OHIO LIFE, ACCIDENT AND HEALTH EXAM
WITH 300 QUESTIONS AND CORRECT
ANSWERS GRADED A+ WITH RATIONALES
Which statement BEST describes the tax responsibilities under a Business
Overhead policy?
a. Premiums are deductible, benefits are deductible.
b. Premiums are deductible, benefits are taxed.
c. Premiums are not deductible, expenses are deductible.
d. Premiums are not deductible, benefits are taxed. - ANSWER-Premiums are
deductible, benefits are taxed
The Group Insurance provision that prevents two insurers from paying more than
the actual loss is called the...
a. Coordination of Benefits.
b. Over Insurance clause.
c. Over-insurance clause.
d. Pro rata liability. - ANSWER-Coordination of Benefits (COD) - they could have
a primary and secondary insurance but they won't pay out more than the total loss.
In which type of insurance company may stockholders share in the profits and
losses of the insurer?
a. assessment
b. mutual
c. service
d. stock - ANSWER-Stock.
,In which company may policy owners receive policy dividends when there is a
profit?
a. assessment
b. mutual
c. service
d. stock - ANSWER-Mutual company.
Dividends, if paid, are not taxable and are never guaranteed
And agent who circulates false or misleading information for the purpose of
inducing a prospect to lapse or cancel an existing policy to purchase a new one is
guilty of the unfair trade practice of...
a. discrimination
b. rebating.
c. twisting.
d. none of the above - ANSWER-Twisting
If the policy owner has not heard from the insurer, an Individual Health policy is
considered reinstated ______ days following the request:
a. 10
b. 15
c. 30
d. 45 - ANSWER-45 days.
The insurer is automatically reinstated by 45 days unless the insurer rejects the
insured.
,The law of large numbers states that...
a. all losses are predictable.
b. large losses are easier to predict.
c. predictions become more accurate as the number of units being considered
increase.
d. small losses are predictable. - ANSWER-The predictions become more accurate
as the number of units being considered increases.
The more people an insurer covers, the easier it is to predict future claims based on
this law. This is why Life insurance companies usually make a profit by measuring
the chance of death using a mortality table.
Premiums paid by sole proprietors for Individual Health Insurance coverage are...
a. deductible only if they exceed 7 1/2 % of adjusted gross income.
b. fully deductible.
c. not deductible.
d. partially deductible. - ANSWER-Fully deductible.
Since 2003, 100% of premiums paid by a sole proprietor and his dependents are
tax deductible.
Affirming or denying coverage for a claim must be within how many days after
proof of loss statements have been completed?
a. 10
b. 21
c. 30
d. 14 - ANSWER-21 days.
, If more time is needed to investigate the claim, the insurer will notify the claimant
within the 21 days of the need for more time and every 90 days thereafter.
In Group Health Insurance, the contract is between the...
a. employee and his dependents.
b. employer and the employees.
c. employer and the insurance company.
d. employees and the insurer. - ANSWER-Employer and the insurance company
(insurer).
The employees are covered but only receive a Certificate of Insurance stating the
amount of their coverage.
Insurable risks must involve:
a. certain losses only.
b. certain and uncertain losses.
c. gambling.
d. the possibility of loss only. - ANSWER-The possibility of loss only.
Remember, pure risk involves the chance of loss only. If there is any chance for
gain, the risk is not insurable. Also, if it is certain there will be a loss, the insurer
will decline coverage since it is sure to lose money.
An agent is a representative of the:
a. general agency system
b. insurance company
WITH 300 QUESTIONS AND CORRECT
ANSWERS GRADED A+ WITH RATIONALES
Which statement BEST describes the tax responsibilities under a Business
Overhead policy?
a. Premiums are deductible, benefits are deductible.
b. Premiums are deductible, benefits are taxed.
c. Premiums are not deductible, expenses are deductible.
d. Premiums are not deductible, benefits are taxed. - ANSWER-Premiums are
deductible, benefits are taxed
The Group Insurance provision that prevents two insurers from paying more than
the actual loss is called the...
a. Coordination of Benefits.
b. Over Insurance clause.
c. Over-insurance clause.
d. Pro rata liability. - ANSWER-Coordination of Benefits (COD) - they could have
a primary and secondary insurance but they won't pay out more than the total loss.
In which type of insurance company may stockholders share in the profits and
losses of the insurer?
a. assessment
b. mutual
c. service
d. stock - ANSWER-Stock.
,In which company may policy owners receive policy dividends when there is a
profit?
a. assessment
b. mutual
c. service
d. stock - ANSWER-Mutual company.
Dividends, if paid, are not taxable and are never guaranteed
And agent who circulates false or misleading information for the purpose of
inducing a prospect to lapse or cancel an existing policy to purchase a new one is
guilty of the unfair trade practice of...
a. discrimination
b. rebating.
c. twisting.
d. none of the above - ANSWER-Twisting
If the policy owner has not heard from the insurer, an Individual Health policy is
considered reinstated ______ days following the request:
a. 10
b. 15
c. 30
d. 45 - ANSWER-45 days.
The insurer is automatically reinstated by 45 days unless the insurer rejects the
insured.
,The law of large numbers states that...
a. all losses are predictable.
b. large losses are easier to predict.
c. predictions become more accurate as the number of units being considered
increase.
d. small losses are predictable. - ANSWER-The predictions become more accurate
as the number of units being considered increases.
The more people an insurer covers, the easier it is to predict future claims based on
this law. This is why Life insurance companies usually make a profit by measuring
the chance of death using a mortality table.
Premiums paid by sole proprietors for Individual Health Insurance coverage are...
a. deductible only if they exceed 7 1/2 % of adjusted gross income.
b. fully deductible.
c. not deductible.
d. partially deductible. - ANSWER-Fully deductible.
Since 2003, 100% of premiums paid by a sole proprietor and his dependents are
tax deductible.
Affirming or denying coverage for a claim must be within how many days after
proof of loss statements have been completed?
a. 10
b. 21
c. 30
d. 14 - ANSWER-21 days.
, If more time is needed to investigate the claim, the insurer will notify the claimant
within the 21 days of the need for more time and every 90 days thereafter.
In Group Health Insurance, the contract is between the...
a. employee and his dependents.
b. employer and the employees.
c. employer and the insurance company.
d. employees and the insurer. - ANSWER-Employer and the insurance company
(insurer).
The employees are covered but only receive a Certificate of Insurance stating the
amount of their coverage.
Insurable risks must involve:
a. certain losses only.
b. certain and uncertain losses.
c. gambling.
d. the possibility of loss only. - ANSWER-The possibility of loss only.
Remember, pure risk involves the chance of loss only. If there is any chance for
gain, the risk is not insurable. Also, if it is certain there will be a loss, the insurer
will decline coverage since it is sure to lose money.
An agent is a representative of the:
a. general agency system
b. insurance company
