Indiana State Life and Health Insurance Exam

How many days is a temporary producers license valid?

30
60
90
180

180

In Indiana, the maximum fine the the commissioner can impose on a producer or company who violates a cease and desist order is___per violation?

$10,000
$15,000
$20,000
$25,000

$25,000

Which of these is an example of twisting?

A producer maliciously aligns another insurance company's financial status

A producer misrepresents a policy to induce a policyowner to surrender an existing policy

A producer reduces the commission in order to sell a policy

A producer induces a policyowner with something of value to purchase a policy

A producer misrepresents a policy to induce a policyowner to surrender an existing policy

Which of the following is a requirement to obtain a nonresident producer license in Indiana?

Maintain a specific sales quota in resident state

Own real estate in Indiana

Be licensed as a producer in the producer's state of domicile

Pass a special examination for nonresident producers

Be licensed as a producer in the producer's state of domicile

P is a producer who is licensed in Indiana, but a resident of Michigan. In Indiana , P is considered to be a____Producer?

Nonresident
Foreign
Alien
Reciprocal

Nonresident

If an existing Accident and Health policy is being replaced with a new policy, the decision to replace should not be based on?

Waiting Periods
Commissions to be Paid
Exclusion and Limitations
Underwriting Requirements

Commissions to be Paid

A domestic insurance company in Indiana must?

Be organized under Indiana insurance laws

Own real estate in Indiana

Write insurance on risks located only in Indiana

Honor the charter of the NAIC

Be organized under Indiana insurance laws

Which of the following is a requirement to obtain a nonresident producer license in Indiana?

The producer must be at least 21 years of age

The producer's state of residence must have reciprocity with Indiana

The producer must be bonded in the producer's state of domicile

The producer must pass a special examination for nonresident producers

The producer's state of residence must have reciprocity with Indiana

What is Indianas definition of Life insurance replacement?

A transaction in which coverage on an existing policy is increased

A transaction in which group life coverage is converted to an individual policy

A transaction in which a new policy is bought and an old policy is terminated

A transaction in which a policyowner reinstates a lapsed policy

A transaction in which a new policy is bought and an old policy is terminated

Upon reaching the limiting age, a handicapped child can extend their health insurance coverage as a dependent?

Only if the child is incapable of employment and chiefly dependent on the policyowner

For up to an additional 10 years only

Only physically disabled

Only if mentally disabled

Only if the child is incapable of employment and chiefly dependent on the policyowner

Which of the following is not a valid reason for the insurance commissioner to suspend or revoke a producers license?

Producer returns part of a commission to client in exchange for a sale

Producer represents more than one insurance company

Producer engages in false advertising

Producer commingles premiums collected with a personal account

Producer represents more than one insurance company

A producers license may be denied, suspended, or revoked if the licensee?

Engages in replacement of an existing policy

Is found guilty of misrepresentation in obtaining the license

Files for bankruptcy

Does not meet a sales quota

Is found guilty of misrepresentation in obtaining the license

During the course of an insurance business transaction, who does the producer legally represent?

Producer
Insured
Insurance Company
Beneficiary

Insurance Company

An example of rebating would be?

Returning a portion of a premium as inducement to purchase insurance

Reducing the premium across the board for a specific risk class

A mutual insurance company paying dividends to its policyowners

Using intimidation in order to restrain or monopolize the business of insurance

Returning a portion of a premium as inducement to purchase insurance

Which of the following is a requirement to be eligible for a group life policy in Indiana?

Group must be formed for a purpose other than obtaining insurance

Group must designate one of its members to be the named insured

Group must have been formed for obtaining insurance

Group must include at least five employers

Group must be formed for a purpose other than obtaining insurance

What is required for a Producer to be in compliance with Rule 13, Life Insurance Advertising?

A potential Applicant must be told the the Producer is currently licensed for any Life Insurance transaction

A potential Applicant must be told that Life insurance is the exclusive subject of the sale

A Producer is required to notify potential Applicants that dividends are guaranteed

A Producer is required to have all sales materials approved by the commissioner

A potential Applicant must be told that Life insurance is the exclusive subject of the sale

When a life insurance application is completed, a Policy Summary must be given to the applicant. The Policy Summary must include?

The insurers AM Best rating

The Producers address

Cash value rate

The premiums cost for basic coverage applied for

The premiums cost for basic coverage applied for

All of these statements are true regarding a child qualifying for coverage under the Indiana children Health Insurance Program, except?

