Ohio Life insurance missed practice test questions and answers part 3
In insurance, an offer is usually made when a)An applicant submits an application to the insurer. b)The insurer approves the application and receives the initial premium. c)The agent hands the policy to the policyholder. d)An agent explains a policy to a potential applicant.
a) An applicant submits an application to the insurer.
What limits the amount that a policyowner may borrow from a whole life insurance policy? a)Cash value b)Premiums paid c)Amount stated in the policy d)Face amount
a) Cash Value
When an employer offers to give an employee a wage increase in the amount of the premium on a new life insurance policy, this is called a(n) a)Executive bonus. b)Key person policy. c)Fraternal association. d)Aleatory contract.
a) Executive bonus
Which of the following may NOT be included in an insurance company's advertisement? a)That its policies are covered by a state Guaranty Association b)The policies' limitations or exclusions c)The name of a specific agent d)An identification of a limited policy as a limited policy
a) That its policies are covered by a state Guaranty Association
An insured receives an annual life insurance dividend check. What term best describes this arrangement? a)Accumulation at Interest b)Cash option c)Reduction of Premium d)Annual Dividend Provision
b) Cash option
The provision which states that both the policy and a copy of the application form the contract between the policyowner and the insurer is called the a)Complete contract. b)Entire contract. c)Total contract. d)Aleatory contract.
b) Entire contract.
The authority granted to an agent through the agent's contract is referred to as a)Absolute authority. b)Express authority. c)Apparent authority. d)Implied authority.
b) Express authority
An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. What kind of policy is it? a)Limited-pay Life b)Variable Life c)Adjustable Life d)Graded Premium Life
a) Limited-pay Life
An annuitant dies before the effective date of a purchased annuity. Assuming that the annuitant's wife is the beneficiary, what will occur? a)The interest will continue to accumulate tax deferred. b)The interest will become immediately taxable. c)The premiums will increase. d)The premiums will decrease.
a) The interest will continue to accumulate tax deferred
In Ohio, a temporary license may be issued for any of the following reasons EXCEPT a)Agent's disability. b)Agent's military service. c)Agent's retirement. d)Agent's death.
c) Agent's retirement
An underwriter is reviewing the medical questions in the application and needs further information due to a medical situation the applicant had in the past. What will the underwriter require? a)Sworn health affidavit from the applicant b)Statement of Continued Good Health c)Attending Physician Statement d)A complete medical record
c) Attending Physician Statement
How often must the Director examine financial affairs of domestic insurers? a)Every year b)Every 2 years c)Every 3 years d)Every 5 years
c) Every3 years
Which of the following insurers are owned by stockholders? a)Reciprocal b)Fraternal c)Stock d)Mutual
c) Stock
What happens if a deferred annuity is surrendered before the annuitization period? a)The insurer can only apply the surrender value toward another annuity. b)Deferred annuities cannot be surrendered prior to the annuitization period. c)The owner will receive the surrender value of the annuity. d)The owner will only receive a refund of premium.
c) The owner will receive the surrender value of the annuity
Under what circumstances may a life insurance agent deliver a policy that is dated up to 6 months before the application was taken? a)To make a policy effective during a period when the agent's appointment was in force b)To shorten the period of contestability c)To avoid an increase in premium rate for the insured d)To meet sales quotas established by the insurer
c) To avoid an increase in premium rate for the insured
What type of tax is associated with death proceeds from a life insurance policy? a)Personal tax b)State tax c)Income tax d)Federal estate tax
d) Federal estate tax
Which of the following statements regarding HIV testing for life insurance purposes is NOT true? a)Positive test results will be forwarded to the state's Department of Health if a physician is not selected by the applicant. b)The testing practices must meet the criteria of the U.S. Department of Health and Human Services. c)HIV testing is regulated at the state level. d)Insurers are barred from requesting HIV testing.
d) Insurers are barred from requesting HIV testing
Statements made by an applicant for a life insurance policy which are true to the best of one's knowledge are referred to as a)Facts. b)Warranties. c)Information. d)Representations.
d) Representations
All of the following are requirements for life insurance illustrations EXCEPT a)They may only be used as approved. b)They must identify nonguaranteed values. c)They must differentiate between guaranteed and projected amounts. d)They must be part of the contract.
d) They must be part of the contract
The paid-up addition option uses the dividend a)To purchase a one-year term insurance in the amount of the cash value. b)To reduce the next year's premium. c)To accumulate additional savings for retirement. d)To purchase a smaller amount of the same type of insurance as the original policy.
