Indiana Life License Exam
1. Must be a large number of similar risks to pool and share
2. Must be measurable (a definite value must be placed on the loss
3. Must be uncertain (loss due to chance)
4. Must cause economic hardship (the loss must be significant)
5. Cannot be catastrophic (the loss cannot be too great to insure against) - ANS-To be insurable
you must have (5 things)
20 days. - ANS-How Long is the Replacement Free Look Period?
a basic principle of insurance - ANS-Transferring risk is
A beneficiary designation in which the policy-owner may NOT change the beneficiary, NOR
surrender the policy, take out a policy loan or exercise other policy features without the consent
of this beneficiary. - ANS-Irrevocable
A beneficiary designation that may be changed - Without the consent of the beneficiary. -
ANS-Revocable
A combination of whole life on the primary (breadwinner) and term insurance on the spouse
and/or children.
Children are covered with convertible term insurance which may be converted to an individual
whole life policy at a predetermined age without proof of insurability.
Newborn children are automatically covered (either at birth or up to two weeks after birth
depending on the company) with no proof of insurability and no increase in premium. Adopted
children are also covered from the date of the adoption with no increase in premiums. -
ANS-Family (Protection) Policy
A company that originates in any country other than the US. - ANS-Alien (Insurance
Companies)
A company that originates in any state other than the state you are doing business. -
ANS-Foreign (Insurance Companies)
A company that originates within the state. - ANS-Domestic (Insurance Companies)
A contract is a legally binding agreement between two or more legally competent parties to form
a valid contract. - ANS-Legal Contracts
A form required by law that the agent must verify that he has given the applicant. It authorizes
the insurer to obtain medical and, credit information and also information from investigative
,agencies. The agent must verify by signature that the disclosure form was given to the client. -
ANS-Disclosure Statements
A group CANNOT exist for the sole purpose of purchasing insurance.
Groups created to purchase cheap insurance would present higher risks. - ANS-Purpose of the
Group (Group Underwriting)
A lump sum payment.
Default option on most policies. - ANS-Cash (Settlement)
A period of time (usually 30 or 31 days) after the premium is due during which a policy remains
in force; if death occurs during the grace period, the death benefit will be paid minus the
overdue premium and any interest due. - ANS-Grace Period Clause
A reduction in the quantity or value of something - ANS-Loss
A statement believed to be true to the best of one's knowledge - ANS-Representations
A statement guaranteed to be true (the absolute truth) - ANS-Warranties
All employees and members within the group must be eligible for coverage.
No one can be picked out from the group and denied coverage. - ANS-No Discrimination (Group
Underwriting)
Allows self-employed individuals, partnerships and un-incorporated individuals to establish tax
favored retirement accounts.
All employees who are 21 years and older, who have worked for one year or more, and work at
least 1000 hours a year must be covered.
Contributions grow tax deferred. - ANS-Keogh (HR-10) Plans
An agreement that states that if one business partner dies, the remaining partner(s) have the
right to buy the deceased partner's share at a specified price.
This agreement can keep a company running by providing needed cash when a partner dies. -
ANS-Buy and Sell Agreement
An applicant who is of standard risk; does not require additional premium to cover risk; most
people fall into this category. - ANS-Standard Risk
An applicant whose health and lifestyle indicate a longer life span; charged lowest rates. -
ANS-Preferred Risk
An applicant whose risk is below the standard or average risk; pays higher premium. -
ANS-Substandard (Rated) Risk
, An authorized transfer of ownership of a policy or its benefits from the policy-holder to another
person; this can be temporary as in a collateral assignment or permanent as in an absolute
assignment. - ANS-Assignment Clause
An employee makes contributions through qualified salary deduction.
Employer contribution may be dollar for dollar match of deduction (up to 3%) for non-elective
2% contribution to each eligible employee.
All contributions are nonforfeitable and vested immediately. There is a 25% premature
distribution penalty on withdrawals made during the first 2 years of participation. - ANS-Savings
Incentive Match Plan for Employees (SIMPLE)
An employer sponsored IRA.
The employer makes the contributions.
Employer's contributions are not taxable and are capped at 25% of employee compensation. -
ANS-Simplified Employee Pensions (SEPs)
An insurance company is prohibited from paying less than the amount of the death benefit,
except in the case of outstanding loans.
If the company has not started payment of the death benefits within the 30 days, the company
must begin paying interest at a specified rate. - ANS-Methods of Settlement
An insurer can request an attending Physician statement in addition to the medical exam. This
concerns the details of the insured's medical history - ANS-Medical Exams and History
An offer, followed by an acceptance. The application and initial premium, if collected from the
proposed insured is the offer, and the insurance company approving the application and issuing
a policy is the acceptance. - ANS-Agreement (Offer and Acceptance)
Annual, Semi-annual, Quarterly, and Monthly
The rate for annual is the least expensive and the monthly is the most expensive due to
administrative costs for billing and premium application. - ANS-Four Premium Modes
Any communications to the public, broadcast, telecast, written or spoken. - ANS-Advertising
Any outstanding loans and interest would be subtracted from the cash value.
A policy surrendered for cash CANNOT be reinstated. - ANS-Cash Surrender Value
Any withdrawals or loans taken from a modified Endowment policy are taken as taxable dollars
first and then return of premiums (already taxed).
There is a 10% tax penalty in addition to any taxes due on withdrawals made prior to age 59
1/2. - ANS-Seven Pay Test (Continue)
Anyone who solicits, negotiates or sells contracts of insurance.
