Indiana Insurance License Exam Study Guide | Practice
Questions & Answers | Graded A+
1. Which of the following statements accurately describes the tax treatment of
employer contributions to tax-qualified annuities?
Employer contributions are tax deductible
Employer contributions are fully taxable
Employer contributions are subject to income tax
Employer contributions are not tax deductible
2. What does the relation of earnings to insurance provision allow the insurance
company to limit?
The coverage period
The insured's benefits
The insurer's liabilities
The policyholder's premiums
3. Which type of information is typically found in the General Information
section of an insurance application?
Employment history
Medical background
Personal information
Insurance history
,4. James has Medicare Part A and is hospitalized for five days as the result of an
auto accident. He has never drawn any Medicare benefits in the past. Which
of the following will occur?
Medicare will not cover his hospitalization because he was not
hospitalized for seven consecutive days.
Medicare will pay 100 percent of all covered charges after James
pays the deductible.
James' Medicare Supplement will pay first; then Medicare will pay 100
percent of remaining covered charges.
Medicare will cover 80 percent of the hospital bill.
5. All the following statements regarding risk classification are correct,
EXCEPT...
Substandard risks are never declined coverage
Policies may be issued to substandard risks by attaching an exclusion
or waiver
Substandard risks have higher premiums than standard risks
Risk can be rated as a substandard due to high risk occupation
6. What is the coinsurance arrangement that requires Ray to pay 50% of the
costs?
50/50
70/30
80/20
60/40
,7. Which parts of Medicare must a person be enrolled in before buying a
Medigap policy?
Only Part A of Medicare
Part C of Medicare
Parts A and B of Medicare
Part D of Medicare
8. Which answer below describes the tax characteristics of a non-qualified
annuity?
Contributions are not deductible and tax-deferred growth of
earnings
Contribution are not deductible; earnings are taxed each year
Tax-Deductible contributions and tax-deferred growth
Tax deductible contributions only
9. What is one example of a qualifying event under COBRA?
Change in health insurance provider
Termination of employment due to downsizing
Moving to a different state
Increase in insurance premiums
10. If a patient is hospitalized for 100 days, how would Medicare Part A coverage
apply after the first 90 days?
The patient would pay a reduced rate for the additional 10 days.
Medicare Part A would cover 100% of the first 90 days, and then the
patient would be responsible for all costs after that.
, Medicare Part A would cover 80% of the costs after the first 90 days.
Medicare Part A would continue to cover all costs beyond 90 days.
11. Describe how copayments differ from coinsurance in health insurance
policies.
Copayments are fixed amounts paid for services, while coinsurance
is a percentage of the total cost.
Copayments are based on income, while coinsurance is a flat fee.
Copayments are paid annually, while coinsurance is paid monthly.
Copayments apply only to prescription drugs, while coinsurance
applies to all services.
12. If a policyholder wants to adjust their premium payments and invest in
different funds based on market performance, which type of insurance
policy would best suit their needs?
Whole Life Policy
Universal Life Policy
Term Life Policy
Variable Universal Life Policy
13. EXCEPT for fraud, the time after issuance of a policy during which an
insurance company may contest a health insurance claim due to the
statements on an application is
2 years
90 days
10 days
Questions & Answers | Graded A+
1. Which of the following statements accurately describes the tax treatment of
employer contributions to tax-qualified annuities?
Employer contributions are tax deductible
Employer contributions are fully taxable
Employer contributions are subject to income tax
Employer contributions are not tax deductible
2. What does the relation of earnings to insurance provision allow the insurance
company to limit?
The coverage period
The insured's benefits
The insurer's liabilities
The policyholder's premiums
3. Which type of information is typically found in the General Information
section of an insurance application?
Employment history
Medical background
Personal information
Insurance history
,4. James has Medicare Part A and is hospitalized for five days as the result of an
auto accident. He has never drawn any Medicare benefits in the past. Which
of the following will occur?
Medicare will not cover his hospitalization because he was not
hospitalized for seven consecutive days.
Medicare will pay 100 percent of all covered charges after James
pays the deductible.
James' Medicare Supplement will pay first; then Medicare will pay 100
percent of remaining covered charges.
Medicare will cover 80 percent of the hospital bill.
5. All the following statements regarding risk classification are correct,
EXCEPT...
Substandard risks are never declined coverage
Policies may be issued to substandard risks by attaching an exclusion
or waiver
Substandard risks have higher premiums than standard risks
Risk can be rated as a substandard due to high risk occupation
6. What is the coinsurance arrangement that requires Ray to pay 50% of the
costs?
50/50
70/30
80/20
60/40
,7. Which parts of Medicare must a person be enrolled in before buying a
Medigap policy?
Only Part A of Medicare
Part C of Medicare
Parts A and B of Medicare
Part D of Medicare
8. Which answer below describes the tax characteristics of a non-qualified
annuity?
Contributions are not deductible and tax-deferred growth of
earnings
Contribution are not deductible; earnings are taxed each year
Tax-Deductible contributions and tax-deferred growth
Tax deductible contributions only
9. What is one example of a qualifying event under COBRA?
Change in health insurance provider
Termination of employment due to downsizing
Moving to a different state
Increase in insurance premiums
10. If a patient is hospitalized for 100 days, how would Medicare Part A coverage
apply after the first 90 days?
The patient would pay a reduced rate for the additional 10 days.
Medicare Part A would cover 100% of the first 90 days, and then the
patient would be responsible for all costs after that.
, Medicare Part A would cover 80% of the costs after the first 90 days.
Medicare Part A would continue to cover all costs beyond 90 days.
11. Describe how copayments differ from coinsurance in health insurance
policies.
Copayments are fixed amounts paid for services, while coinsurance
is a percentage of the total cost.
Copayments are based on income, while coinsurance is a flat fee.
Copayments are paid annually, while coinsurance is paid monthly.
Copayments apply only to prescription drugs, while coinsurance
applies to all services.
12. If a policyholder wants to adjust their premium payments and invest in
different funds based on market performance, which type of insurance
policy would best suit their needs?
Whole Life Policy
Universal Life Policy
Term Life Policy
Variable Universal Life Policy
13. EXCEPT for fraud, the time after issuance of a policy during which an
insurance company may contest a health insurance claim due to the
statements on an application is
2 years
90 days
10 days
