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Ohio Life Health Insurance Student’s Study
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Which statement best describes the tax responsibilities under a Business Overhead policy? - ✔✔Premiums are deductible, benefits are taxed In which type of insurance company may stockholders share in the profits and losses of the insurer? - ✔✔Stock In which company may policy owners receive policy dividends when there is a profit? - ✔✔mutual The law of large numbers states that - ✔✔Predictions become more accurate as the number of units being considered increases Premiums paid by sole proprietors for Individual Health Insurance coverage are - ✔✔Fully deductible In Group Health Insurance, the contract is between the - ✔✔Employer and the insurance company An agent is a representative of the - ✔✔Insurance company What statement is TRUE regarding an agent sharing commissions? - ✔✔An agent may share commissions with another agent who is licensed for that line of insurance
- Ohio Small Group policies may cover a maximum of people? - ✔✔
An insurance agent license in Ohio must be renewed every year(s) - ✔✔ 2 For how long may a temporary insurance agent license be issued? - ✔✔Up to 180 days A customer who wants coverage for medical bills for a broken leg should buy - ✔✔Medical Expense Regarding Disability Income benefits under Social Security, - ✔✔The claimant must not be able to perform any substantial, gainful work Ohio Small Group policies may cover a minimum of people. - ✔✔ 2 A Medicare Part A claim begins on the date of - ✔✔Hospitalization Under the Legal Actions provision, the insured cannot sue for non-payment of a valid claim until after 60 days, in order to - ✔✔Give the insurer time to investigate the claim Premiums paid for Individual Disability Income policies are - ✔✔Not tax deductible Key Employee Disability Income Insurance - ✔✔Is a form of 3rd party ownership Regarding continuation of Health Insurance after termination of employment at a company with more than 20 employees, - ✔✔It is also referred to as the COBRA regulation
The reinstatement provision - ✔✔Requires the policy owner to pay all premiums in arrears for the policy to be reinstated. Qualified retirement plans such as a 401 (k) are set up by employers to benefit their employees. Sometimes annuities are chosen as the funding vehicle. Which of the following is true about qualified plans or annuities that fund them? - ✔✔If an annuity is used, it can be an individual or group annuity contract A beneficiary designation that reads, "Jane, my wife, only if she survives me by 30 days," is an example of which clauses? - ✔✔Common Disaster In insurance, the principle of making someone whole after a loss by paying only for the actual losses is called - ✔✔Indemnity Which statement is FALSE about the replacement of Life Insurance? a. Agents must review the existing policy prior to replacement to see if it contains any limitations b. Replacement is illegal c. Replacement to the detriment of the client is illegal d. Special forms must be given to clients electing to replace coverage - ✔✔b. Replacement is illegal Which of the following is NOT a true statement about advertising? a. The agent controls who will receive the advertising b. The company cannot control who receives the advertising c. Deceptive practices are prohibited d. Direct mail is advertising - ✔✔The agent controls who will receive the advertising What type of insurance consists of an unincorporated group of persons that provides insurance among themselves through an exchange of indemnity agreements? - ✔✔Reciprocal Insurer
b. The applicant must have an interest in protecting what is insured c. The applicant must not have a potential for gain because of the insurance d. The applicant must not share the interest with anyone else - ✔✔d. The applicant must not share the interest with anyone else Which statement about an Equity Indexed Annuity is NOT true? a. The benefits may be linked to a bond index b. The benefits may be linked to a stock index c. Since the funds are based on an investment index, it is possible to lose all the money in the fund d. There is a guaranteed minimum interest rate - ✔✔c. Since the funds are based on an investment index, it is possible to lose all the money in the fund An agent engaging in the unfair and deceptive act of providing false information as to the financial condition of an insurer is guilty of the unfair trade practice of - ✔✔Defamation An agent who issues estimates or illustrations that are false or misleading may be guilty of - ✔✔Misrepresentation Which statement is NOT true about Immediate Annuities? a. There is not accumulation period b. There is no cost basis for the annuitant c. They are used in structured settlements d. They can provide a lifetime payout - ✔✔b. There is no cost basis for the annuitant
