Ohio life insurance practice exam missed questions and answers part 6

What documentation grants express authority to an agent? a)Agent's contract with the principal b)Agent's insurance license c)Fiduciary contract d)State provisions

a) Agent's contract with the principal

Which of the following is true regarding examination of financial affairs of insurers? a)Examination expenses are the responsibility of the insurer. b)The Director must examine all insurers: domestic, foreign and alien. c)Examinations are conducted by the NAIC. d)Examinations must be conducted at least annually.

a) Examination expenses are the responsibility of the insurer.

An insured has a Level Term Life Insurance policy that is guaranteed renewable and also includes a re-entry provision. The re-entry provision would allow the insured to renew the policy and a)Pay a lower renewal premium by proving insurability. b)Change the type of insurance by proving insurability. c)Pay a lower renewal premium without evidence of insurability. d)Change the type of insurance without evidence of insurability.

a) Pay a lower renewal premium by proving insurability.

A Universal Life Insurance policy is best described as a/an a)Flexible Premium Variable Life policy. b)Annually Renewable Term policy with a cash value account. c)Variable Life with a cash value account. d)Whole Life policy with two premiums: target and minimum.

b) Annually Renewable Term policy with a cash value account.

Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member? a)Additional insured rider b)Family term rider c)Spouse rider d)Children's rider

b) Family term rider

In Ohio, all life insurance policy illustrations must include all of the following EXCEPT a)Initial death benefits. b)Name, age and sex of the insurance producer. c)Name of the insurer. d)Generic policy name, company product name, and form number.

b) Name, age, and sex of the insurance producer.

All of the following individuals may be exempt from the prelicensing education requirement for agents EXCEPT a)An applicant for a temporary insurance agent license. b)A person applying for a limited lines agent license. c)An applicant for a resident license who was previously licensed in another state and whose license lapsed 2 years ago. d)An agent who is currently licensed and in good standing in another state who is moving to this state.

c) An applicant for a resident license who was previously licensed in another state and whose licensed collapsed 2 years ago.

Which of the following best describes the aleatory nature of an insurance contract? a)Ambiguities are interpreted in favor of the insured b)Policies are submitted to the insurer on a take-it-or-leave-it basis c)Exchange of unequal values d)Only one of the parties being legally bound by the contract

c) Exchange of unequal values

Circulating deceptive sales material to the public is what type of Unfair Trade Practice? a)Coercion b)Misrepresentation c)False advertising d)Defamation

c) False advertising

Which of the following is NOT an example of a valid insurable interest? a)Business partners in each other's lives b)Employer in key employee's life c)Child in parents' lives d)Debtor in the life of the creditor

d) Debtor in the life of a creditor

If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select? a)Life with period certain b)Fixed amount c)Interest only d)Fixed period

d) Fixed period

If an insurer has fewer assets than liabilities and is unable to pay its financial obligations for at least 3 years, the insurer is considered a)Suspended. b)Bankrupt. c)Nonadmitted. d)Insolvent.

d) Insolvent.

Which of the following is NOT true regarding the accumulation period of an annuity? a)It is the period during which the annuity payments earn interest. b)It is the period over which the owner makes payments into an annuity. c)It is also known as the pay-in period. d)It would not occur in a deferred annuity.

d) It would not occur in a deferred annuity.

Which of the following best describes taxation during the accumulation period of an annuity? a)The growth is subject to immediate taxation. b)Taxes are deferred. c)The annuity is subject to state taxes only. d)The annuity is subject to both state and federal taxation.

b) Taxes are deferred.

Which of the following is NOT a characteristic of an insurable risk? a)The loss exposure must be large. b)The loss must be catastrophic. c)The loss must be due to chance. d)The loss must be measurable.

b) The loss must be catastrophic.

Which of the following is true regarding a market value adjusted annuity? a)It provides a level benefit payment. b)The owner is guaranteed a fixed interest rate for a specific period of time. c)The insurer bears all the market risk of changing interest rates. d)There are no penalties for a premature surrender of the annuity.

b) The owner is guaranteed a fixed interest rate for a specific period of time.

In a survivorship life policy, when does the insurer pay the death benefit? a)If the insured survives to age 100 b)Upon the last death c)Upon the first death d)Half at the first death, and half at the second death

b) Upon the last death

In order to qualify for conversion from a group life policy that has been terminated to an individual policy of the same coverage, a person must have been insured under the group plan for how many years? a)1 b)3 c)5 d)10

c) 5

A life insurance policy has a legal purpose if both of which of the following elements exist? a)Offer and counteroffer b)Policyowners and named beneficiaries c)Insurable interest and consent d)Underwriting and reciprocity

c) Insurable interest and consent

What are the two components of a universal policy? a)Mortality cost and interest b)Separate account and policy loans c)Insurance and cash account d)Insurance and investments

c) Insurance and cash account

On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of a)Unfair claim practice. b)Rebating. c)Misrepresentation. d)Concealment.

c) Misrepresentation.

During replacement of life insurance, a replacing insurer must do which of the following? a)Designate a new producer for a replaced policy b)Send a copy of the Notice Regarding Replacement to the Department of Insurance c)Obtain a list of all life insurance policies that will be replaced d)Guarantee a replacement for each existing policy

c) Obtain a list of all life insurance policies that will be replaced

If an employee wants to enter the group outside of the open enrollment period, to reduce adverse selection, the insurer may a)Prolong the open enrollment period. b)Increase medical requirements on existing members. c)Require evidence of insurability. d)Require a higher premium.

c) Require evidence of insurability.

Using a class designation for beneficiaries means a)Not naming beneficiaries. b)Naming an estate as the beneficiary. c)Naming each beneficiary by his or her name. d)Naming beneficiaries as a group.

d) Naming beneficiaries as a group.

Which of the following is NOT a characteristic of variable annuities? a)The contract owner bears the investment risk. b)Benefits are dependent on the performance of securities. c)The cash value is adjusted for inflation. d)They offer guaranteed stock performance.

d) They offer guaranteed stock performance.