1. Must be a large number of similar risks to pool and share
2. Must be measurable (a definite value must be placed on the loss
3. Must be uncertain (loss due to chance)
4. Must cause economic hardship (the loss must be significant)
5. Cannot be catastrophic (the loss cannot be too great to insure against) - ANS-To be insurable
you must have (5 things)
20 days. - ANS-How Long is the Replacement Free Look Period?
a basic principle of insurance - ANS-Transferring risk is
A beneficiary designation in which the policy-owner may NOT change the beneficiary, NOR
surrender the policy, take out a policy loan or exercise other policy features without the consent
of this beneficiary. - ANS-Irrevocable
A beneficiary designation that may be changed - Without the consent of the beneficiary. -
ANS-Revocable
A combination of whole life on the primary (breadwinner) and term insurance on the spouse
and/or children.
Children are covered with convertible term insurance which may be converted to an individual
whole life policy at a predetermined age without proof of insurability.
Newborn children are automatically covered (either at birth or up to two weeks after birth
depending on the company) with no proof of insurability and no increase in premium. Adopted
children are also covered from the date of the adoption with no increase in premiums. -
ANS-Family (Protection) Policy
A company that originates in any country other than the US. - ANS-Alien (Insurance
Companies)
A company that originates in any state other than the state you are doing business. -
ANS-Foreign (Insurance Companies)
A company that originates within the state. - ANS-Domestic (Insurance Companies)
A contract is a legally binding agreement between two or more legally competent parties to form
a valid contract. - ANS-Legal Contracts
A form required by law that the agent must verify that he has given the applicant. It authorizes
the insurer to obtain medical and, credit information and also information from investigative
,agencies. The agent must verify by signature that the disclosure form was given to the client. -
ANS-Disclosure Statements
A group CANNOT exist for the sole purpose of purchasing insurance.
Groups created to purchase cheap insurance would present higher risks. - ANS-Purpose of the
Group (Group Underwriting)
A lump sum payment.
Default option on most policies. - ANS-Cash (Settlement)
A period of time (usually 30 or 31 days) after the premium is due during which a policy remains
in force; if death occurs during the grace period, the death benefit will be paid minus the
overdue premium and any interest due. - ANS-Grace Period Clause
A reduction in the quantity or value of something - ANS-Loss
A statement believed to be true to the best of one's knowledge - ANS-Representations
A statement guaranteed to be true (the absolute truth) - ANS-Warranties
All employees and members within the group must be eligible for coverage.
No one can be picked out from the group and denied coverage. - ANS-No Discrimination (Group
Underwriting)
Allows self-employed individuals, partnerships and un-incorporated individuals to establish tax
favored retirement accounts.
All employees who are 21 years and older, who have worked for one year or more, and work at
least 1000 hours a year must be covered.
Contributions grow tax deferred. - ANS-Keogh (HR-10) Plans
An agreement that states that if one business partner dies, the remaining partner(s) have the
right to buy the deceased partner's share at a specified price.
This agreement can keep a company running by providing needed cash when a partner dies. -
ANS-Buy and Sell Agreement
An applicant who is of standard risk; does not require additional premium to cover risk; most
people fall into this category. - ANS-Standard Risk
An applicant whose health and lifestyle indicate a longer life span; charged lowest rates. -
ANS-Preferred Risk
An applicant whose risk is below the standard or average risk; pays higher premium. -
ANS-Substandard (Rated) Risk
, An authorized transfer of ownership of a policy or its benefits from the policy-holder to another
person; this can be temporary as in a collateral assignment or permanent as in an absolute
assignment. - ANS-Assignment Clause
An employee makes contributions through qualified salary deduction.
Employer contribution may be dollar for dollar match of deduction (up to 3%) for non-elective
2% contribution to each eligible employee.
All contributions are nonforfeitable and vested immediately. There is a 25% premature
distribution penalty on withdrawals made during the first 2 years of participation. - ANS-Savings
Incentive Match Plan for Employees (SIMPLE)
An employer sponsored IRA.
The employer makes the contributions.
Employer's contributions are not taxable and are capped at 25% of employee compensation. -
ANS-Simplified Employee Pensions (SEPs)
An insurance company is prohibited from paying less than the amount of the death benefit,
except in the case of outstanding loans.
If the company has not started payment of the death benefits within the 30 days, the company
must begin paying interest at a specified rate. - ANS-Methods of Settlement
An insurer can request an attending Physician statement in addition to the medical exam. This
concerns the details of the insured's medical history - ANS-Medical Exams and History
An offer, followed by an acceptance. The application and initial premium, if collected from the
proposed insured is the offer, and the insurance company approving the application and issuing
a policy is the acceptance. - ANS-Agreement (Offer and Acceptance)
Annual, Semi-annual, Quarterly, and Monthly
The rate for annual is the least expensive and the monthly is the most expensive due to
administrative costs for billing and premium application. - ANS-Four Premium Modes
Any communications to the public, broadcast, telecast, written or spoken. - ANS-Advertising
Any outstanding loans and interest would be subtracted from the cash value.
A policy surrendered for cash CANNOT be reinstated. - ANS-Cash Surrender Value
Any withdrawals or loans taken from a modified Endowment policy are taken as taxable dollars
first and then return of premiums (already taxed).
There is a 10% tax penalty in addition to any taxes due on withdrawals made prior to age 59
1/2. - ANS-Seven Pay Test (Continue)
Anyone who solicits, negotiates or sells contracts of insurance.
