Life And Health Insurance Exam 2025 State of Indiana with
300 Exam Practice Questions and Correct Verified Answers
WITH DEEP EXPLANATIONS/ / Life & Health Insurance Test
2025 (New!)
Which of the following will vary the length of the grace period in health insurance policies?
a) The mode of the premium payment
b) The length of any elimination period
c) The length of time the insured has been insured
d) The term of the policy - ANSWER-a) The mode of the premium payment
The grace period is 7 days on a policy with a weekly premium mode; 10 days if a monthly premium
mode; 31 days on other premium modes.
What is the "elimination period" under a long term care policy?
a) The amount of time that benefits can be received tax-free.
b) The amount of time during which no benefits will be paid.
c) The amount of time that the insured will have to review the policy and return it for a full refund.
d) The amount of consecutive days during which the benefits will be paid. - ANSWER-b) The
amount of time during which no benefits will be paid.
The elimination period starts on the day that the policy goes into effect. This is the amount of time
(usually 0-365 days) that no benefits will be paid. LTC policies typically have a 30-day elimination
period.
The dividend option in which the policyowner uses dividends to purchase a term policy for one year
is referred to as the
a) One-year term option.
b) Paid-up option.
c) Accelerated endowment.
d) Paid-up additions. - ANSWER-a) One-year term option.
The dividend is utilized to purchase one year term insurance.
Which of the following is true regarding the regulation of providers?
,a) Only the Department of Insurance can be the regulator for insurance providers.
b) There are no specifications on regulation of providers.
c) Only health care service plan providers fall under the jurisdiction of the DOI.
d) Providers must be under the jurisdiction of either the Department of Insurance or other
governmental agencies. - ANSWER-d) Providers must be under the jurisdiction of either the
Department of Insurance or other governmental agencies.
All entities that provide coverage designed to pay for health care providers' services and expenses
must be under the jurisdiction of either the Department of Insurance or other governmental
agencies.
What describes a situation when poor risks are balanced with preferred risks, and average risks are in
the middle?
a) Adverse selection
b) Equitable spread of risk
c) Ideally insurable risk
d) Profitable distribution of exposures - ANSWER-d) Profitable distribution of exposures
The profitable distribution of exposures is achieved when poor risks are balanced with preferred
risks, and average risks are in the middle.
Because of the history of cancer in her family, Julie purchased a policy that specifically covers the
expense of treating cancer. Her policy would be classified as what type of policy?
a) Term Health Policy
b) Dread Disease Policy
c) Family History Cancer Policy
d) Specified Health Policy - ANSWER-b) Dread Disease Policy
A Dread Disease Policy is a limited policy that is written to specifically cover cancer expense.
All of the following are true regarding rebates EXCEPT
a) Rebates are allowed if it's in the best interest of the client.
b) Rebates are only allowed if specifically stated in the policy.
c) Rebating can be anything of economic value, given as an inducement to buy.
,d) Dividends are not considered to be rebates. - ANSWER-a) Rebates are allowed if it's in the best
interest of the client.
A rebate is an illegal act which involves returning something of value to the client as an inducement
to buy, such as the commission. Rebates are only allowed if specifically stated in the policy. Insurance
dividends are not considered rebates as the IRS considers it as a return of overpaid premium.
An insurer invests the money it receives from premiums paid by its insureds. Which of the following
is TRUE regarding the interest earned on these investments?
a) It is used to fund executive bonuses
b) It is used to increase the death benefit.
c) It is used to lower premiums.
d) It is paid out as dividends. - ANSWER-c) It is used to lower premiums.
Because insurers receive premiums before they must pay out benefits, they can invest the premium
money and use the interest to lower premium amounts charged to insureds.
Which of the following would automatically qualify for Medi-Cal benefits?
a) An individual receiving Social Security payments
b) A person receiving Supplementary Security Income assistance
c) A child under the age of 21
d) A low-income person under the age of 65 - ANSWER-b) A person receiving Supplementary
Security Income assistance
California residents in a variety of situations may qualify for benefits from Medi-Cal; however,
individuals who receive cash assistance from one of the following programs are automatically eligible
for Medi-Cal: SSI/SSP, CalWORKS, Refugee Assistance and Foster Care or Adoption Assistance
Program.
