OHIO LIFE INSURANCE 2026 EXAM MANUAL QUESTIONS
AND SOLUTIONS RATED A+
✔✔Variable life insurance and annuities: - ✔✔Are contracts in which the cash values
accumulate based upon a specific portfolio of stocks without guarantees of
performance.
✔✔Group Life insurance: - ✔✔Written as a master policy covering the lives of more
than one individual covered under the single master policy
✔✔Illustration: - ✔✔A presentation or depiction that includes non-guaranteed elements
of a policy of individual or group life insurance over a period of years.
✔✔Life insurance illustration must: - ✔✔Distinguish between guaranteed and projected
amounts, clearly state that an illustration is not a part of the contract, and identify those
values that are not guaranteed as such.
✔✔Buyer's Guide: - ✔✔A document that explains how a buyer should go about
choosing the amount and type of insurance to buy, and how a buyer can save money by
comparing the costs of similar policies.
Language is approved by department of insurance
✔✔Policy Summery: - ✔✔A written statement describing the features and elements of
the policy being issued.
✔✔Disclosure rule: - ✔✔Applies to any solicitation, negotiation or procurement of life
insurance or annuities occurring within this state.
✔✔Ohio Life and Health Insurance Guaranty Association: - ✔✔Must create a disclosure
document describing their general purposes and current limitations.
Maintains 2 separate accounts: Life insurance and annuity account, and the health
insurance account.
✔✔Unfair trade practice: - ✔✔Occurs when making any statement that an insurer's
policies are guaranteed by the existence of the Insurance Guaranty Association
✔✔Replacement: - ✔✔A practice of terminating an existing policy or letting it lapse, and
obtaining a new one.
✔✔Replacing insurer and existing insurer: - ✔✔Replacing is the company that issues
the new policy. Existing is the company whose policy is being replaced.
,✔✔Underwriting: - ✔✔The risk selection and classification process. Involves a careful
analysis of many different factors to determine the acceptability of applicants for
insurance.
✔✔Field underwriter: - ✔✔This is what the agent is referred to as in the company
because the agent is usually the one who has solicited the potential insured.
✔✔The application: - ✔✔Is the starting point and basic source of information used by
the company in the risk selection process. When smaller amounts of insurance are
requested and there is no prior medical history of concern, the home office underwriter
may make an underwriting decision solely on the basis of the application.
✔✔Agents report: - ✔✔Provides the agent's personal observations concerning the
proposed insured.
✔✔Premium Receipt: - ✔✔Must be issued whenever the agent collects a premium.
✔✔Conditional Receipt: - ✔✔Says that coverage will be effective either on the date of
the application or the date of the medical exam, whichever occurs last, unless coverage
is declined or rated, or issued with riders excluding specific coverage.
✔✔When does the approval conditional receipt begin? - ✔✔When the prepaid
application is approved by the insurer but before the policy is delivered.
✔✔Unconditional (binding) receipt: - ✔✔Used most often with property and casualty
insurance. Coverage begins immediately for a specific length of time, until the policy is
issued.
✔✔Medical Information Bureau: - ✔✔It is a membership corporation owned by member
insurance companies. It receives adverse medical information from insurance
companies and maintains confidential medical impairment information on individuals.
✔✔Preferred risk: - ✔✔Are individuals who meet certain requirements and qualify for
lower premiums than the standard risk. These applicants have superior physical
condition, lifestyle, and habits.
✔✔Standard Risk: - ✔✔These people are entitled to insurance protection without extra
rating or special restrictions. This is where the majority of people at their age and similar
lifestyle. It is average risk.
✔✔Substandard (High exposure) Risk: - ✔✔Applicants are not acceptable at standard
rates because of physical condition, personal or family history of disease, occupation, or
dangerous habits. These policies are referred to as "rated" because they could be
issued with the premium rated-up, resulting in higher premium.
, ✔✔Declined Risk: - ✔✔Applicants who are rejected.
✔✔Net single premium: - ✔✔Includes the mortality and interest components necessary
to keep the policy in force until maturity.
Mortality-Interest=Net Premium
✔✔Gross annual premium: - ✔✔The one year cost for mortality, plus the cost of
operating the company (expense loading).
Net Premium + Expense (loading)=Gross Premium
✔✔Frequency - ✔✔Higher frequency= Higher Premium
Monthly>Quarterly> Semi-Annual>Annual
✔✔Signed Delivery Reciept: - ✔✔Must be obtained by the agent when the agent had
delivers an individual policy of annuity to the policy-owner.
✔✔Paramedical Reports: - ✔✔Completed by paramedics or registered nurses.
✔✔Human Life Value approach: - ✔✔Determined by the loss of income that would
result with the death of the insured, after making adjustments for expenses, inflation,
etc.
✔✔START of Life insurance Policies - ✔✔....
✔✔Pure Death Protection: - ✔✔If the insured dies during this term, the policy pays the
death benefit to the beneficiary; If the policy is canceled or expires prior to the insured's
death, nothing is payable at the end of the term; and there is no cash value or other
living benefits.
✔✔Level term insurance: - ✔✔The most common type of temporary protection
purchased. The word level refers to the death benefit that does not change throughout
the life of the policy.
✔✔Annually renewable term: - ✔✔The purest form of term insurance. The death benfit
remains level, and the policy may be guarenteed to be renewable each year without
proof of insurability, but the premium increases annually according to the attained age,
as the probability of death increase.
As the probability of death increase, the premium increases annually according to age.
✔✔Level premium: - ✔✔Provides a level death benefit and level premium during the
policy term.
