ILHI - Indiana Life and Health Insurance Exam

Question 1: Member insurance companies report coded findings about applicants to a non-profit trade association, and other member companies may retrieve those codes later when the same person applies for coverage elsewhere. Which purpose does this shared coding system principally serve?

Setting industry-wide premium rates

Recording each insurer's final decision

Reducing misrepresentation and fraud

Replacing the medical examination entirely

Question 2: An insurer mails an issued policy to its producer for hand delivery, and the courts treat the company as having given up all control of the contract at that moment even though the policyowner has not yet touched it. Which term applies?

Actual delivery

Constructive delivery

Conditional delivery

Assignment of the policy

Question 3: A policyowner may stop paying premiums at any time and faces no lawsuit for doing so, yet the insurer remains legally bound to pay any covered claim while the contract stays in force. Which characteristic of insurance contracts is being described?

Unilateral

Bilateral

Aleatory

Contract of adhesion

Question 4: An applicant hands a producer a completed life application along with a check for the first premium. The home office reviews the file and issues exactly the policy requested, with no change. Which description of these two steps is accurate under contract law?

Insurer offered; applicant accepted by paying

Both parties made simultaneous counteroffers

Applicant made an invitation, not an offer

Applicant offered; insurer accepted by issuing

Question 5: A life underwriter pulls a Medical Information Bureau file and finds a code suggesting a serious cardiac condition the applicant did not disclose. The underwriter wants to reject the application immediately on that basis alone. What do bureau rules require instead?

Use the code to investigate further

Decline the applicant and report it

Send the code to the applicant

Rate the policy as substandard immediately

Question 6: An insurer wants an applicant for a large life policy to undergo a blood test that includes screening for the AIDS virus. Before the test may be performed, one specific thing must be obtained from the applicant. Which of the following is it?

A signed delivery receipt

Payment for the laboratory work

Written consent to the test

A statement of sexual orientation

Question 7: Two people ask a producer to write a policy that would pay out on merchandise they admit was taken from a warehouse without permission. The producer refuses, saying the arrangement fails one required element of a valid contract. Which element does it fail?

Consideration

Legal purpose

Offer and acceptance

Competent parties

Question 8: During an application interview the producer asks about height, weight, tobacco use, medications currently taken, prior diagnoses, family health conditions, and whether the proposed insured skydives or races motorcycles. Which section of the life insurance application collects this material?

Part One, personal data

The producer's report

The anti-money laundering questionnaire

Part Two, health information

Question 9: A producer is filling in the opening section of a life insurance application, which asks for the proposed insured's name, address, date of birth, gender, Social Security number, occupation, income, and the face amount applied for. Which part of the application is this?

Part Two, health information

Part Three, the producer's report

Part One, general information

The HIPAA privacy authorization form

Question 10: A producer submits an application with two health questions left blank because the applicant could not recall the dates. The home office cannot proceed. Which of the following describes the ordinary consequence of sending in an application that is not complete?

The applicant is automatically declined

It is returned, delaying underwriting

The producer loses the commission

The insurer must issue coverage anyway

Question 11: An applicant paid no premium at application and is later approved only as a substandard risk. She pays the full rated premium when the producer delivers the contract on the ninth of the month. Coverage begins then, and her free look period starts on which date?

The date the application was signed

The date the underwriter approved it

The date the first claim arises

The date the policy was delivered

Question 12: A father applies for a life insurance policy on his teenage daughter and names himself as beneficiary. The underwriter confirms the relationship satisfies a threshold requirement before the application can proceed. Which requirement does the family relationship satisfy in this situation?

Insurable interest in the proposed insured

A standard risk classification

Consent to a medical examination

A completed attending physician statement

Question 13: Before health information gathered during a life insurance application will be shared with anyone, a federal law requires the applicant to receive full notice of the insurer's information-sharing practices, the right to privacy, and a chance to refuse release. Which law imposes this?

The Fair Credit Reporting Act

The Health Insurance Portability and Accountability Act

The USA PATRIOT Act

The Employee Retirement Income Security Act

Question 14: The insurer's attorneys draft every clause of a life policy, and the buyer has no ability to negotiate any wording; the buyer either takes the printed terms or declines the deal entirely. Which characteristic of insurance contracts does this arrangement describe?

Aleatory

Unilateral

Conditional

Adhesion

Question 15: A young applicant is an active rock climber. Rather than decline the case or add a flat extra charge, the insurer issues the policy at standard rates but attaches a rider removing death benefit for losses arising from climbing. Which underwriting tool is this?

A reinsurance treaty

A conditional receipt

An exclusion rider

An attending physician statement

Question 16: An insurer reviews the file and issues a policy even though one section of the application was left completely blank. Two years later a claim arrives that relates directly to the missing information. Which statement best describes the insurer's position on that omission?

