Indiana Life & Health Insurance Exam
- ANS-
- ANS-Straight Life
a statement guaranteed to be true - ANS-Warranty
a statement true to the best of an applicant's knowledge - ANS-Representation
allows policy owner a specified number of days from receipt to look over the policy and if
dissatisfied for any reason, return it for a full refund of premium; starts when policy owner
receives policy - ANS-Right to Examine (Free Look)
allows the contract holder, in the event that interest rates drop a specified amount within a
specified time frame, to surrender the contract without charge - ANS-Bail-Out Provision
(Annuity)
amount of each payment received from the annuity during the annuity period - ANS-Level
Benefit Payment Amount
amount of premium paid or cash value accumulated; frequency of payment; interest rate;
annuitant's age and gender - ANS-Annuity Income Amount Based On
annuitant selects how much each payment will be, and the insurer determines how long the
benefits will be paid by analyzing the value of the account and future earnings; pays a specific
amount until funds are exhausted, whether or not the annuitant is living - ANS-Fixed Amount
Installments
annuitant selects the time period for the benefits, and insurer determines how much each
payment will be, based on the value of the account and future earnings projections; pays for a
specified amount of time only, whether or not the annuitant is living - ANS-Fixed-Period
Installments
annuity is purchased with multiple payments that can vary from year to year (e.g. portion of
each paycheck), and the benefit payments begin sometime after one year from the date of
purchase (e.g. payouts start at age 65) - ANS-Flexible Premium Deferred Annuity (FPDAs)
annuity is purchased with single payment, but benefit isn't paid until after one year or more has
elapsed - ANS-Single Premium Deferred Annuities (SPDAs)
, annuity payments are guaranteed for the lifetime of the annuitant and for a specified period time
for the beneficiary - ANS-Life with Period Certain
any life insurance policy that fails a 7-pay test; loses the standard tax benefits of a lifer
insurance contract; death benefit received by the beneficiary is tax free; cash value:
tax-deferred accumulations; any distributions are taxable, including withdrawals and policy
loans; distributions are taxed are taxed on LIFO basis - known as "interest-first" rule;
distributions before age 59 1/2 are subject to a 10% penalty - ANS-Modified Endowment
Contract (MEC)
any life insurance written on the life of a minor; "jumping juvenile" is a common type where the
face amount increases at a predetermined age, often age 21; premium remains level throughout
- ANS-Juvenile Life
basic whole life policy; will typically have the lowest annual premium - ANS-Continuous
Premium (Straight Life or Ordinary Life)
business continuation agreement that determines what will be done with the business in the
event that an owner dies or becomes disabled - ANS-Buy-Sell Agreement
cash value is dependent upon the performance of the equity index (S&P 500) although there is
a guaranteed minimum interest rate; policy's face amount increases annually to keep pace with
inflation - ANS-Equity-Indexed Whole Life
cash values accumulate based upon a specific portfolio of stocks without guarantees of
performance; keep pace with inflation, and are determined by the value of securities backing it -
ANS-Variable Life Insurance and Annuities
charge a level annual premium for the lifetime of the insured and provide a level, guaranteed
death benefit - ANS-Straight Life
combined with premiums to spread the operating costs of a business to all insureds -
ANS-Expense Loading
combines whole life with term insurance to cover family members in a single policy; whole life on
breadwinner (permanent life insurance) and convertible term insurance (term riders) on the
other family members - ANS-Family Protection Policy
comprised mostly of conservative investments like bonds; these investments are secure enough
to allow the insurance company to guarantee a specified rate of interest, as well as assure the
future income payments that the annuity will provide; fixed annuity premiums are deposited into
this - ANS-General Account
- ANS-
- ANS-Straight Life
a statement guaranteed to be true - ANS-Warranty
a statement true to the best of an applicant's knowledge - ANS-Representation
allows policy owner a specified number of days from receipt to look over the policy and if
dissatisfied for any reason, return it for a full refund of premium; starts when policy owner
receives policy - ANS-Right to Examine (Free Look)
allows the contract holder, in the event that interest rates drop a specified amount within a
specified time frame, to surrender the contract without charge - ANS-Bail-Out Provision
(Annuity)
amount of each payment received from the annuity during the annuity period - ANS-Level
Benefit Payment Amount
amount of premium paid or cash value accumulated; frequency of payment; interest rate;
annuitant's age and gender - ANS-Annuity Income Amount Based On
annuitant selects how much each payment will be, and the insurer determines how long the
benefits will be paid by analyzing the value of the account and future earnings; pays a specific
amount until funds are exhausted, whether or not the annuitant is living - ANS-Fixed Amount
Installments
annuitant selects the time period for the benefits, and insurer determines how much each
payment will be, based on the value of the account and future earnings projections; pays for a
specified amount of time only, whether or not the annuitant is living - ANS-Fixed-Period
Installments
annuity is purchased with multiple payments that can vary from year to year (e.g. portion of
each paycheck), and the benefit payments begin sometime after one year from the date of
purchase (e.g. payouts start at age 65) - ANS-Flexible Premium Deferred Annuity (FPDAs)
annuity is purchased with single payment, but benefit isn't paid until after one year or more has
elapsed - ANS-Single Premium Deferred Annuities (SPDAs)
, annuity payments are guaranteed for the lifetime of the annuitant and for a specified period time
for the beneficiary - ANS-Life with Period Certain
any life insurance policy that fails a 7-pay test; loses the standard tax benefits of a lifer
insurance contract; death benefit received by the beneficiary is tax free; cash value:
tax-deferred accumulations; any distributions are taxable, including withdrawals and policy
loans; distributions are taxed are taxed on LIFO basis - known as "interest-first" rule;
distributions before age 59 1/2 are subject to a 10% penalty - ANS-Modified Endowment
Contract (MEC)
any life insurance written on the life of a minor; "jumping juvenile" is a common type where the
face amount increases at a predetermined age, often age 21; premium remains level throughout
- ANS-Juvenile Life
basic whole life policy; will typically have the lowest annual premium - ANS-Continuous
Premium (Straight Life or Ordinary Life)
business continuation agreement that determines what will be done with the business in the
event that an owner dies or becomes disabled - ANS-Buy-Sell Agreement
cash value is dependent upon the performance of the equity index (S&P 500) although there is
a guaranteed minimum interest rate; policy's face amount increases annually to keep pace with
inflation - ANS-Equity-Indexed Whole Life
cash values accumulate based upon a specific portfolio of stocks without guarantees of
performance; keep pace with inflation, and are determined by the value of securities backing it -
ANS-Variable Life Insurance and Annuities
charge a level annual premium for the lifetime of the insured and provide a level, guaranteed
death benefit - ANS-Straight Life
combined with premiums to spread the operating costs of a business to all insureds -
ANS-Expense Loading
combines whole life with term insurance to cover family members in a single policy; whole life on
breadwinner (permanent life insurance) and convertible term insurance (term riders) on the
other family members - ANS-Family Protection Policy
comprised mostly of conservative investments like bonds; these investments are secure enough
to allow the insurance company to guarantee a specified rate of interest, as well as assure the
future income payments that the annuity will provide; fixed annuity premiums are deposited into
this - ANS-General Account