AND SOLUTIONS RATED A+
✔✔Variable life insurance and annuities: - ✔✔Are contracts in which the cash values
accumulate based upon a specific portfolio of stocks without guarantees of
performance.
✔✔Group Life insurance: - ✔✔Written as a master policy covering the lives of more
than one individual covered under the single master policy
✔✔Illustration: - ✔✔A presentation or depiction that includes non-guaranteed elements
of a policy of individual or group life insurance over a period of years.
✔✔Life insurance illustration must: - ✔✔Distinguish between guaranteed and projected
amounts, clearly state that an illustration is not a part of the contract, and identify those
values that are not guaranteed as such.
✔✔Buyer's Guide: - ✔✔A document that explains how a buyer should go about
choosing the amount and type of insurance to buy, and how a buyer can save money by
comparing the costs of similar policies.
Language is approved by department of insurance
✔✔Policy Summery: - ✔✔A written statement describing the features and elements of
the policy being issued.
✔✔Disclosure rule: - ✔✔Applies to any solicitation, negotiation or procurement of life
insurance or annuities occurring within this state.
✔✔Ohio Life and Health Insurance Guaranty Association: - ✔✔Must create a disclosure
document describing their general purposes and current limitations.
Maintains 2 separate accounts: Life insurance and annuity account, and the health
insurance account.
✔✔Unfair trade practice: - ✔✔Occurs when making any statement that an insurer's
policies are guaranteed by the existence of the Insurance Guaranty Association
✔✔Replacement: - ✔✔A practice of terminating an existing policy or letting it lapse, and
obtaining a new one.
✔✔Replacing insurer and existing insurer: - ✔✔Replacing is the company that issues
the new policy. Existing is the company whose policy is being replaced.
,✔✔Underwriting: - ✔✔The risk selection and classification process. Involves a careful
analysis of many different factors to determine the acceptability of applicants for
insurance.
✔✔Field underwriter: - ✔✔This is what the agent is referred to as in the company
because the agent is usually the one who has solicited the potential insured.
✔✔The application: - ✔✔Is the starting point and basic source of information used by
the company in the risk selection process. When smaller amounts of insurance are
requested and there is no prior medical history of concern, the home office underwriter
may make an underwriting decision solely on the basis of the application.
✔✔Agents report: - ✔✔Provides the agent's personal observations concerning the
proposed insured.
✔✔Premium Receipt: - ✔✔Must be issued whenever the agent collects a premium.
✔✔Conditional Receipt: - ✔✔Says that coverage will be effective either on the date of
the application or the date of the medical exam, whichever occurs last, unless coverage
is declined or rated, or issued with riders excluding specific coverage.
✔✔When does the approval conditional receipt begin? - ✔✔When the prepaid
application is approved by the insurer but before the policy is delivered.
✔✔Unconditional (binding) receipt: - ✔✔Used most often with property and casualty
insurance. Coverage begins immediately for a specific length of time, until the policy is
issued.
✔✔Medical Information Bureau: - ✔✔It is a membership corporation owned by member
insurance companies. It receives adverse medical information from insurance
companies and maintains confidential medical impairment information on individuals.
✔✔Preferred risk: - ✔✔Are individuals who meet certain requirements and qualify for
lower premiums than the standard risk. These applicants have superior physical
condition, lifestyle, and habits.
✔✔Standard Risk: - ✔✔These people are entitled to insurance protection without extra
rating or special restrictions. This is where the majority of people at their age and similar
lifestyle. It is average risk.
✔✔Substandard (High exposure) Risk: - ✔✔Applicants are not acceptable at standard
rates because of physical condition, personal or family history of disease, occupation, or
dangerous habits. These policies are referred to as "rated" because they could be
issued with the premium rated-up, resulting in higher premium.
, ✔✔Declined Risk: - ✔✔Applicants who are rejected.
✔✔Net single premium: - ✔✔Includes the mortality and interest components necessary
to keep the policy in force until maturity.
Mortality-Interest=Net Premium
✔✔Gross annual premium: - ✔✔The one year cost for mortality, plus the cost of
operating the company (expense loading).
Net Premium + Expense (loading)=Gross Premium
✔✔Frequency - ✔✔Higher frequency= Higher Premium
Monthly>Quarterly> Semi-Annual>Annual
✔✔Signed Delivery Reciept: - ✔✔Must be obtained by the agent when the agent had
delivers an individual policy of annuity to the policy-owner.
✔✔Paramedical Reports: - ✔✔Completed by paramedics or registered nurses.
✔✔Human Life Value approach: - ✔✔Determined by the loss of income that would
result with the death of the insured, after making adjustments for expenses, inflation,
etc.
✔✔START of Life insurance Policies - ✔✔....
✔✔Pure Death Protection: - ✔✔If the insured dies during this term, the policy pays the
death benefit to the beneficiary; If the policy is canceled or expires prior to the insured's
death, nothing is payable at the end of the term; and there is no cash value or other
living benefits.
✔✔Level term insurance: - ✔✔The most common type of temporary protection
purchased. The word level refers to the death benefit that does not change throughout
the life of the policy.
✔✔Annually renewable term: - ✔✔The purest form of term insurance. The death benfit
remains level, and the policy may be guarenteed to be renewable each year without
proof of insurability, but the premium increases annually according to the attained age,
as the probability of death increase.
As the probability of death increase, the premium increases annually according to age.
✔✔Level premium: - ✔✔Provides a level death benefit and level premium during the
policy term.