It may rescind the policy immediately

It waived its right to that information

It may deny the claim outright

It may demand the answers now

Question 17: An applicant answers a question on a life insurance application by stating what she sincerely believes to be true about her medical history at that moment. The industry has a specific name for a statement of this kind. Which term applies?

A warranty

A concealment

A material misrepresentation

A representation

Question 18: Before a life insurer will release proceeds, the beneficiary must file a claim form together with a certified death certificate, and the premium must have been kept current. Which characteristic of insurance contracts requires these steps be met first?

Aleatory

Utmost good faith

Conditional

Personal contract

Question 19: A policyowner pays a single modest premium and dies in a covered accident three months later, and the beneficiary collects a benefit many times larger than everything paid in. Which characteristic of an insurance contract does that lopsided exchange illustrate?

Aleatory

Indemnity

Adhesion

Personal contract

Question 20: An underwriter reviewing a life insurance file may draw on medical exams, attending physician statements, the Medical Information Bureau and consumer reports. Even so, one document remains the primary source of information about the proposed insured. Which document holds that position?

The Medical Information Bureau file

The investigative consumer report

The insurance application

The attending physician statement

ILHI Indiana Life and Health Insurance Exam - Set 3 - Part 1

Question 1: Member insurance companies report coded findings about applicants to a non-profit trade association, and other member companies may retrieve those codes later when the same person applies for coverage elsewhere. Which purpose does this shared coding system principally serve?

Question 2: An insurer mails an issued policy to its producer for hand delivery, and the courts treat the company as having given up all control of the contract at that moment even though the policyowner has not yet touched it. Which term applies?

Question 3: A policyowner may stop paying premiums at any time and faces no lawsuit for doing so, yet the insurer remains legally bound to pay any covered claim while the contract stays in force. Which characteristic of insurance contracts is being described?

Question 4: An applicant hands a producer a completed life application along with a check for the first premium. The home office reviews the file and issues exactly the policy requested, with no change. Which description of these two steps is accurate under contract law?

Question 5: A life underwriter pulls a Medical Information Bureau file and finds a code suggesting a serious cardiac condition the applicant did not disclose. The underwriter wants to reject the application immediately on that basis alone. What do bureau rules require instead?

Question 6: An insurer wants an applicant for a large life policy to undergo a blood test that includes screening for the AIDS virus. Before the test may be performed, one specific thing must be obtained from the applicant. Which of the following is it?

Question 7: Two people ask a producer to write a policy that would pay out on merchandise they admit was taken from a warehouse without permission. The producer refuses, saying the arrangement fails one required element of a valid contract. Which element does it fail?

Question 9: A producer is filling in the opening section of a life insurance application, which asks for the proposed insured's name, address, date of birth, gender, Social Security number, occupation, income, and the face amount applied for. Which part of the application is this?

Question 10: A producer submits an application with two health questions left blank because the applicant could not recall the dates. The home office cannot proceed. Which of the following describes the ordinary consequence of sending in an application that is not complete?

Question 11: An applicant paid no premium at application and is later approved only as a substandard risk. She pays the full rated premium when the producer delivers the contract on the ninth of the month. Coverage begins then, and her free look period starts on which date?

Question 13: Before health information gathered during a life insurance application will be shared with anyone, a federal law requires the applicant to receive full notice of the insurer's information-sharing practices, the right to privacy, and a chance to refuse release. Which law imposes this?

Question 14: The insurer's attorneys draft every clause of a life policy, and the buyer has no ability to negotiate any wording; the buyer either takes the printed terms or declines the deal entirely. Which characteristic of insurance contracts does this arrangement describe?

Question 15: A young applicant is an active rock climber. Rather than decline the case or add a flat extra charge, the insurer issues the policy at standard rates but attaches a rider removing death benefit for losses arising from climbing. Which underwriting tool is this?

Question 16: An insurer reviews the file and issues a policy even though one section of the application was left completely blank. Two years later a claim arrives that relates directly to the missing information. Which statement best describes the insurer's position on that omission?

Question 17: An applicant answers a question on a life insurance application by stating what she sincerely believes to be true about her medical history at that moment. The industry has a specific name for a statement of this kind. Which term applies?

Question 18: Before a life insurer will release proceeds, the beneficiary must file a claim form together with a certified death certificate, and the premium must have been kept current. Which characteristic of insurance contracts requires these steps be met first?

Question 19: A policyowner pays a single modest premium and dies in a covered accident three months later, and the beneficiary collects a benefit many times larger than everything paid in. Which characteristic of an insurance contract does that lopsided exchange illustrate?

Question 20: An underwriter reviewing a life insurance file may draw on medical exams, attending physician statements, the Medical Information Bureau and consumer reports. Even so, one document remains the primary source of information about the proposed insured. Which document holds that position?

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