Must be a resident of Indiana to qualify

Must be 19 years of age to qualify

Family's income level must be greater than 150% of Federal poverty level, but less than 200%

Must have been born in the united States to qualify

Must have been born in the united States to qualify

As a condition for a loan, a bank requires the borrower to purchase credit insurance from a specific company. What is the bank guilty of?

Coercion
Defamation
Rebating
Misrepresentation

Coercion

Which of these statements regarding health coverage for physically handicapped dependents is false?

The dependent must have been over 10 years of age when the handicap was insured

The dependent must have been covered under the insureds policy at the time the handicap was insured

The dependent must rely chiefly on the policyowner for support and maintenance

The dependent must agree to periodic medical examinations at the request of the insurance company

The dependent must have been over 10 years of age when the handicap was insured

Life insurance replacement regulation protects the interests of?

The Policyowner
The Producer
The Insurer
The NAIC

The Policyowner

What is the purpose of the Indiana Life and Health Insurance Guaranty Association?

Ensures that claims filled against insolvent insurance companies will be paid

Enforces Indianas insurance regulations

Approves policy forms

Underwrites high-risk insurance applicants

Ensures that claims filled against insolvent insurance companies will be paid

The _____ must provide an insured with proper disclosure concerning the replacement of a life insurance policy?

Compliance Officer
Underwriter
Commissioner
Producer

Producer

In Indiana, which o the following is considered an Unfair Competition Practice?

Replacement
Coercion
Aleatory
Subrogation

Coercion

The Insurance Commissioner may suspend, revoke, or refuse to renew a producer's license for which of the following reasons?

Producer files for bankruptcy

Producer engages in the replacement of an existing policy

Producer has used fraudulent, coercive, or dishonest practices

Producer does not meet a sales quota

Producer has used fraudulent, coercive, or dishonest practices

The Commissioner is appointed be the?

Governor
Attorney General
State Senate
NAIC

State Senate

The coordination of benefits provision exists in order to?

Avoid duplication of benefits payments

Avoid excessive hospitalization

Lower insurance premiums

Maximize patient care

Avoid duplication of benefits payments

According to Indiana law, how long is the Free Look period for a Medicare Supplement Policy?

10 Days
20 Days
30 Days
40 Days

30 Days

How long does an insurance company appointment remain in force for?

1 Year
2 Years
3 Years
Until Terminated

Until Terminated

Which of the following is not an unfair claim settlement practice?

Failing to acknowledge and act promptly with respect to an insurance claim

Compelling an insured to initiate a lawsuit be offering less on an insurance claim

Failing to accept or deny a claim within reasonable time after proof of loss is submitted

Needing written documentation of claim details

Needing written documentation of claim details

The Affordable Care Act provides health coverage to dependents up to the age of?

18
21
26
28

26

to continue health coverage for a newborn, the policyowner must notify the insurer of birth and provide the first premium payment within ____ days of birth?

10
15
30
31

31

What does a certificate of authority allow?

A nonresident producer to conduct insurance business

An insurance company to exceed coverage limits that the Guaranty Fund covers

An insurance company to conduct insurance business in Indiana

A resident producer to sell insurance contracts

An insurance company to conduct insurance business in Indian

The free-look period for life insurance policies issued in Indiana is ____ days?

10
14
30
45

10

In Indiana, which of the following must be delivered to a policyowner upon the sale of an individual life insurance policy?

Insurers AM Best rating

The written sales proposal

Policy Summary and Buyer's Guide

Buyer's Guide only

Policy Summary and Buyer's Guide

Jill is covered under two Group Health policies, one through her employer and one through her husbands employer. If Jill suffers a loss, which policy provision dictates the primary coverage?

Replacement
Time Payment of Claims
Notice if Claim
Coordination of Benefits

Coordination of Benefits

The Insurance Commissioner is authorized?

To enforce state laws relating to insurance

To pass state laws relating to insurance

To set insurance rates for foreign insurers

To set sales quotas

To enforce state laws relating to insurance

An applicant must receive an Outline of Coverage when an application is taken for a?

Endowment
Annuity
Medicare Supplement Policy
Universal Life Policy

Medicare Supplement Policy

Long-Term Care policies sold in Indiana may exclude coverage for pre-existing conditions for?

6 Months
8 Months
12 Months
18 Months

6 Months

If a new life insurance policy is replacing an existing one, the insured is given the right to return for a full refund of at least ____ days after policy delivery?

10
20
30
40

20

What is required for Producers to sell Long Term Care in Indiana?

