Indiana Life & Health Insurance Exam
Q&A 100% Pass | Graded A+
Participating Insurance Policy - ✔✔may pay dividends to the policyowner
Material Misrepresentation - ✔✔misstatement to a question asked in the
application process; death benefit claim will likely be denied
Law of Large Numbers - ✔✔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 - ✔✔results in higher premium
Standard Risk - ✔✔results in standard premium
Preferred Risk - ✔✔results in lower premium
Expense Loading - ✔✔combined with premiums to spread the operating
costs of a business to all insureds
Net Premium - ✔✔premiums without expense loading
1
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
,Concealment - ✔✔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 - ✔✔a statement guaranteed to be true
Representation - ✔✔a statement true to the best of an applicant's
knowledge
3 Basic Types of Term Life Insurance - ✔✔level, increasing, and
decreasing
Level Term - ✔✔death benefit doesn't change throughout the life of the
policy
Annually Renewable Term (ART) - ✔✔premium increases annually
according to attained age; policy may be guaranteed to be renewable each
without proof of insurability
Re-entry Option - ✔✔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 - ✔✔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
2
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
, Increasing Term - ✔✔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 - ✔✔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) - ✔✔basic whole life
policy; will typically have the lowest annual premium
Limited Payment - ✔✔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) - ✔✔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 - ✔✔lower premium in first few policy years (3 to 5 years) and
higher level premium for remainder of insured's life
3
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
Q&A 100% Pass | Graded A+
Participating Insurance Policy - ✔✔may pay dividends to the policyowner
Material Misrepresentation - ✔✔misstatement to a question asked in the
application process; death benefit claim will likely be denied
Law of Large Numbers - ✔✔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 - ✔✔results in higher premium
Standard Risk - ✔✔results in standard premium
Preferred Risk - ✔✔results in lower premium
Expense Loading - ✔✔combined with premiums to spread the operating
costs of a business to all insureds
Net Premium - ✔✔premiums without expense loading
1
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
,Concealment - ✔✔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 - ✔✔a statement guaranteed to be true
Representation - ✔✔a statement true to the best of an applicant's
knowledge
3 Basic Types of Term Life Insurance - ✔✔level, increasing, and
decreasing
Level Term - ✔✔death benefit doesn't change throughout the life of the
policy
Annually Renewable Term (ART) - ✔✔premium increases annually
according to attained age; policy may be guaranteed to be renewable each
without proof of insurability
Re-entry Option - ✔✔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 - ✔✔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
2
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
, Increasing Term - ✔✔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 - ✔✔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) - ✔✔basic whole life
policy; will typically have the lowest annual premium
Limited Payment - ✔✔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) - ✔✔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 - ✔✔lower premium in first few policy years (3 to 5 years) and
higher level premium for remainder of insured's life
3
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
