Ohio Life Insurance License practice exam missed questions and answers
Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce a)Without receiving written consent from an insurance regulatory authority. b)Under any circumstances. c)Unless they have served an appropriate prison sentence. d)Without receiving written consent from a Federal Judge.
a) Without receiving written consent from an insurance regulatory authority
The automatic premium loan provision is activated at the end of the a)Free-look period b)Elimination period. c)Policy period. d)Grace period.
d) Grace period
Which authority is NOT stated in an agent's contract but is required for the agent to conduct business? a)Apparent b)Assumed c)Express d)Implied
d) Implied
Who is a person, other than a viator, that enters into a viatical settlement contract? a)Purchaser b)Effectuator c)Broker d)Provider
d) Provider
Stranger-originated life insurance policies are in direct opposition to the principle of a)Insurable interest. b)Law of large numbers. c)Good faith. d)Indemnity.
a) Insurable interest
Which of the following is NOT true regarding a Variable Universal Life policy? a)The death benefit is fixed. b)The policyowner can participate in some of the investment decisions. c)The minimum death benefit is guaranteed. d)The cash values are not guaranteed.
a) The death benefit is fixed
An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT? a)The insured may choose to convert to term or permanent individual coverage. b)The insured would not need to prove insurability for a conversion policy. c)The insured may convert coverage to an individual policy within 31 days. d)The premium for individual coverage will be based upon the insured's attained age.
a) The insured may choose to convert to term or permanent individual coverage
According to the Entire Contract provision, a policy must contain a)Listing of the insured's former insurer(s) for incontestability provisions. b)A copy of the original application for insurance. c)A declarations page with a summary of insureds. d)Buyer's guide to life insurance.
b) A copy of the original application for insurance
Level term insurance provides a level death benefit and a level premium during the policy term. If the policy renews at the end of a specified period of time, the policy premium will be a)Discounted. b)Adjusted to the insured's age at the time of renewal. c)Determined by the health of the insured. d)Based on the issue age of the insured.
b) Adjusted to the insured's age at the time of renewal
In an Adjustable Life policy all of the following can be changed by the policy owner EXCEPT a)The length of coverage. b)The premium. c)The amount of insurance. d)The type of investment.
d) The type of investment
If a policy has an automatic premium loan provision, what happens if the insured dies before the loan is paid back? a)The policy beneficiary receives the full death benefit. b)The policy beneficiary takes over the loan payments. c)The policy is rendered null and void. d)The balance of the loan will be taken out of the death benefit.
d) The balance of the loan will be taken out of the death benefit
The hearing for a cease and desist order must occur within how many days of the order date? a)15 b)30 c)45 d)60
a) 15
The LEAST expensive first-year premium is found in which of the following policies? a)Annually Renewable Term b)Increasing Term c)Decreasing Term d)Level Term
a) Annually Renewable Term
The validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years? a)1 year b)3 years c)5 years d)7 years
b) 3 years
If an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a a)Rollover. b)Settlement option. c)Nontaxable exchange. d)Nonforfeiture option.
b) Settlement option
An insured owns a life insurance policy. To be able to pay some of her medical bills, she withdraws a portion of the policy's cash value. There is a limit for a withdrawal and the insurer charges a fee. What type of policy does the insured most likely have? a)Term life b)Limited pay c)Universal life d)Adjustable life
c) Universal Life
How are state Insurance Guaranty Associations funded? a)By the Department of Insurance b)By NAIC c)By the Government d)By their members - authorized insurers
d) By their members - authorized insurers
Which of the following will NOT be an appropriate use of a deferred annuity? a)Accumulating retirement funds b)Accumulating funds in an IRA c)Funding a child's college education d)Creating an estate
d) Creating an estate
If an insured changes his payment plan from monthly to annually, what happens to the total premium? a)Stays the same b)Doubles c)Increases d)Decreases
d) Decreases
An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries? a)The beneficiary will receive 2/3 of the lump sum up front, and the remaining 1/3 will be paid over time. b)The beneficiary will receive 2/3 of the total benefit, with the final 1/3 payable when the first beneficiary dies. c)One of the beneficiaries will receive 1/3 and the other 2/3 of the proceeds when the insured dies. d)The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.
d) The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive
Which of the following is TRUE about credit life insurance? a)Creditor is the policyowner. b)Debtor is the annuitant. c)Creditor is the insured. d)Debtor is the policy beneficiary.
a) Creditor is the policyowner
Which of the following is NOT correct regarding false statements by a person engaged in the business of insurance? a)False statements about financial condition of an insurer are unlawful. b)Statements made with the intent to deceive are unlawful. c)Only written statements can be considered fraud. d)Omissions of material fact on insurance application are fraud.
c) Only written statements can be considered fraud
If an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a a)Settlement option. b)Nontaxable exchange c)Nonforfeiture option d)Rollover.
a) settlement option
Which of the following is correct concerning the taxation of premiums in a key-person life insurance policy? a)Premiums are taxable to the employee. b)Premiums are not tax deductible as a business expense. c)Premiums are tax deductible by the key employee. d)Premiums are tax deductible as a business expense.
b) Premiums are not tax deductible as a business expense
Which of the following is a true comparison between annuities and life insurance? a)Both provide a lifetime income. b)Neither annuities nor life insurance subject to income taxes. c)Both annuities and life insurance use mortality tables. d)Annuities serve the same function as life insurance.