An insured committed suicide one year after his life insurance policy was issued. The insurer will
a) Pay the policy's cash value.
b) Pay the full death benefit to the beneficiary.
c) Pay nothing.
d) Refund the premiums paid. - ANSWER-d) Refund the premiums paid.
If the insured commits suicide within 2 years following the policy effective date, the insurer's liability
is limited to a refund of premium.
, An insurance company and its agents must notify all applicants and policyholders of information-
gathering processes utilized for written application transactions
a) At the time of delivery of the policy when personal information is only collected from the
applicant, an insured under the policy, or public records.
b) At the time of application for the policy when information is collected from sources other than the
applicant, persons under the policy, or public records.
c) Both of these ANSWERs are correct.
d) Neither of these ANSWERs is correct. - ANSWER-c) Both of these ANSWERs are correct.
CIC 791.04 states that notice must be made at application when sources other than the applicant,
persons under the policy, or public records are used, but at delivery when personal information is
only collected from the applicant, an insured under the policy, or public records.
Both Universal Life and Variable Universal Life have a
a) Increasing premium.
b) Flexible premium.
c) Level fixed premium.
d) Decreasing premium. - ANSWER-b) Flexible premium.
Variable universal life, like universal life itself, has a flexible premium that can be increased or
decreased as the policyowner chooses, so long as there is enough value in the policy to fund the
death benefit.
Which of the following information regarding an insured is NOT included in an Investigative
Consumer Report, which is requested by an underwriter?
a) General reputation
b) Medical History
c) Applicant's character
d) Personal habits - ANSWER-b) Medical History
An Investigative Consumer Report is considered to be a part of an insurance application. This report
is used in the underwriting process in order to assess non-medical risk factors related to moral
standing and avocations. Friends and colleagues are interviewed in order to evaluate the applicant's
300 Exam Practice Questions and Correct Verified Answers
WITH DEEP EXPLANATIONS/ / Life & Health Insurance Test
2025 (New!)
Which of the following will vary the length of the grace period in health insurance policies?
a) The mode of the premium payment
b) The length of any elimination period
c) The length of time the insured has been insured
d) The term of the policy - ANSWER-a) The mode of the premium payment
The grace period is 7 days on a policy with a weekly premium mode; 10 days if a monthly premium
mode; 31 days on other premium modes.
What is the "elimination period" under a long term care policy?
a) The amount of time that benefits can be received tax-free.
b) The amount of time during which no benefits will be paid.
c) The amount of time that the insured will have to review the policy and return it for a full refund.
d) The amount of consecutive days during which the benefits will be paid. - ANSWER-b) The
amount of time during which no benefits will be paid.
The elimination period starts on the day that the policy goes into effect. This is the amount of time
(usually 0-365 days) that no benefits will be paid. LTC policies typically have a 30-day elimination
period.
The dividend option in which the policyowner uses dividends to purchase a term policy for one year
is referred to as the
a) One-year term option.
b) Paid-up option.
c) Accelerated endowment.
d) Paid-up additions. - ANSWER-a) One-year term option.
The dividend is utilized to purchase one year term insurance.
Which of the following is true regarding the regulation of providers?
,a) Only the Department of Insurance can be the regulator for insurance providers.
b) There are no specifications on regulation of providers.
c) Only health care service plan providers fall under the jurisdiction of the DOI.
d) Providers must be under the jurisdiction of either the Department of Insurance or other
governmental agencies. - ANSWER-d) Providers must be under the jurisdiction of either the
Department of Insurance or other governmental agencies.
All entities that provide coverage designed to pay for health care providers' services and expenses
must be under the jurisdiction of either the Department of Insurance or other governmental
agencies.