d) To purchase a smaller amount of the same type of insurance as the original policy
Which of the following Life Insurance policies would be considered interest sensitive? a)Adjustable life b)Whole life c)Increasing term d)Universal life
d) Universal life
Which of the following is NOT allowed in credit life insurance? a)Creditor requiring that a debtor buys insurance from a certain insurer b)Creditor having a collateral assignment on the policy c)Creditor requiring that a debtor has a life insurance d)Creditor becoming a policy beneficiary
a) Creditor requiring that a debtor buys insurance from a certain insurer
Which of the following riders added to a life insurance policy can pay part of the death benefit to the insured to cover expenses incurred in a nursing or convalescent home? a)Long-term care b)Accidental death c)Guaranteed insurability d)Payor benefit
a) Long-term care
Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid a)For 20 years or until death, whichever occurs first. b)Until the policyowner reaches age 65. c)For at least 20 years. d)Until the policyowner's age 100, when the policy matures.
a) For 20 years or until death, whichever occurs first
Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured? a)Option B b)Corridor option c)Variable option d)Option A
a) Option B
A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy a)Required a premium increase each renewal. b)Built cash values. c)Required proof of insurability every year. d)Decreased death benefit at each renewal.
a) Required a premium increase each renewal
Upon the submission of a death claim under a life insurance policy, when should the insurer pay the policy benefit? a)On the next anniversary of the policy b)After the estate of the insured has been settled c)Within 2 years of the date of loss d)Immediately after receiving written proof of loss
d) Immediately after receiving written proof of loss
Under which of the following annuity options does the annuitant select the time period for the benefits, and the insurer determines how much each payment will be? a)Installments for a fixed amount b)Installment refund c)Cash refund d)Installments for a fixed period
d) Installments for a fixed period
Which of the following best describes a misrepresentation? a)Making a deceptive or untrue statement about a person engaged in the insurance business b)Making a maliciously critical statement that is intended to injure another person c)Discriminating among individuals of the same insuring class d)Issuing sales material with exaggerated statements about policy benefits
d) Issuing sales material with exaggerated statements about policy benefits
Which of the following best describes the unfair trade practice of defamation? a)Assuming the name and identity of another person b)Issuing false advertising material c)Refusing to deal with other insurers d)Making derogatory oral statements about another insurer's financial condition
d) Making derogatory oral statements about another insurer's financial condition
Which of the following is true regarding examination of financial affairs of insurers? a)Examinations must be conducted at least annually. b)Examination expenses are the responsibility of the insurer. c)The Director must examine all insurers: domestic, foreign and alien. d)Examinations are conducted by the NAIC.
b) Examination expenses are the responsibility of the insurer
Which of the following is NOT true about a joint and survivor annuity benefit option? a)The surviving annuitant may receive reduced payments. b)Payments stop after the first death among the annuitants. c)A period certain option may be included. d)This option guarantees income for two or more recipients.
b) Payments stop after the first death among the annuitants
Which of the following determines the length of time that benefits will be received under the Fixed-Amount settlement option? a)Amount of interest b)Size of each installment c)Predetermined length of time stated in the contract d)Length of income period
b) Size of each installment
Which of the following is NOT true of Section 1035 Policy Exchanges? a)It is an IRS Code which permits like kind exchanges of property. b)It is typically used when exchanging or replacing a less competitive life policy with a more competitive life policy. c)Any exchange made under Section 1035 of the Internal Revenue Code must be completed within 30 days. d)It requires an absolute assignment of the existing policy to the replacing company who surrenders the contract and issues a replacement policy.
c) Any exchange made under Section 1035 of the Internal Revenue Code must be completed within 30 days.
Which of the following is correct regarding credit life insurance? a)It insures the life of a creditor. b)It has a maximum term of 20 years. c)It insures the life of a debtor. d)It is purchased on an installment basis.
c) It insures the life of the debtor
A rider attached to a life insurance policy that provides coverage on the insured's family members is called the a)Juvenile rider. b)Payor rider. c)Other-insured rider. d)Change of insured rider.
c) Other-insured rider.
During the accumulation period in a nonqualified annuity, what are the tax consequences of a withdrawal? a)Both interest and principal are taxed; no other penalties are imposed. b)Neither interest nor principal is taxed, but penalties may be imposed. c)Taxable interest will be withdrawn first and the 10% penalty will be imposed if under age 59 ½. d)Nontaxable principal may be withdrawn first, but the 10% penalty will be imposed if under age 59 ½.
c) Taxable interest will be withdrawn first and the 10% penalty will be imposed if under age 59 1/2
A viatical settlement is arranged between a viatical company and a/an a)Beneficiary. b)Lender. c)Terminally ill insured. d)Insurance producer.
c) Terminally ill insured
The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change? a)The death benefit can be increased only when the policy has developed a cash value. b)The death benefit can be increased only by exchanging the existing policy for a new one. c)The death benefit can be increased by providing evidence of insurability. d)The death benefit cannot be increased.
c) The death benefit can be increased by providing evidence of insurability