c) Both annuities and life insurance use mortality tables
In a direct transfer, how is money transferred from one retirement plan to a traditional IRA? a)From the participant to the new plan b)From the original plan to the original custodian c)From trustee to trustee d)From trustee to the participant
c) From trustee to trustee
Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary? a)Single life b)Fixed-amount c)Life income with period certain d)Joint and survivor
c) Life income with period certain
Which nonforfeiture option has the highest amount of insurance protection? a)Conversion b)Decreasing Term c)Reduced Paid-up d)Extended Term
d) Extended Term
What part of the Internal Revenue Code allows an owner of a life insurance policy or annuity to exchange or replace their current contract with another contract without creating adverse tax consequences? a)Section 1035 Policy Exchange b)Modified Endowment Exchange c)401(k) Plan) d)Section 457 Deferred Compensation Plan
a) Section 1035 Policy Exchange
Which of the following terms is used to name the nontaxed return of unused premiums? a)Dividend b)Premium return c)Interest d)Surrender
a) Dividend
Which of the following is NOT true regarding a Certificate of Authority? a)It is issued to group insurance participants. b)It may be necessary for transacting business in a specific state. c)It is equivalent to an insurance license. d)It is issued by the state department of insurance.
a) It is issued to group insurance participants
The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose? a)Fixed amount option b)Interest only option c)Life income with period certain d)Joint and survivor
b) Interest only option
Traditional IRA contributions are tax deductible based on which of the following? a)Owner's age b)IRA limit c)Owner's income d)How long the plan has been in force
c) Owner's income
Which of the following statements is correct about a standard risk classification in the same age group and with similar lifestyles? a)Standard risk requires extra rating. b)Standard risk is also known as high exposure risk. c)Standard risk is representative of the majority of people. d)Standard risk pays a higher premium than a substandard risk.
c) Standard risk is representative of the majority of people
Which of the following policies would be classified as a traditional level premium contract? a)Universal Life b)Variable Universal Life c)Straight Life d)Adjustable Life
c) Straight Life
In a fixed annuity, which of the following is true regarding the guaranteed interest rate on the investment?a)The annuitant will receive the lower of either the guaranteed minimum rate or current rate.b)The annuitant will only receive the guaranteed minimum specified in the contract.c)The annuitant will receive the higher of either the guaranteed minimum rate or current rate.d)The annuitant will always receive the current interest rate.
c) The annuitant will receive the higher of either the guaranteed minimum rate or current rate
Which of the following terms describes making false statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance? a)Undercutting b)Twisting c)Slandering d)Defamation
d) Defamation
Regarding the free-look provision, the insurance company a)Cannot charge a premium after 10 days. b)Must issue a free policy for 30/31 days. c)Must issue a free policy for 10 days. d)Must allow the policyowner to return the policy for a full refund.
d) Must allow the policyowner to return the policy for a full refund
Pertaining to insurance, which of the following is an example of a producer's fiduciary responsibility? a)Helping insureds to file claims b)Performing reviews of insured's coverage c)Offering additional coverage to insureds d)Promptly forwarding premiums to the insurance company
d) Promptly forwarding premiums to the insurance company
Under which installments option does the annuitant select the amount of each payment, and the insurer determines how long they will pay benefits? a)Variable amount b)Fixed period c)Fixed amount d)Variable period
c) Fixed amount
If the annuitant dies during the accumulation period, who will receive the annuity benefits? a)The annuity owner b)The insurance company c)The annuitant's estate d)The beneficiary
d) The beneficiary
An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective date? a)The date of medical exam b)The date of policy delivery c)The date of issue d)The date of application
a) The date of medical exam
All of the following are characteristics of a group life insurance plan EXCEPT a)There is a requirement to prove insurability on the part of the participants. b)The participants receive a Certificate of Insurance as their proof of insurance. c)A minimum number of participants is required in order to underwrite the plan. d)The cost of the plan is determined by the average age of the group.
a) There is a requirement to prove insurability on the part of the participants
What is the maximum allowed value of a promotional item a producer can offer a customer without violating inducement regulations? a)$25 b)$50 c)$100 d)$200
b) $50
After being penalized previously for making false statements on advertisements regarding the insurer's financial condition, the insurer continues to knowingly commit the same offense. What is the maximum penalty that may be imposed on the insurer? a)$500 b)$1,000 c)$5,000 d)$10,000
b) 1,000$
What type of insurance would be used for a Return of Premium rider? a)Annually Renewable Term b)Increasing Term c)Level Term d)Decreasing Term
b) Increasing term
An insurance company receives an application with some information missing and issues the policy anyway. What is this called? a)Subrogation b)Aleatory c)Waiver d)Estoppel
c) Waiver
Which of the following is another term for an authorized insurer? a)Certified b)Licensed c)Legal d)Admitted
d) Admitted
Which of the following is NOT true regarding a temporary license in this state? a)It can be issued to a designee when a licensed agent enters active U.S. military service. b)It can be issued to a spouse of the deceased agent. c)It does not require a written examination. d)It will continue for 180 days even if the owner disposes of the business.
d) It will continue for 180 days even if the owner disposes of the business
The Director may examine books and records of all authorized insurers in Ohio. Who is responsible for paying for the examination? a)The Department of Insurance b)The NAIC c)The Director d)The insurer
d) The insurer
