OHIO LIFE INSURANCE EVALUATION 2026 EXAM
QUESTIONS AND SOLUTIONS RATED A+
✔✔Nonparticipating policies: - ✔✔Does not pay dividends to policyowners, but taxable
dividends are paid to stock holders. Usually issued by stock companies
✔✔Participating policies: - ✔✔Pay dividends to policy owners based upon actual
mortality cost, interest earned and costs.
✔✔Risk Retention Group: - ✔✔A liability insurance company owned by its members.
✔✔Lloyd's Association: - ✔✔Provides support facilities for underwriters or groups of
individuals that accept insurance risk.
✔✔Surplus lines: - ✔✔Insurance for which there is no readily available admitted market.
They do not have a certificate of authority to transact business in the state, but are on
the Commissioner's approved list to transact business under the state's surplus lines
laws.
✔✔Offer: - ✔✔This is made when submitting the application
✔✔Acceptance: - ✔✔Takes place when an insurer's underwriter approves the
application and issues a policy.
✔✔Consideration: - ✔✔The binding force in any contract.
✔✔Competent Parties: - ✔✔The parties to a contract must be capable of entering into a
contract in the eyes of the law.
✔✔Legal Purpose: - ✔✔The purpose of the contract must be legal and not against
public policy.
✔✔Contract of adhesion: - ✔✔Is prepared by one of the parties and accepted or
rejected by the other party. Known as a take it or leave it contract
✔✔Aleatory Contract: - ✔✔There is an exchange of unequal amounts or values.
✔✔Personal Contract: - ✔✔A contract is personal because it is between the insurance
company and an individual.
✔✔Unilateral Contract: - ✔✔Only one of the parties to the contract is legally bound to
do anything.
,✔✔Conditional Contract: - ✔✔Requires that certain conditions must be met by the
policy owners and the company in order for the contract to be executed.
✔✔Utmost of Good Faith: - ✔✔Implies that there will be no fraud, misrepresentation or
concealment between the parties.
✔✔Reciprocal: - ✔✔When insurance is obtained through a reciprocal insurer, the
insureds are sharing the risk of loss with other subscribers of that reciprocal.
✔✔Adverse Selection: - ✔✔There are more risks with higher probability of loss seeking
to purchase and maintain insurance than the risks who present lower probability.
Underwriters must guard against this.
✔✔Starts LIFE INSURANCE BASICS CHAPTER: - ✔✔...
✔✔Insurabel Interest: - ✔✔The policyowner must face the possibility of losing money or
something of value in the event of loss. Insurable interest must exist between the policy
owner and the insured at the time of application.
✔✔Immediate estate: - ✔✔It is created with the purchase of life insurance.
✔✔Viatical Settlements: - ✔✔Allow someone living with a life threatening condition to
sell their existing life insurance policy and use the proceeds when they are most
needed, before their death. The Viator has 15 calendar days to rescind a contract after
receiving the settlement proceeds.
✔✔Viator: - ✔✔Means the owner of a life insurance policy who enters or seeks to enter
into a viatical settlement contract.
✔✔Viatical settlement provider: - ✔✔A person, other than a viator, that enters into or
effectuates (makes effective) a viatical settlement contract.
✔✔Buy-sell agreement: - ✔✔A legal contract that determines what will be done with a
business in the event that an owner dies or becomes disabled.
✔✔Buy-sell agreements: 4 - ✔✔*Cross Purchase:* Used in partnerships when each
partner buys a policy on the other.
*Entity Purchase:* Used when the partnership buys the policies on the partners
*Stock Purchase:* Used by privately owned corporations when each stockholder buys a
policy on each of the others;
*Stock Redemption:* Used when the corporation buys one policy on each shareholder.
✔✔Key person insurance: - ✔✔Lessens the risk of losing a key person in the business
who has specialized knowledge, skills,, or business contacts.
, ✔✔Executive Bonus: - ✔✔An arrangement where the employer offers to give the
employee a wage increase in the amount of the premium on a new life insurance policy
on the employee.
✔✔Term Life insurance: - ✔✔Is temporary life insurance provided for a specific period
of time. It is also known as pure life insurance.
✔✔Permanent Life insurance: - ✔✔Is a general term used to refer to various forms of
whole life insurance policies that remain in effect to age 100, as long as the premium is
paid. Includes savings elements
✔✔Industrial or home service insurance: - ✔✔Is life insurance written on an individual
basis. Small amounts (face less than $1000) premiums payable on weekly or monthlly
basis, premiums collected at the home of the insured, and policies are written as non
medical.
✔✔Ordinary life insurance: - ✔✔Written on individual basis. Larger face amounts,
premiums can be paid annually, semi annually, quarterly or monthly, they are paid by
the insured directly to the insurer, and physical examinations may be required to prove
the applicants insurability.
✔✔Fixed life insurance or annuities: - ✔✔Are contracts that offer guaranteed minimum
or fixed benefits that are stated in the contract.