What describes a situation when poor risks are balanced with preferred risks, and average risks are in
the middle?
a) Adverse selection
b) Equitable spread of risk
c) Ideally insurable risk
d) Profitable distribution of exposures - ANSWER-d) Profitable distribution of exposures
The profitable distribution of exposures is achieved when poor risks are balanced with preferred
risks, and average risks are in the middle.
Because of the history of cancer in her family, Julie purchased a policy that specifically covers the
expense of treating cancer. Her policy would be classified as what type of policy?
a) Term Health Policy
b) Dread Disease Policy
c) Family History Cancer Policy
d) Specified Health Policy - ANSWER-b) Dread Disease Policy
A Dread Disease Policy is a limited policy that is written to specifically cover cancer expense.
All of the following are true regarding rebates EXCEPT
a) Rebates are allowed if it's in the best interest of the client.
b) Rebates are only allowed if specifically stated in the policy.
c) Rebating can be anything of economic value, given as an inducement to buy.
,d) Dividends are not considered to be rebates. - ANSWER-a) Rebates are allowed if it's in the best
interest of the client.
A rebate is an illegal act which involves returning something of value to the client as an inducement
to buy, such as the commission. Rebates are only allowed if specifically stated in the policy. Insurance
dividends are not considered rebates as the IRS considers it as a return of overpaid premium.
An insurer invests the money it receives from premiums paid by its insureds. Which of the following
is TRUE regarding the interest earned on these investments?
a) It is used to fund executive bonuses
b) It is used to increase the death benefit.
c) It is used to lower premiums.
d) It is paid out as dividends. - ANSWER-c) It is used to lower premiums.
Because insurers receive premiums before they must pay out benefits, they can invest the premium
money and use the interest to lower premium amounts charged to insureds.
Which of the following would automatically qualify for Medi-Cal benefits?
a) An individual receiving Social Security payments
b) A person receiving Supplementary Security Income assistance
c) A child under the age of 21
d) A low-income person under the age of 65 - ANSWER-b) A person receiving Supplementary
Security Income assistance
California residents in a variety of situations may qualify for benefits from Medi-Cal; however,
individuals who receive cash assistance from one of the following programs are automatically eligible
for Medi-Cal: SSI/SSP, CalWORKS, Refugee Assistance and Foster Care or Adoption Assistance
Program.
An insured committed suicide one year after his life insurance policy was issued. The insurer will
a) Pay the policy's cash value.
b) Pay the full death benefit to the beneficiary.
c) Pay nothing.
d) Refund the premiums paid. - ANSWER-d) Refund the premiums paid.
If the insured commits suicide within 2 years following the policy effective date, the insurer's liability
is limited to a refund of premium.
, An insurance company and its agents must notify all applicants and policyholders of information-
gathering processes utilized for written application transactions
a) At the time of delivery of the policy when personal information is only collected from the
applicant, an insured under the policy, or public records.
b) At the time of application for the policy when information is collected from sources other than the
applicant, persons under the policy, or public records.
c) Both of these ANSWERs are correct.
d) Neither of these ANSWERs is correct. - ANSWER-c) Both of these ANSWERs are correct.
CIC 791.04 states that notice must be made at application when sources other than the applicant,
persons under the policy, or public records are used, but at delivery when personal information is
only collected from the applicant, an insured under the policy, or public records.
Both Universal Life and Variable Universal Life have a
a) Increasing premium.
b) Flexible premium.
c) Level fixed premium.
d) Decreasing premium. - ANSWER-b) Flexible premium.
Variable universal life, like universal life itself, has a flexible premium that can be increased or
decreased as the policyowner chooses, so long as there is enough value in the policy to fund the
death benefit.
Which of the following information regarding an insured is NOT included in an Investigative
Consumer Report, which is requested by an underwriter?
a) General reputation
b) Medical History
c) Applicant's character
d) Personal habits - ANSWER-b) Medical History
An Investigative Consumer Report is considered to be a part of an insurance application. This report
is used in the underwriting process in order to assess non-medical risk factors related to moral
standing and avocations. Friends and colleagues are interviewed in order to evaluate the applicant's