When an insurance applicant makes a statement on an application that becomes part of the contract, the statement by the insured is considered to be - ✔✔Representations The Annuity benefit to be paid to the beneficiary at the death of the life income annuitant is - ✔✔Zero A person who gives something of value to induce a prospect to purchase from that person is guilty of the unfair trade practice of - ✔✔Rebating Because an insurer writes the policy language and the insured has little or no control over the content, any ambiguity in the wording is usually resolved in favor of the insured. As the design and wording of a policy are in the hands of the insurer, insurance policies are said to be - ✔✔Contracts of adhesion In the formation of a legal contract, each party must give something of value. Under contract law, this is referred to as - ✔✔Consideration The inability of a company to pay its obligations when due is known as - ✔✔Insolvency Lynn buys an annuity naming Gerry and Chris as co-annuitants. Whose signature would be required to take a cash surrender? - ✔✔Lynn Which element is NOT necessary for formation of a legally valid contract? Agreement Offer
Taxes on accumulated interest in the cash value account of a Whole Life policy, if required, are due - ✔✔Upon cash surrender Under contract law, the actions by a party may intentionally and voluntarily give up a known right. When this occurs, it is known as a - ✔✔Wavier Universal Life policies do NOT provide which of the following? a. The cash value invested in a separate account. b. The choice of fixed or level premiums c. Flexibility in premium payments d. A minimum guaranteed interest rate on the cash value - ✔✔a. The cash value invested in a separate account. When determining the amount of Life Insurance a client needs, it is NOT necessary to consider a. Child's education b. Final Expenses c. Mortgage payoff d. Self-maintenance costs - ✔✔d. Self-maintenance costs If the Superintendent believes that an agent is violating an insurance regulation and that violation is about to cause substantial and material harm, the Superintendent may issues a(n) - ✔✔Cease and desist order Which statement does NOT accurately describe accelerated benefits?
a. Accelerated benefits are added as a rider to some policies, but built into others as a provision b. Accelerated benefits are treated as a policy loan c. Accelerated benefits pay a portion of the death benefit prior to death of the insured d. Accelerated benefits reduce the amount payable to the beneficiary - ✔✔b. Accelerated benefits are treated as a policy loan When an insured sells or assigns a Life Insurance policy to another party to get money to pay for terminal expenses, it is known as a(n) - ✔✔Viatical settlement To calculate a net single premium, a Life Insurance company would subtract which of the following from the cost of mortality? - ✔✔Interest An agent's obligation to act in an insurance applicant's or insured's best interest, based on the faith and trust placed on the agent by the insurance-buying public, is known as - ✔✔A fiduciary duty Which statement about annuities is NOT correct? a. The annuitant cannot outlive the income from a Life Annuity b. Annuities are tax deferred during the pay-in period c. Annuities are used to create an estate for the insured's family d. Deferred interest is taxable as ordinary income upon receipt - ✔✔c. Annuities are used to create an estate for the insured's family Each person issued an agent license shall complete hours of continuing education for each biennial license renewal. - ✔✔ 24
a. The applicant has a longer-than-average life expectancy b. Because it is preferred, the cash value will grow faster than a policy with standard rates c. The premium will be discounted from the standard rates d. The premiums will be lower than for an applicant who uses tobacco - ✔✔b. Because it is preferred, the cash value will grow faster than a policy with standard rates Which person does NOT have an insurable interest? a. Business Partner b. Creditor upon the life of a debtor c. Key person d. Son-in-law on the life of his father-in-law - ✔✔Son-in-law on the life of his father-in-law What type of insurance best protects a 30 - year mortgage obligation? - ✔✔Decreasing Term Which statement regarding speculative risk is FALSE? a. It involves a possibility of gain b. It involves an uncertainty of loss c. It is a feature of gambling d. It is a feature of insurance - ✔✔d. It is a feature of insurance A Life Insurance customer misstates his age as being five years younger than he really is. The rate he pays is $13 per $1,000 of coverage, but the correct rate is $15 per $1,000. If he dies, how much will the insurer pay? - ✔✔ 13 /15 of the face amount purchased
