INDIANA LIFE AND HEALTH INSURANCE
PRACTICE EXAM QUESTIONS AND
CORRECT ANSWERS (VERIFIED
ANSWERS) PLUS RATIONALES 2025
1. What is the purpose of insurance?
A. To create risk
B. To avoid risk
C. To transfer risk
D. To increase risk
Insurance transfers the financial risk of loss from an individual to an
insurance company.
2. Which of the following types of insurance provides coverage for a specified
period only?
A. Whole Life
B. Term Life
C. Universal Life
, D. Endowment
Term life provides protection for a set period, such as 10, 20, or 30 years.
3. What is the consideration clause in a life insurance policy?
A. The death benefit
B. The premium and statements on the application
C. The insuring agreement
D. The claim process
Consideration is what each party gives. The insured provides application
info and premium; the insurer promises to pay benefits.
4. Which rider allows the insured to purchase additional insurance at specified
dates without proof of insurability?
A. Waiver of Premium
B. Guaranteed Insurability
C. Accidental Death
D. Return of Premium
Guaranteed Insurability Rider lets insured buy more coverage at future
dates without medical exams.
5. What does the free look period allow?
A. Increase coverage
B. Receive dividends
C. Cancel the policy for a full refund
D. Convert policy type
The free look period (usually 10 days) gives the policyholder time to
review and cancel without penalty.
, 6. An insurance company incorporated in Indiana is known as a:
A. Foreign company
B. Domestic company
C. Alien company
D. Local company
A domestic insurer is one formed under the laws of the same state where
it does business.
7. What is a participating life insurance policy?
A. It pays dividends to stockholders
B. It pays dividends to policyholders
C. It has no cash value
D. It is term insurance
Participating policies return part of the premium to policyholders as
dividends.
8. What is the primary purpose of a life insurance illustration?
A. To show interest rates
B. To help applicants make informed decisions
C. To provide a quote
D. To replace a financial advisor
Illustrations explain benefits and values under different scenarios.
9. Which of the following is NOT required to be included in a policy summary?
A. Name and address of the agent
B. Insurer’s name
C. Beneficiary's name
PRACTICE EXAM QUESTIONS AND
CORRECT ANSWERS (VERIFIED
ANSWERS) PLUS RATIONALES 2025
1. What is the purpose of insurance?
A. To create risk
B. To avoid risk
C. To transfer risk
D. To increase risk
Insurance transfers the financial risk of loss from an individual to an
insurance company.
2. Which of the following types of insurance provides coverage for a specified
period only?
A. Whole Life
B. Term Life
C. Universal Life
, D. Endowment
Term life provides protection for a set period, such as 10, 20, or 30 years.
3. What is the consideration clause in a life insurance policy?
A. The death benefit
B. The premium and statements on the application
C. The insuring agreement
D. The claim process
Consideration is what each party gives. The insured provides application
info and premium; the insurer promises to pay benefits.
4. Which rider allows the insured to purchase additional insurance at specified
dates without proof of insurability?
A. Waiver of Premium
B. Guaranteed Insurability
C. Accidental Death
D. Return of Premium
Guaranteed Insurability Rider lets insured buy more coverage at future
dates without medical exams.
5. What does the free look period allow?
A. Increase coverage
B. Receive dividends
C. Cancel the policy for a full refund
D. Convert policy type
The free look period (usually 10 days) gives the policyholder time to
review and cancel without penalty.
, 6. An insurance company incorporated in Indiana is known as a:
A. Foreign company
B. Domestic company
C. Alien company
D. Local company
A domestic insurer is one formed under the laws of the same state where
it does business.
7. What is a participating life insurance policy?
A. It pays dividends to stockholders
B. It pays dividends to policyholders
C. It has no cash value
D. It is term insurance
Participating policies return part of the premium to policyholders as
dividends.
8. What is the primary purpose of a life insurance illustration?
A. To show interest rates
B. To help applicants make informed decisions
C. To provide a quote
D. To replace a financial advisor
Illustrations explain benefits and values under different scenarios.
9. Which of the following is NOT required to be included in a policy summary?
A. Name and address of the agent
B. Insurer’s name
C. Beneficiary's name
