ILHI - Indiana Life and Health Insurance Exam

Question 21: During one phase of a deferred annuity the owner is still paying premiums, interest is being credited to the contract value, and no income payments have begun. Which term identifies the phase in which the annuity is being funded?

The accumulation period

The annuitization period

The liquidation period

The payout period

Question 22: An annuitant with no dependents and no interest in leaving money behind wants the largest possible monthly check, and she accepts that payments will stop at her death even if she dies after only one payment. Which annuitization payout option matches that preference?

Life with ten year period certain

Straight life

Installment refund

Joint and survivor

Question 23: Ashley buys permanent coverage on which she must keep paying the same premium every year until she dies or until the contract matures at age one hundred. The materials also call this straight life. Which policy does Ashley own?

Limited-payment whole life

Modified premium whole life

Continuous premium whole life

Single premium whole life

Question 24: A universal life contract with a level death benefit accumulates cash value so rapidly that the account approaches the face amount. The insurer automatically raises the pure insurance protection to keep the contract qualifying as life insurance. Which feature produced that automatic increase?

The corridor of additional protection

The cost of living rider

The guaranteed insurability rider

A switch to Option B

Question 25: A retiree's chief worry is that a lifetime of savings will run out if she lives well past her life expectancy. Her producer recommends a product designed to convert that accumulated sum into income she cannot outlive. Which product fits that description?

A decreasing term life policy

An annuity contract

A modified endowment contract

A paid-up additions rider

Question 26: A policyowner adds a rider promising a death benefit equal to the total of all premiums paid on the base policy and the rider itself. She assumes the insurer will hand back her actual payments. Which statement corrects that assumption?

Premiums are refunded when the rider expires

Cash value is surrendered to fund it

It pays increasing term insurance instead

Only the base policy premiums count

Question 27: A universal life policyowner becomes disabled and her disability benefit takes effect. Rather than paying a premium bill, the insurer suspends the monthly charges pulled from her cash account, and the contract cannot lapse. Which rider produces that specific result?

Waiver of monthly deductions

Disability income rider

Long term care rider

Cost of living rider

Question 28: A policyowner named his daughter as an irrevocable beneficiary five years ago. He now applies for a policy loan against the cash value and also wants to substitute a different beneficiary. What does the irrevocable designation require of him?

Nothing, the owner controls both actions

Written consent for the loan only

Written consent for the change only

Written consent for both actions

Question 29: An insured misses the premium due on March first and dies on March twentieth without ever having paid it. Because the grace period is still running, the policy has not lapsed. How does the insurer settle the death claim?

The claim is denied entirely

Only the premiums paid are refunded

Face amount less the overdue premium

The full face amount is paid

Question 30: A policyowner wants to change the revocable beneficiary, borrow against cash value, and switch the premium mode from quarterly to annual. The current beneficiary objects to all three. Which of the following statements describes the owner's authority in this situation?

The beneficiary must approve each change

All three may proceed without consent

Only the mode change may proceed

The insurer decides which changes proceed

Question 31: A grandmother owns and pays for a permanent policy on her eight-year-old grandson. She wants the premiums to stop being due, with coverage continuing, should she die or become disabled before the boy grows up. Which rider handles that?

Payor benefit rider

Waiver of premium rider

Guaranteed insurability rider

Exchange privilege rider

Question 32: Two years after her whole life policy lapsed for nonpayment, an owner who never surrendered it for cash wants the original contract restored on its original terms and issue age. Which set of requirements must she satisfy to reinstate it?

Only the current premium is due

A brand new application and exam

Written consent of the beneficiary

Back premiums, interest, and proof of insurability

Question 33: A corporation owns and is the beneficiary of a policy insuring its chief engineer, who has just resigned. The company wants the same contract to cover her replacement instead. Which rider permits that substitution, and what will the new insured have to do?

Exchange privilege rider; prove insurability

Payor benefit rider; name a guardian

Term rider; pay a level premium

Guaranteed insurability rider; wait three years

Question 34: A participating policyowner does not want a check and does not want to reduce her premium. She instructs the insurer to hold each annual dividend on deposit so it earns interest until she withdraws it. Which dividend option has she chosen?

Cash

Paid-up additions

Accumulation at interest

One-year term

Question 35: An insured with an accidental death and dismemberment rider survives a factory accident but loses one hand. The producer explains what portion of the rider amount the insurer will pay for that single loss. Which figure applies to this dismemberment claim?

The capital sum, one-half the principal

The full principal sum

Twice the principal sum

The policy face amount

Question 36: An insured with a waiver of premium rider becomes totally disabled in March and remains disabled well past the rider's waiting period. She asks what happens to the premiums she paid while waiting. Which statement correctly describes the insurer's handling?

They are added to the cash value

They are refunded to her retroactively

They are treated as a policy loan

They are forfeited once disability continues

Question 37: Two long term care riders are offered. Under the first, benefits paid for nursing home care leave the life policy's face amount and cash value untouched. Under the second, those benefits are linked to the face amount. Which pair of labels applies?

Contributory first, noncontributory second

Integrated first, independent second

Collateral first, absolute second

Independent first, integrated second

Question 38: An insured names his three adult children as equal primary beneficiaries and specifies a per stirpes distribution. One daughter dies before the insured, leaving two children of her own. When the insured later dies, how are the policy proceeds distributed?

The daughter's share passes to her children

Split evenly between the two surviving children

The entire benefit goes to the estate

The insurer selects a replacement beneficiary

Question 39: A producer is asked whether the two-year incontestability clause blocks an insurer from correcting a policy years later when it learns the insured understated her age on the application. Which of the following statements gives the producer the correct answer?

Yes, the clause bars any correction

Yes, unless fraud can be proven

No, age corrections are always permitted

No, but only within five years

Question 40: An application recorded the insured as forty years old when he was in fact forty-eight. The error surfaces after his death, well past the contestable period. Which of the following actions must the insurer take on the death benefit?

Reduce it to what premiums bought

Pay the full face amount anyway

Void the policy for misrepresentation

Refund all premiums to the estate

ILHI Indiana Life and Health Insurance Exam - Set 2 - Part 2