Ohio life insurance exam missed questions and answers part 5

A producer who fails to separate premium monies from his own personal funds is guilty of a)Commingling. b)Larceny. c)Embezzlement. d)Theft.

a) Commingling

An individual insurance agent may operate as a viatical settlement broker without obtaining a separate license if the viatical settlement broker activities are incidental to the agent's business transactions, and if the agent has been licensed for life insurance for at least what time period? a)1 year b)3 years c)5 years d)10 years

c) 5 years

What is the tax consequence of amounts received from a Traditional IRA after the money was left in the tax-deferred account by the beneficiary? a)Income tax on distributions plus 10% penalty. b)Capital gains tax on distributions and no penalty. c)Capital gains tax on distributions plus 10% penalty. d)Income tax on distributions and no penalty.

d) Income tax on distributions and no penalty

Which is TRUE about the cash surrender nonforfeiture option? a)Funds exceeding the premium paid are taxable as ordinary income. b)After the cash surrender, the insured is covered for a grace period of one month. c)The policy remains active for some time after the policyholder opts for cash surrender. d)The policyholder receives the original cash value of the policy.

a) Funds exceeding the premium paid are taxable as ordinary income.

Which of the following statements about group life is correct? a)The cost of coverage is based on the ratio of men and women in the group. b)The premiums are higher than in an individual policy because there is no medical exam. c)The group sponsor receives a Certificate of Insurance. d)The policy can be converted to an individual term insurance policy.

a) The cost of coverage is based on the ratio of men and women in the group.

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

Which of the following is NOT true regarding policy loans? a)A policy loan may be repaid after the policy is surrendered. b)Money borrowed from the cash value is taxable. c)Policy loans can be repaid at death. d)An insurer can charge interest on outstanding policy loans.

b) Money borrowed from the cash value is taxable

Which nonforfeiture option provides coverage for the longest period of time? a)Accumulated at interest b)Reduced paid-up c)Extended term d)Paid-up option

b) Reduced paid-up

The initial amount of credit life insurance may NOT exceed a)The amount to be repaid under the contract. b)An amount set by statute and adjusted regularly for inflation. c)The borrower's monthly income. d)The borrower's annual income.

a) The amount to be repaid under the contract.

Contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as a)Contracts of adhesion. b)Unilateral contracts. c)Aleatory contracts. d)Binding contracts.

a) Contracts of adhesion.

Which Universal Life option has a gradually increasing cash value and a level death benefit? a)Option A b)Juvenile c)Term d)Option B

a) Option A

If a court ordered payment for a loss that was not covered in the policy even if it was clearly worded, it would be an example of which legal concept? a)Reasonable expectations b)Cease and desist c)Nonforfeiture d)Indemnity

a) Reasonable expectations

Events in which a person has both the chance of winning or losing are classified as a)Speculative risk. b)Insurable. c)Pure risk. d)Retained risk.

a) Speculative risk

A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as a)Survivor protection. b)Life planning. c)Survivorship insurance. d)Juvenile protection provision.

a) Survivorship protection.

All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT a)The employer pays a bonus to a selected employee to fund the policy. b)It is considered a nonqualified employee benefit. c)The policy is owned by the company. d)Any type of insurance policy may be used.

c) The policy is owned by the company

Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of a)Misrepresentation. b)Rebating. c)Twisting. d)Defamation.

c) Twisting

If an applicant for a life insurance policy is found to be a substandard risk, the insurance company is most likely to a)Lower its insurability standards. b)Refuse to issue the policy. c)Charge a higher premium. d)Require a yearly medical examination.

c) Charge a higher premium.

A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. Which policy is that? a)Second-to-Die b)Family Income Policy c)Joint Life Policy d)Survivorship Life Policy

c) Joint Life Policy

An insured has a continuous premium whole life policy. She would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she use? a)Reduction of premium b)Accumulation at interest c)Paid-up option d)One-year term

c) Paid-up option

What kind of policy allows withdrawals or partial surrenders? a)Term policy b)Variable whole life c)Universal life d)20-pay life

c) Universal life

How must a replacing producer respond to an applicant wishing to replace existing life insurance? a)The producer must collect the existing policies and turn them over to the replacing insurer. b)The producer must request the permission of the existing insurer. c)The producer has no specific duties. d)The producer must provide the applicant with a Notice Regarding Replacement.

d) The producer must provide the applicant with a Notice Regarding Replacement.