Life, Accident and Health Insurance Ohio Questions
and Answers () (Verified Answers)
Which is a FALSE statement?
a. Agents act in a fiduciary capacity when handling premiums.
b. Misrepresentation on an application can void coverage, if
material.
c. Mutual life insurers cannot guarantee their future dividend
scale.
d. You can protect future dividends on a non-participating policy. -
CORRECT ANSWER D.
Only participating policies might pay dividends to policy owners.
Stock insurers issue non-participating policies.
Which type of license represents insureds or prospective insureds
and does NOT represent an insurance company?
a. exclusive agent
b. independent insurance agent
c. insurance agent
d. insurance broker - CORRECT ANSWER insurance broker
They represent the customer.
Exclusive, captive, agents represent one insurer.
Independent agent may represent as many insurers as he
desires.
Which is NOT a true statement about Life Insurance?
,a. The 1035 exchange must always be with the same company
that issued the first policy.
b. An Automatic Premium Loan rider will keep a Whole Life policy
from lapsing.
c. The cash value of a Whole Life policy may be used to
supplement retirement.
d. Reinstatement of a lapsed policy is subject to certain
conditions. - CORRECT ANSWER A.
IRS rule 1035 allows the same person to defer taxes when
switching from one Life Insurance policy to another.
A beneficiary designation that reads, "Jane, my wife, only if she
survives me by 30 days," is an example of which clause?
a. Common disaster
b. Per stripes
c. Revocable
d. Spendthrift - CORRECT ANSWER Common disaster
Prevents the beneficiary from receiving benefits if they don't
survive the insured by 30 days. The contingent beneficiary would
receive the benefits, rather than allowing the primary benficiaries
wishes.
Which policy has a low premium for five years and then increases
to a level amount for the remainder of the policy?
a. Continuous Premium Whole Life
b. Level Term
c. Modified Whole Life
d. Step-Rate Whole Life - CORRECT ANSWER Modified Whole
Life
,To meet market demands and to help low income insured's,
modified whole life has lower premiums 1st three years to five
years then increases to a level amount.
A contract where only one party makes an enforceable promise is
said to be
a. aleatory
b. a contract of adhesion
c. a contract of indemnity
d. unilateral - CORRECT ANSWER unilateral
Most contracts are bilateral.
Most insurance contracts are unilateral.
If a Life insurance policy is purchased and fails to meet the seven-
pay test, it is considered by the IRS as a(n)
a. Annuity
b. Modified Endowment Contract (MEC)
c. Modified Whole Life policy
d. Whole Life policy - CORRECT ANSWER MEC
Qualified retirement plans such as a 401(k) are set up by
employers to benefit their employees. Sometimes annuities are
chosen as the funding vehicle. Which of the following is true about
qualified plans or annuities that fund them?
a. Qualified plans can be funded in such a way that they
discriminate in favor of highly paid executives.
b. Only annuities can be used to fund qualified plans.
c. If an annuity is used, it can be an individual or group annuity
contract.
d. Annuities used in qualified plans get an extra tax savings,
which is an advantage of using annuities over other investments. -
, CORRECT ANSWER If an annuity used, it can be an individual
or group annuity contract.
Which Life Insurance policy clause prevents an insurance
company from denying payment of a death claim after a specified
period of time?
a. Incontestability clause
b. Insuring clause
c. Misstatement of Age clause
d. Reinstatement clause - CORRECT ANSWER Incontestability
clause
On May 8th, Samantha completed an application for a Life
Insurance policy but paid no premium. The insurance company
approved her application on May 14th and issued her policy on
May 26th and collected the first premium. Her coverage became
effective on
a. May 8th
b. may 14th
c. May 15th
d. May 26th - CORRECT ANSWER May 26th
At age 30, Jack wishes to purchase a Whole Life policy. Which
plan will accumulate cash value at a faster rate during the early
years of his policy.
a. The rate of cash value accumulation depends on the
profitablility of the insurance company.
b. The Straight Life will accumulate cash value faster than
Straight Life.
c. Both 20-pay and Straight Life will accumulate cash value at the
same rate. - CORRECT ANSWER Both 20-pay and Straight Life
will accumulate cash value at the same rate.
and Answers () (Verified Answers)
Which is a FALSE statement?
a. Agents act in a fiduciary capacity when handling premiums.
b. Misrepresentation on an application can void coverage, if
material.
c. Mutual life insurers cannot guarantee their future dividend
scale.
d. You can protect future dividends on a non-participating policy. -
CORRECT ANSWER D.
