meeting the insurer's production requirements - ANSWER C. After being properly appointed by the insurer If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds to be directed under the Uniform Simultaneous Death Act? A. Primary beneficiary's estate B. Primary benficiary's next of kin C. Insured's estate D. Insured's contingent beneficiary - ANSWER D. Insured's contingent beneficiary Which premium schedule results in the lowest cost to the policyowner? A. Semi-annual B. Monthly C. Quarterly D. Annual - ANSWER D. Annual Which of the following is an example of twisting? A. A producer maliciously aligns another insurance company's financial status B. A producer misrepresents a policy to induce a policyowner to surrender an excisting policy C. A producer reduces the commission in order to sell a policy D. A producer induces a policyowner with something of value to purchase a policy - ANSWER N is a student pilot with a large life insurance policy. Which of these features would limit the insurer's obligation in the event N was killed while flying as a student pilot? A. Misrepresentation B. Exclusion C. Collateral Assignment
D. Concealment - ANSWER B. Exclusion An existing life insurance policy is being replaced by a new one. A notice of replacement must be provided by the ________ to be signed by the applicant. A. Beneficiary B. Insurer C. Producer D. Proctor - ANSWER C. Producer An example of unfair discrimination would be A. Declining an insurance application because of involvement in a hazardous occupation B. Offering the ame terms of coverage to different policyowners in the same risk classification C. Offering different terms of coverage for different policyowners having the same risk classification D. issuing a policy at a substandard rate of poor health - ANSWER C. Offering different terms of coverage for different policyowners having the same risk classification Which of these provisions is NOT required in individual life insurance policies sold in Indiana? A. Free Look B. Grace Period C. Extended Term D. Entire Contract - ANSWER C. Extended Term B the producer sold an insurance contract to a client. B has engaged in A. an unfair competition practice B. Transacting insurance C. underwriting insurance D. Meeting a sales quota - ANSWER B. Transacting insurance Which statement regarding the Change of Beneficiary provision is true A. The beneficiary can only be changed with the consent of the insurer B. The policyowner can change the beneficiary C. The insured can change the beneficiary D. A beneficiary change is subject to underwriting procedures - ANSWER B. The policyowner can change the beneficiary S is a life insurance policyowner and enters into a written agreement to receive immediate cash in exchange for the sale and transfer of her life insurance policy. This agreement is referred to as a(n) A. 1035 Exchange B. Viatical Settlement