✔✔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
QUESTIONS AND SOLUTIONS RATED A+
✔✔Nonparticipating policies: - ✔✔Does not pay dividends to policyowners, but taxable
dividends are paid to stock holders. Usually issued by stock companies
✔✔Participating policies: - ✔✔Pay dividends to policy owners based upon actual
mortality cost, interest earned and costs.
✔✔Risk Retention Group: - ✔✔A liability insurance company owned by its members.
✔✔Lloyd's Association: - ✔✔Provides support facilities for underwriters or groups of
individuals that accept insurance risk.
✔✔Surplus lines: - ✔✔Insurance for which there is no readily available admitted market.
They do not have a certificate of authority to transact business in the state, but are on
the Commissioner's approved list to transact business under the state's surplus lines
laws.
✔✔Offer: - ✔✔This is made when submitting the application
✔✔Acceptance: - ✔✔Takes place when an insurer's underwriter approves the
application and issues a policy.
✔✔Consideration: - ✔✔The binding force in any contract.
✔✔Competent Parties: - ✔✔The parties to a contract must be capable of entering into a
contract in the eyes of the law.
✔✔Legal Purpose: - ✔✔The purpose of the contract must be legal and not against
public policy.
✔✔Contract of adhesion: - ✔✔Is prepared by one of the parties and accepted or
rejected by the other party. Known as a take it or leave it contract
✔✔Aleatory Contract: - ✔✔There is an exchange of unequal amounts or values.
✔✔Personal Contract: - ✔✔A contract is personal because it is between the insurance
company and an individual.
✔✔Unilateral Contract: - ✔✔Only one of the parties to the contract is legally bound to
do anything.
,✔✔Conditional Contract: - ✔✔Requires that certain conditions must be met by the
policy owners and the company in order for the contract to be executed.
✔✔Utmost of Good Faith: - ✔✔Implies that there will be no fraud, misrepresentation or
concealment between the parties.
✔✔Reciprocal: - ✔✔When insurance is obtained through a reciprocal insurer, the
insureds are sharing the risk of loss with other subscribers of that reciprocal.
✔✔Adverse Selection: - ✔✔There are more risks with higher probability of loss seeking
to purchase and maintain insurance than the risks who present lower probability.
Underwriters must guard against this.
✔✔Starts LIFE INSURANCE BASICS CHAPTER: - ✔✔...
✔✔Insurabel Interest: - ✔✔The policyowner must face the possibility of losing money or
something of value in the event of loss. Insurable interest must exist between the policy
owner and the insured at the time of application.
✔✔Immediate estate: - ✔✔It is created with the purchase of life insurance.
✔✔Viatical Settlements: - ✔✔Allow someone living with a life threatening condition to
sell their existing life insurance policy and use the proceeds when they are most
needed, before their death. The Viator has 15 calendar days to rescind a contract after
receiving the settlement proceeds.
✔✔Viator: - ✔✔Means the owner of a life insurance policy who enters or seeks to enter
into a viatical settlement contract.
✔✔Viatical settlement provider: - ✔✔A person, other than a viator, that enters into or
effectuates (makes effective) a viatical settlement contract.
✔✔Buy-sell agreement: - ✔✔A legal contract that determines what will be done with a
business in the event that an owner dies or becomes disabled.
✔✔Buy-sell agreements: 4 - ✔✔*Cross Purchase:* Used in partnerships when each
partner buys a policy on the other.
*Entity Purchase:* Used when the partnership buys the policies on the partners
*Stock Purchase:* Used by privately owned corporations when each stockholder buys a
policy on each of the others;
*Stock Redemption:* Used when the corporation buys one policy on each shareholder.
✔✔Key person insurance: - ✔✔Lessens the risk of losing a key person in the business
who has specialized knowledge, skills,, or business contacts.
, ✔✔Executive Bonus: - ✔✔An arrangement where the employer offers to give the
employee a wage increase in the amount of the premium on a new life insurance policy
on the employee.
✔✔Term Life insurance: - ✔✔Is temporary life insurance provided for a specific period
of time. It is also known as pure life insurance.
✔✔Permanent Life insurance: - ✔✔Is a general term used to refer to various forms of
whole life insurance policies that remain in effect to age 100, as long as the premium is
paid. Includes savings elements
✔✔Industrial or home service insurance: - ✔✔Is life insurance written on an individual
basis. Small amounts (face less than $1000) premiums payable on weekly or monthlly
basis, premiums collected at the home of the insured, and policies are written as non
medical.
✔✔Ordinary life insurance: - ✔✔Written on individual basis. Larger face amounts,
premiums can be paid annually, semi annually, quarterly or monthly, they are paid by
the insured directly to the insurer, and physical examinations may be required to prove
the applicants insurability.
✔✔Fixed life insurance or annuities: - ✔✔Are contracts that offer guaranteed minimum
or fixed benefits that are stated in the contract.
✔✔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