Only participating policies might pay dividends to policy owners.
Stock insurers issue non-participating policies.
Which type of license represents insureds or prospective insureds
and does NOT represent an insurance company?
a. exclusive agent
b. independent insurance agent
c. insurance agent
d. insurance broker - CORRECT ANSWER insurance broker
They represent the customer.
Exclusive, captive, agents represent one insurer.
Independent agent may represent as many insurers as he
desires.
Which is NOT a true statement about Life Insurance?
,a. The 1035 exchange must always be with the same company
that issued the first policy.
b. An Automatic Premium Loan rider will keep a Whole Life policy
from lapsing.
c. The cash value of a Whole Life policy may be used to
supplement retirement.
d. Reinstatement of a lapsed policy is subject to certain
conditions. - CORRECT ANSWER A.
IRS rule 1035 allows the same person to defer taxes when
switching from one Life Insurance policy to another.
A beneficiary designation that reads, "Jane, my wife, only if she
survives me by 30 days," is an example of which clause?
a. Common disaster
b. Per stripes
c. Revocable
d. Spendthrift - CORRECT ANSWER Common disaster
Prevents the beneficiary from receiving benefits if they don't
survive the insured by 30 days. The contingent beneficiary would
receive the benefits, rather than allowing the primary benficiaries
wishes.
Which policy has a low premium for five years and then increases
to a level amount for the remainder of the policy?
a. Continuous Premium Whole Life
b. Level Term
c. Modified Whole Life
d. Step-Rate Whole Life - CORRECT ANSWER Modified Whole
Life
,To meet market demands and to help low income insured's,
modified whole life has lower premiums 1st three years to five
years then increases to a level amount.
A contract where only one party makes an enforceable promise is
said to be
a. aleatory
b. a contract of adhesion
c. a contract of indemnity
d. unilateral - CORRECT ANSWER unilateral
Most contracts are bilateral.
Most insurance contracts are unilateral.
If a Life insurance policy is purchased and fails to meet the seven-
pay test, it is considered by the IRS as a(n)
a. Annuity
b. Modified Endowment Contract (MEC)
c. Modified Whole Life policy
d. Whole Life policy - CORRECT ANSWER MEC
Qualified retirement plans such as a 401(k) are set up by
employers to benefit their employees. Sometimes annuities are
chosen as the funding vehicle. Which of the following is true about
qualified plans or annuities that fund them?
a. Qualified plans can be funded in such a way that they
discriminate in favor of highly paid executives.
b. Only annuities can be used to fund qualified plans.
c. If an annuity is used, it can be an individual or group annuity
contract.
d. Annuities used in qualified plans get an extra tax savings,
which is an advantage of using annuities over other investments. -
, CORRECT ANSWER If an annuity used, it can be an individual
or group annuity contract.
Which Life Insurance policy clause prevents an insurance
company from denying payment of a death claim after a specified
period of time?
a. Incontestability clause
b. Insuring clause
c. Misstatement of Age clause
d. Reinstatement clause - CORRECT ANSWER Incontestability
clause
On May 8th, Samantha completed an application for a Life
Insurance policy but paid no premium. The insurance company
approved her application on May 14th and issued her policy on
May 26th and collected the first premium. Her coverage became
effective on
a. May 8th
b. may 14th
c. May 15th
d. May 26th - CORRECT ANSWER May 26th
At age 30, Jack wishes to purchase a Whole Life policy. Which
plan will accumulate cash value at a faster rate during the early
years of his policy.
a. The rate of cash value accumulation depends on the
profitablility of the insurance company.
b. The Straight Life will accumulate cash value faster than
Straight Life.
c. Both 20-pay and Straight Life will accumulate cash value at the
same rate. - CORRECT ANSWER Both 20-pay and Straight Life
will accumulate cash value at the same rate.