Under the Uniform Provision Law, which provision is optional for an A&H policy? - ✔✔Change of Occupation The Legal Action provision of a Health policy requires that - ✔✔An insured waits at least 60 days after submission of proof of loss before initiating a lawsuit In a Disability policy, an elimination period provision refers to the period - ✔✔Between the 1st day of disability and the day to which the disability must continue before it can result in the insured becoming eligible to receive any benefits The right of an employee to exchange Group Insurance for an Individual policy within 31 days from termination of employment is provided by the provision. - ✔✔Conversion The waiting period before a qualified person can receive Social Security disability benefits is - ✔✔Five full months Which of the following is NOT true about the Life and Disability Insurance Fund? a. Agents cannot use the Fund as a reason to buy insurance b. The Fund pays claims for insolvent insurers c. The fund pays up to $100,000 in qualifying claims d. The fund will pay a maximum of $500,000 per year per claimant - ✔✔c. The fund pays up to $100,000 in qualifying claims Which statement is NOT true about coverage under the Affordable Care Act? a. The insurer is not allowed to impose pre-existing exclusions
to maintain an agent's license - ✔✔Twenty-four hours of approved coursework, either self- study or classroom, must be completed biennially Long-Term Care policies must be at least - ✔✔guaranteed renewable includes fillings, inlays, and crowns - ✔✔Restorative care covers bridgework - ✔✔prosthodontics covers treatment of gum problems - ✔✔periodontics covers root canals - ✔✔endodontics covers braces on the teeth - ✔✔orthodontics noncontributory plan requires - ✔✔100% of all eligible participants contributory plan - ✔✔needs 75% enrollment to avoid adverse selection HIPAA states that Group Health policies must - ✔✔give credit for previous periods of coverage with no pre-existing conditions imposed when an employee moves from one group to another, as long as there was no break in coverage greater than 63 days.
when an employee moves from one group to another - ✔✔as long as there was no break in coverage greater than 63 days, there are no pre-existing conditions imposed means one cannot do the duties of their own job at the time of the disability - ✔✔"Own-Occ" means you are incapable of doing any job for which you are reasonably suited by education, training, or experience - ✔✔"Any-Occ" if a child is born out of wedlock, not claimed as a dependent on the parent's tax return, or does not reside with the parent or in the insurer's service area - ✔✔insurers cant deny them coverage any condition, physical or mental, regardless of the cause of the conditions for which medical advice, diagnosis, care, or treatment was given within the period of time listed in the policy. - ✔✔Pre-existing should apply only when the insured's intentional act and the harm caused by that act are intrinsically tied so that the act has necessarily resulted in the harm - ✔✔Coverage for intentional acts After applying for reinstatement, the applicant will be automatically reinstated after unless rejected or approved sooner. There is a probationary period for sickness, but accidents are covered immediately. - ✔✔ 45 days; 10 - day A Conditionally Renewable Policy - ✔✔must be renewed if certain specified conditions are met.
the grace period is seven days - ✔✔if the premium is paid weekly the grace period is ten days - ✔✔If a premium is paid monthly the grace period is 31 days - ✔✔If a premium mode is anything else buys insurance policies from people with terminal illnesses and sell them to investors. - ✔✔Viatical firms A viator is the owner of a life insurance policy and transferred ownership by a agreed to by and through a. - ✔✔viatical settlement contract ; the viator; the viatical settlement provider; viatical settlement broker The "free look" on a Life policy that is part of a replacement sale is - ✔✔ 30 days A son-in-law does not have an insurable interest on - ✔✔his father-in-law A "trustee to trustee" transfer eliminates - ✔✔the 20% withholding tax requirement usually for large groups only. Rates are based on the claims experience of the specific company
Ohio requires a free look on non-replacement policies - ✔✔ 10 - day Ohio requires a free look on replacement policies - ✔✔ 30 - day a fixed rate for the term the owner chooses. When held to maturity, the owner gets their principle and interest. If the owner decides to withdraw prior to the maturity, the owner will get less if current rates are higher but may get more if current rates are lower. - ✔✔Market Value Adjusted Annuities law of large numbers - ✔✔allows insurers to predict claims more accurately. Term insurance may be converted to - ✔✔Whole Life, but not the reverse. Conversion is based on the client's current age, which may also be called "attained age." attained age - ✔✔the client's age when buying a policy
