Indiana Life & Health Insurance Exam Review

Indiana Life & Health Insurance Exam Review An individual applies for a life policy. Two years ago he suffered a head injury from an accident, so he cannot remember parts of his past, but is otherwise competent. He has also been hospitalized for drug abuse, but does not remember this when applying for insurance. The insurer issues the policy and learn of his history one year later. What will probably happen? a) The policy will be voided b) The insurer will sue the insured for committing fraud c) Because the insured is currently not a drug user, his policy will not be affected d) The policy will not be affected d) The policy will not be affected A new insurance company wants to begin conducting insurance in Indiana. What will it need to receive before it can legally open for business? Certificate of Authority How many days after a final disposition must an insurance producer report administrative action or criminal prosecution to the Director? 30 days An insured pays $1,200 annually for her life insurance premium. The insured applies this year's $300 worth of accumulated dividends to the next year's premium, thus reducing it to $900. What option does this describe? Reduction of Premium Certain conditions, such as dismemberment or total and permanent blindness, will automatically qualify the insured for full disability benefits. Which disability policy provision does this describe? Presumptive disability Which of the following does the Insuring Clause NOT specify? a) The insurance company b) The name of the insured c) A list of available doctors d) Covered perils c) A list of available doctors How long is an open enrollment period for Medicare supplement policies? 6 months What is the maximum period that an insurer would pay benefits in accordance with an Additional Monthly Benefit rider? 1 year In which of the following locations would skilled care most likely be provided? In an institutional setting When transacting business in this state an insurer formed under the laws of another country is known as an: Alien insurer Which of the following is NOT an enrollment period for Medicare Part A applicants? a) Special enrollment b) General enrollment c) Automatic enrollment d) Initial enrollment Automatic enrollment Which type of life insurance policy generates immediate cash value? Single premium What characteristics must an annuity have if it is used to accumulate funds in an IRA? Tax-qualified All of the following are unfair claims settlement practices EXCEPT: a) Suggesting negotiations in settling the claim b) Refusing to pay claims without conducting a reasonable investigation c) Failing to adopt and implement reasonable standards for settling claims d) Failing to acknowledge pertinent communication pertaining to a claim a) Suggesting negotiations in settling the claim Why do group health providers usually require a certain amount of participation in the plan by eligible employees? To guard against adverse selection and reduce cost If an insurer becomes insolvent, which of the following would pay benefits to policyholders? The Guaranty Association A long-term care insurance shopper's guide must be provided in the format developed by which of the following? a) Director b) Medical Information Bureau c) NAIC d) Office of Insurance Regulation c) NAIC Which of the following best describes the MIB? It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance. If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a Guaranteed Insurability rider Prior to purchasing a Medigap policy, a person must be enrolled in which of the following? Parts A and B of Medicare Which of the following determines whether disability insurance benefits are taxed? Whether the premium were tax deductible To sign up for a Medicare prescription drug plan, individuals must first be enrolled in Medicare Part A When is the earliest a policy may go into effect? When the application is signed and a check is given to the agent All of the following are personal uses of life insurance EXCEPT: a) Estate creation b) Cash accumulation c) Buy-sell agreement d) Survivor c) Buy-sell agreement What type of beneficiary designation allows the benefit to pass from a deceased primary beneficiary to the beneficiary's heirs, instead of splitting the benefit among surviving primary beneficiaries? Per stirpes An insurance contract must contain all of the following to be considered legally binding EXCEPT: a) Competent parties b) Beneficiary's consent c) Offer and acceptance d) Consideration b) Beneficiary's consent To be eligible for a Health Savings Account, an individual must be covered by a High-deductible health plan What type of annuity guarantees to pay an income to the annuitant each year as longs he lives, and upon death, the annuity will refund the remaining payments to a beneficiary? Installment refund annuity The authority granted to an agent through the agent's contract is referred to as Express Authority An association could buy group insurance for its members if it meets all of the following EXCEPT: a) Has a constitution and by laws b) Holds annual meetings c) Is contributory d) Has at least 50 members d) Has at least 50 members A universal life insurance policy is best described as a/an Annually Renewable Term policy with a cash value account Which of the following statements regarding Business Overhead Expense policies is NOT true? a) Benefits are usually limited to six months