INDIANA LIFE INSURANCE EXAM

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INDIANA LIFE INSURANCE EXAM

QUESTIONS & ANSWERS

CORRECTLY ANSWERED.

Question : Which of the following is NOT a characteristic

of a Variable Annuity?

• Premium Payments may be level or flexible or single

premium

• The cash values are invested in securities.
• The non-forfeiture values will provide for the return of

the cash value should the annuitant die during the accumulation period.

• It provides for a tax-free death benefit.

Correct answer: D. It provides for a tax-free death benefit.

Question : All of the following policies provide for the

tax deferred accumulation of cash value EXCEPT:

• Interest Sensitive Whole Life
• Single Premium Variable Annuity
• Variable Universal Life

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• Term Life

Correct answer: D. Term Life

Question : All of the following are true statements about

the taxation of life insurance benefits except:

• Policy loans are taxed as ordinary income
• The cash value in a life insurance policy grows on a

tax deferred basis.

• The interest earned on the "interest" Settlement Option

is taxed as ordinary income.

• The death benefit of a life policy is received by the

beneficiary federal income tax free.

Correct answer: A. Policy loans are taxed as ordinary

income

Question : Which of the following statements is true

about the Group Life conversion privilege?

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• Death during the conversion period is covered even if

the departing employee chooses NOT to convert to an individual policy.

• The departing employee must pay the premium if they

elect to be covered during the conversion period.

• If a departing employee elects to convert their life

insurance, the company must offer Term insurance as a choice.

• Under the COBRA laws a departing employee may

elect to remain a member of the Group Life plan for a limited period of time.

Correct answer: A. Death during the conversion period is

covered even if the departing employee chooses NOT to convert to an individual policy.

Question : Which of the following is a combination of

Decreasing Term and Whole Life?

• Family Income Policy
• Family Maintenance Policy
• Modified Life

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• Family Policy

Correct answer: A. Family Income Policy

Question : A type of Annuity in which the cash values are

invested in securities is called:

• Variable
• Deferred
• Joint and Survivorship
• Flexible premium

Correct answer: Variable

Question : Mary is receiving an annuity payout from her

Variable Straight Life Annuity. Upon her death, which of the following will be payable to her estate?

• Nothing
• The policy death benefit
• The remaining value of her account