Eight hours of post licensing education specifically devoted to LTC

Twelve hours of post licensing education specifically devoted to LTC

A Chartered Long Term Care designation

Passing a separate examination specifically devoted to Long Term Care

Eight hours of post licensing education specifically devoted to LTC

S is a life insurance policyowner who enters into a written agreement to receive immediate cash in exchange for the sale transfer of her life insurance policy. This agreement is referred to as a?

1035 Exchange
Viatical Settlement
Equity Cash Agreement
Cash Conversion

Viatical Settlement

The Indiana Children's Health Insurance Program provides children of need with health benefits until the child reaches age ____ or becomes financially ineligible, whichever is earlier?

18
19
20
21

19

A life policy loan in Indiana cannot charge a fixed of interest higher than?

7%
8%
9%
10%

8%

According to Indianas Mammography Coverage statue, which of these benefits are considered mandatory in every Medical Expense Policy?

One baseline mammogram for women between ages 30-34

One mammogram every year for women aged 35 and older

One mammogram every year for women aged 40 and older

Two mammograms every year for those considered "women at risk"

One mammogram every year for women aged 40 and older

What is the minimum Grace Period for an individual health policy that is paid monthly?

5 Days
10 Days
15 Days
30 Days

10 Days

What is the excise tax rate the IRS imposes on individuals aged 70 1/2 or older who do not take the required minimum distributions from their qualified retirement plan?

30%
40%
50%
60%

50%

The Common Disaster clause provides that if both the insured and sole named beneficiary were to die in a common accident, which of the following is true?

This clause provides the payment of proceeds to the insured's estate

This clause provides the payment of proceeds to the beneficiary's estate

The estate taxes in the insured's estate may be reduced

The estate taxes in the beneficiary's estate may be reduced

This clause provides the payment of proceeds to the insured's estate

What is considered a valid reason for small businesses to insure the lives of its major shareholders?

To provide an income for the surviving dependents

Reduce the company's tax liability

To pay for final expenses

Fund a buy-sell agreement

Fund a buy-sell agreement

Which of these Nonforfeiture Options continue a build-up of cash value?

Waiver of Premium
Extended Term
Reduced Paid-Up
Cash Surrender

Reduced Paid-Up

A producer's license may be denied, suspended, or revoked if the license?

Engages in replacement of an existing policy

Is found guilty of misrepresentation in obtaining the license

Files for bankruptcy

Does not meet a sales quota

Is found guilty of misrepresentation in obtaining the license

When a policyowner cash surrenders a Universal Life insurance policy in it's early years, this may be considered a red flag for a?

Federal Fair Credit Act Violation
Title 18 Fraud Violation
Anti-Money Laundering Violation
Unfair Trade Practice Violation

Anti-Money Laundering Violation

A policyowner is allowed to pay premiums more than once a year under which provision?

Insuring
Consideration
Payor
Mode of Premium

Mode of Premium

Non-occupational disability coverage is designed for?

24 hour protection

Those who are exempt from Workers' Compensation coverage

Sole proprietors and self-employed individuals

Employees who suffer non-work related disabilities, since work-related disabilities are covered be Workers' Compensation

Employees who suffer non-work related disabilities, since work-related disabilities are covered be Workers' Compensation

In order to establish a Health Reimbursement Arrangement, it must?

Be offered in conjunction with other employer provided health benefits

Limit the benefits to prescription drugs only

Be established be the employer

Limit the amount of money the employee can contribute toward the account

Be established be the employer

The Accidental Death and Dismemberment provision in a life insurance policy would pay additional benefits if the insured?

Dies of natural causes
Becomes critically ill
Becomes chronically ill
Is blinded in an accident

Is blinded in an accident

Which of these actions is taken when a policyowner uses a Life Insurance policy as collateral for a bank loan?

Revocable Assignment
Beneficiary Change
Irrevocable Assignment
Collateral Assignment

Collateral Assignment

If an insurance company issues a Disability Income policy that it cannot cancel for which it cannot increase premiums, the type of renewability that best describes this policy is called?

Noncancellable
conditionally Renewable
Cancellable
Guaranteed Renewable

Noncancellable

L takes out a life insurance policy and dies 10 years later. During the claim process, the insurer discovers that L had understated her age on the application. Under the Misstatement of Age provision, the insurer will?

Pay the death benefit in full

Adjust the death benefit to an increased amount

Adjust the death benefit to a reduced amount

Deny the claim

Adjust the death benefit to a reduced amount

Which provision allows the policyowner to change a term life policy to a permanent one without providing proof of good health?

