Indiana Life and Health Insurance State Exam Simulator Questions and Answers Graded A

Indiana Life and Health Insurance State Exam Simulator Questions and Answers Graded A An architecture firm would stand to lose a lot of money in the event of the death of its project manager. Which type of policy should the firm purchase on its project manager? Universal life insurance Key Person insurance Graded insurance Executive insurance Correct. Key person insurance is a type of life insurance policy that provides a death benefit to a business if its owner or another significant employee passes away. If a retiree on Medicare required five hospital stays in one year, which policy would provide the best insurance for excess hospital expenses? Long-term care Indemnity Medicare Supplement Medicaid Correct. In this situation, a Medicare Supplement policy would provide the subscriber the best coverage for excess charges. Which of the following permits an insurance company to transact business in Indiana?3 Certificate of admission Certificate of domestication Certificate of authenticity Certificate of authority Correct. A certificate of authority permits an insurance company to transact business in Indiana. A policyowner is able to choose the frequency of premium payments through what policy feature? Consideration Payor benefit Premium Mode Assignment provision 53 of 200 Questions Remaining Proceed Correct. Premium Mode is the feature that allows the policyowner to select the timing of premium payment, such as monthly, quarterly, annually etc. Z owns a Disability Income policy with a 30-day Elimination period. Z contracts pneumonia that leaves him unable to work from January 1 until January 15. Z then becomes disabled from an accident on February 1 and the disability lasts until July 1 the same year. Z will become eligible to receive benefits starting on: January 1 January 15 February 1 March 1 53 of 200 Questions Remaining Proceed Correct. The elimination period is the period of time between the onset of a disability, and the time you are eligible for benefits. It is best thought of as a deductible period for your policy. After a 30-day Elimination period, Z will become eligible for receiving benefits on March 1. Which of the following are Equity Indexed annuities typically invested in? Corporate Bonds Money Market accounts Municipal Bonds S&P 500 53 of 200 Questions Remaining Proceed Correct. An indexed annuity is a type of tax-deferred annuity whose credited interest is linked to an equity index — typically the S&P 500. A group life insurance policy can be converted to an individual whole life policy under which circumstance? Employment termination Nonpayment of premiums Policy reinstatement Decrease in employer revenue 53 of 200 Questions Remaining Proceed Correct. Termination of employment is a circumstance under which a group life insurance policy can be converted to an individual policy. K owns a Whole Life policy. If K wants an increasing Death Benefit to protect against inflation, which Dividend Option should she chose? Paid-Up Additional Insurance Cash Option Reduced Premiums Accumulate with Interest 53 of 200 Questions Remaining Proceed Correct. In this situation, Paid-Up Option should be When is the face amount of a Whole Life policy paid? At the policy's maturity date only When the insured dies or at the policy's maturity date, whichever happens first Only when the insured dies When the policy is surrendered 53 of 200 Questions Remaining Proceed Correct. The face amount of a Whole Life policy will be paid when the insured dies or on maturity of the policy, whichever occurs first. Which of the following provides funding for the Indiana Life and Health Insurance Guaranty Association? NAIC Department of Insurance Revenue bonds Member company assessments 53 of 200 Questions Remaining Proceed Correct. The Indiana Life and Health Insurance Guaranty Association is funded by assessments on member companies. An applicant for a resident insurance producer's license MUST meet which of the following requirements? Have at least thirty college credits in insurance-related courses Complete a prelicensing examination Submit a minimum of two insurance company appointments to the Insurance Commissioner Be a resident of this state for a minimum of one year 53 of 200 Questions Remaining Proceed Correct. One of the requirements for obtaining a resident insurance license is to have successfully passed the examination for the line of authority to which the person has applied. Which of the following medical expenses does Cancer insurance NOT cover? Chemotherapy Radiation treatment Physician visit Arthritis 53 of 200 Questions Remaining Proceed Correct. Cancer insurance typically covers all of these medical expenses except for arthritis. If an individual is covered under an Accidental Death Policy and dies, an autopsy can be performed in all these situations, EXCEPT: When the cause of death is unknown When the state prohibits this by law When consent for the autopsy is not obtained When foul play was a contributing factor 53 of 200 Questions Remaining Proceed Correct. Applicable state laws that prevent an autopsy take precedence. J is issued a Life Insurance policy with a death benefit of $100,000. She pays $600 per year in premium for the first 5 years. The premium then increases to $900 per year in the sixth year, and remains level thereafter. The policy's death benefit also remains at $100,000. Which type of Life Insurance policy is this? Endowment Graded Premium Life Straight Life Modified Premium Life 53 of 200 Questions Remaining Proceed Correct. Modified whole life policies are distinguished by premiums that are lower than typical whole life premiums during the first few years (usually five) and then higher than typical thereafter. In life insurance, the needs approach is used mostly to establish: which type of life insurance a client should apply for how much life insurance a client should apply for which company a client should use when applying for life insurance what the maximum amount the client can spend on life insurance 53 of 200 Questions Remaining Proceed Correct. The "needs approach" in life insurance is most useful in determining the amount of life insurance to be recommended to a client. What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of that 30 years? Family Lump Sum Policy Family Maintenance Policy Family Survivor Policy Family Income Policy 53 of 200 Questions Remaining Proceed Correct. A Family Maintenance Policy pays a monthly income from the date of death of the insured to the end of the preselected period. The payment of the face amount of the policy is payable at the end of such preselected period. Eligible employees must be added to group health coverage NO LATER than ___ days after their first day of employment. 30 45 60 90 53 of 200 Questions Remaining Proceed Correct. Employees shall be added to the master group coverage no later than 90 days after their first day of employment. A life insurance arrangement which circumvents insurable interest statutes is called: a contract of adhesion an indemnity contract key person insurance Investor-Originated Life Insurance Correct. Investor-originated life insurance (or IOLI) is used to circumvent state insurable interest statutes. This is done when an investor (or stranger) persuades an individual to take out life insurance specifically for the purpose of selling the policy to the investor. The investor compensates the insured and makes the premiums, then collects the death benefit when the insured dies. N, age 50, recently bought an annuity that will pay a guaranteed $2,000/month at age 70 for life. What type of annuity did N purchase? Fixed Period Fixed Deferred Fixed Immediate Fixed Variable 53 of 200 Questions Remaining Proceed Correct. A Fixed Deferred annuity pays out a fixed amount for life starting at a future date. A Major Medical policy typically contains a provision that requires the insurer to pay only part of a loss, while the balance is paid by the insured. This provision is called Assignment of Benefits Coinsurance Indemnity Co-deductible 53 of 200 Questions Remaining Proceed Correct. The provision in a Major Medical policy that requires the insurance company pay only part of a loss and the insured to pay the balance is known as coinsurance. In an individual retirement account (IRA), rollover contributions are: subject to capital gains tax subject to ordinary income tax partially limited by dollar amount not limited by dollar amount 53 of 200 Questions Remaining Proceed Correct. Rollover contributions to an individual retirement account are unlimited by dollar amount. Which tax would an IRA participant be subjected to on distributions received prior to age 59 1/2?