Modification
Conversion
Exchange
Adjustable

Conversion

Life insurance coverage will frequently contain an Accelerated Benefits rider attached to the policy. What would be considered a "Qualifying event" under these riders?

Seasonal Unemployment

Short-Term Disability

Medical Condition resulting in a significantly-shortened lifespan

Divorce

Medical Condition resulting in a significantly-shortened lifespan

Which of these would e considered a Limited-Pay Life policy?

10-year Renewable and Convertible Term
Life Paid-Up at age 70
Straight Whole Life
Renewable Term to Age 100

Life Paid-Up at age 70

Medicaid was designed to assist individuals who are?

Federal employees
Disabled
In poor health
Below a specific income limit

Below a specific income limit

An example of unfair discrimination would be?

Declining an insurance application because of involvement in a hazardous occupation

Offering the same terms of coverage to different policyowners in the same risk classification

Offering different terms of coverage for different policyowners having the same risk classification

Issuing a policy at a substandard rate because of poor health

Offering different terms of coverage for different policyowners having the same risk classification

An individual who in any manner sells, solicits, or negotiates insurance on behalf of insurance companies for compensation is an insurance?

Solicitor
Adjuster
Producer
Representative

Producer

What is considered to be a characteristic of a Conditionally Renewable Health Insurance policy?

Premiums may increase at time of renewal

Premiums may increase at any time

Policy may be renewed at the discretion of the insured

Policy may be amended by insured at any time

Premiums may increase at time of renewal

K is looking to purchase Renewable Term insurance. Which of these types of Term insurance may be renewable?

Increasing
Decreasing
Adjustable
Level

Level

An insurance applicant must be informed of an investigation regarding his/her reputation and character according to the?

State Guaranty Association

Fair Labor Standards Board

Fair Credit Reporting Act

National Association of Insurance Commissioners

Fair Credit Reporting Act

Which of the following consists of an offer, acceptance, and consideration?

Warranty
Estoppel
Contract
Representation

Contract

Life insurance replacement regulation protects the interest of?

The Policyowner
The Producer
The Insurer
The NAIC

The Policyowner

If an annuity is terminated prior to beginning of the income payment period, the contract owner receives?

No refund money

The contract surrender value at the time

All premiums paid up to the date of termination

Reimbursement of all expenses deducted from the contract value

The contract surrender value at the time

Eligible employees must be added to group health coverage no later than ____ days after their first day of employment?

30
45
60
90

90

ABC Insurance Company has accepted a life insurance application which contains unanswered questions. The company then makes the application part of the life contract. In this situation, the insurer has?

Waived one of its legal rights
Issued a voidable policy
Committed an act of fraud
Assigned the risk to a reinsurer

Waived one of its legal rights

J chooses a monthly premium payment mode on his Whole Life insurance policy. Which of these statements is correct?

The gross premium is higher on a monthly payment mode as compared to being paid annually

The gross premiums is lower on a monthly payment mode as compared to being paid annually

The cash value from a life policy paid on a monthly basis builds quicker than one paid on an annual basis

The face amount of a life policy paid on a monthly basis is higher than one paid on an annual basis

The gross premium is higher on a monthly payment mode as compared to being paid annually

Which factors are taken into consideration when an insurance company determines the premium rate for a Whole Life policy on an applicant?

Geographical Location
Source of Income
Risk Classification
Marital Status

Risk Classification

From what authority derives the requirement that an insurance application contains a disclosure stating that an investigative consumer report may be obtained on an applicant?

Fair Credit Reporting Act
Medical Information Bureau
Part 3 of the Application
Life Insurance Buyer's Guide

Fair Credit Reporting Act

Which Unfair Competition Practice involves a producer suggesting that an insurance policy is like a share of stock?

Twisting
Intimidation
Misrepresentation
Sliding

Misrepresentation

Basic Medical Expense insurance?

Normally has a deductible and coinsurance

Covers an illness but not an accident

Pays for lost wages while hospitalized

Has lower benefit limits than Major Medical Insurance

Has lower benefit limits than Major Medical Insurance

A nonprofit incorporated society that does not have capital stock and operates for the sole benefit of its members is known as?

A fraternal benefit society

A stock insurer

A mutual insurer

The Life and Health Insurance Guaranty Association

A fraternal benefit society

At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act?

Before the appointment is scheduled
Upon completion of the application
At the policy's delivery
When the insurer receives the MIB report

Upon completion of the application

An example of an Unfair Claims Settlement Practice would be?

Requesting a third-party arbitrator to resolve a disagreement

Paying a claim promptly after receiving proof of loss

Misrepresenting insurance policy provisions affecting a loss

Requiring the insured to give a statement under oath

Misrepresenting insurance policy provisions affecting a loss

With Accidental Death and Dismemberment policies, what is the purpose of the Grace Period?

Gives the policyowner additional time to pay overdue premiums

Gives the policyowner additional time to file a lawsuit

Gives the policyowner additional time to file a claim

Gives the policyowner additional time to provide proof of loss

Gives the policyowner additional time to pay overdue premiums

A whole life insurance policyowner does not wish to continue making premium payments. Which of the following enables the policyowner to sell the policy for more than its cash value?

Cash Surrender
Life Settlement Contract
Buy-Sell Arrangement
1031 Exchange

Life Settlement Contract

Which of the following is an example of false advertising?

An insurer advertising in an insurance trade journal

An insurance company publishing misleading information about its policy's provisions

A producer spending more than $25 on marketing gifts for a client

Paid testimonials from celebrity endorsements

An insurance company publishing misleading information about its policy's provisions

Jill is covered under two Group Health policies, one through her employer and one through her husband's employer. If Jill suffers a loss, which policy provision dictates the primary coverage?

Replacement
Time Payment of Claims
Notice of Claim
Coordination of Benefits

Coordination of Benefits

An example of rebating would be

A mutual insurance company paying dividends to its policyowners

Reducing the premiums across the board for a specific risk class

Offering a client something of value not stated in the contract in exchange for their business

Using intimidation in order to restrain or monopolize the business of insurance.

Offering a client something of value not stated in the contract in exchange for their business

All of the following statements regarding group health insurance is true except?

Premiums are usually determined by the claims experience of the group

A master contract is issued for the group

An individual policy is given to each member

Group health insurance premiums are typically lower than individual health insurance premiums

An individual policy is given to each member

Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of unequal values reflects which of the following insurance contract features?

Aleatory
Adhesion
Unilateral
Consideration

Aleatory

Which of the following statements regarding a Tax Sheltered Annuity is incorrect?

The income from the TSA is received income tax-free

The amount contributed is deductible from taxable income

The interest earnings are tax deferred

A tax-sheltered annuity is available to employees of non-profit organizations

The income from the TSA is received income tax-free

An applicant must receive an Outline of Coverage when an applicant is taken for a?

Endowment
Annuity
Medicare Supplement Policy
Universal Life Policy

Medicare Supplement Policy

What would be an accurate definition of "controlled business"?

Insurance business that is written on the producer's own life, property, or interests

Insurance business obtained by an agent through coercion, intimidation, or boycotting

Insurance business that is obtained through false advertising

Insurance business that is obtained by replacing an existing policy through misrepresentation

Insurance business that is written on the producer's own life, property, or interests

When must insurable interest be present in order for a life insurance policy to be valid?

When the insured dies
Within the incontestability period
When the application is made
Before the insured dies

When the application is made

Who elects the governing body of a mutual insurance company?

Chairman of the board
Bondholders
Stockholders
Policyholders

Policyholders

In Indiana, the maximum fine that the Commissioner can impose on a producer or company who violates a cease and desist order is____per violation?

$10,000
$15,000
$20,000
$25,000

$25,000

An individual life insurance policy sold in Indiana can be contested by the insurer only during the first____years of the contract?

2
3
4
5

2

An example of an Unfair Claims Settlement Practice is?

Making it mandatory that the proof of loss be provided for each claim

Requiring a time for submitting a claim

Paying a claim in a timely matter

Turning down a claim without providing the basis of denial

Turning down a claim without providing the basis of denial

The agreement in a life insurance contract that states a specific sum of money will be paid to a designated person upon an insured's death is called?

Entire Contract Provision
Consideration Clause
Insuring Agreement
Assignment Agreement

Insuring Agreement

Which of the following is the most important factor when deciding how much Disability Income coverage an applicant should purchase?

Applicant'sOccupation
Applicant's Monthly Income
Applicant's Health
Applicant's Previous Disabilities

Applicant's Monthly Income

A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy. which of these statements made by the producer would be correct?

Straight life accumulates faster than Limited-Pay Life

20-Pay Life accumulates cash value faster than Straight Life

Cash value accumulation of both 20-Pay Life and Straight Life depend on the insurers financial rating

20-Pay Life and Straight Life accumulate cash value at the same rate

20-Pay Life accumulates cash value faster than Straight Life

In the event of employment termination, a person covered by a group policy also has the right to convert such coverages to an individual policy within____days without proving insurability?

15
30
31
45

31