OKLAHOMA INSURANCE EXAM QUESTIONS & ANSWERS SCORED A+ TO PASS

A business offers a group disability income plan and pays the premiums. If an employee suffers a disabling injury, the benefits paid to the employee will be: - Answer-axable income to the business deductible income to the employee a deductible business expense for the business taxable income to the employee A business overhead expense policy does NOT provide: - Answer-tax-free benefits a Medicare SELECT plan is - Answer-a managed care policy. A Medicare SELECT plan is a - Answer-managed care plan. A Medicare supplement policy advertised, sold, or issued in Oklahoma cannot - Answer-have limitations or exclusions that are more restrictive than those of Medicare use waivers to exclude, limit, or reduce coverage or benefits for certain pre-existing illnesses or conditions duplicate benefits provided by Medicare A Medigap policy is - Answer-a traditional indemnity policy. A Medigap policy is a - Answer-traditional indemnity policy Admitted vs. Non-admitted - Answer-Refers to whether or not an insurer is approved or authorized to write business in this State. Certificate of Authority Agents - Answer-represent the insurerAgents and Brokers - Answer-Producers All insurance companies selling Medicare supplement policies must sell: - Answer-Plan A and either Plan C or Plan F. They may sell any of the other plans, too. All insurance companies selling Medigap policies must sell: - Answer-Plan A and either Plan C or Plan F. All Medigap plans must include coverage for - Answer-hospice care. do not need to cover at-home recovery or preventive medical care that is not covered by Medicare. All of the following statements about the interest rates on deferred annuities are correct EXCEPT: - Answer-The guaranteed minimum rate is usually 5 to 6 percent. The annuity contract is credited with the higher of the guaranteed rate or the current declared rate. The current declared rate is subject to change. The guaranteed minimum rate extends for the life of the contract. All of the following statements regarding the reduced paid-up life insurance nonforfeiture option are correct EXCEPT: - Answer-f the lapsed policy was a participating policy, the paid-up policy remains eligible for dividends. The paid-up policy will not build any more cash value. A policyowner of a lapsed policy can take the reduced paid-up option regardless of whether the lapsed policy was issued on a standard or substandard (rated) basis. A paid-up policy under the reduced paid-up insurance option requires no further premiums nor can any be paid. All the following statements about "other insured" term riders on a life insurance policy are correct EXCEPT: - Answer-Only spouses or partners can be covered under this rider. The term life coverage provided by the rider is temporary. Applicants often purchase this rider to cover their spouse or partner. Coverage ends when the policyowner reaches a specified age such as 65 or 70.All the following statements about the net premium for a traditional life insurance policy are correct EXCEPT: - Answer-Calculating the net single premium is the first step in calculating the gross premium charged to the policyowner. The net single premium for a traditional life insurance policy is the amount actually charged to the policyowner who wants to purchase the policy with a single premium payment. The net premium is the insurer's estimated cost to provide the policy benefits without accounting for the insurer's expenses. The net premium reflects two of the three premium factors: mortality and interest. All the following statements regarding withdrawals from a universal life policy are correct EXCEPT: - Answer-A policyowner can withdraw amounts less than the full cash value. Policy loans are not permitted with universal life insurance policies Universal life insurance policies allow withdrawals from their cash values. Withdrawals from a UL policy's cash value are called partial surrenders. Although Medicare SELECT is a managed care alternative to a traditional Medicare supplement policy, it only supplements - Answer-Medicare Parts A and B. Although the employer sets the eligibility standards for participation in its group health insurance plan, the insurer alone: - Answer-sets the minimum participation standards Amount of Social Security Disability Benefit - Answer-Amount =primary insurance amount PIA-amount earned while working Average monthly earning adjusted for inflation Family-spouse over 65 can get 50% of spouses benefit unmarried children 50% under 18 An alternative to Medicare supplement insurance is - Answer-Medicare SELECT plan. An insured's medical expense plan requires the insured to pay the medical care provider for each service rendered. The insurer then reimburses the insured. On what basis are benefits paid? - Answer-a. comprehensiveb. pre-paid c. fee-for-service d. specified An insurer can exclude or restrict coverage under a credit accident and health insurance policy if the insured becomes disabled as a result of all of the following EXCEPT: - Answer-work-related injury Basic Medical Plans (3 Types) - Answer-HSP hospital surgical physicians Supplementary and Comprehensive Brokers - Answer-Represent the clients: independent firms or individuals whose principal function is to bring buyers and sellers together to make sales Business Disability Insurance - Answer-Key Person Disability Buy-out Business Overhead Disability Reducing Term Business Overhead Expense Insurance - Answer-If a business owner becomes disabled, this policy will not replace the owner's income, but will instead help pay the expenses of operating the business such as rent, utilities and wages. Short elimination period 15-60 days Benefits short 1-2 days Career of Captive Agent (2) - Answer-1. Managerial System a. employs agents through regular officesb. Agency head GM-employee of insurer-responsible for agency expenses 2. Independent Agency a. agency head Independent Contractor b. GA (General Agent) responsible for agency, expenses, staffing... c. Not an Employee of the insurer 3. Direct Response System a. sell directly to consumers w/o agents or brokers b. through email, radio, television Career or Captive Agency System - Answer-1. Managerial: GM 2. General: GA Christina lives in a state that prohibits medical underwriting in the sale of health insurance. When she applies for an individual health insurance policy, the insurer: - Answer-must use a single community rate to set the premium Classification of Insurers/Insurers Classified by - Answer-1. Licensure 2. Location 3. Financial Strength Closed Panel vs. Open Panel - Answer-Closed Panel (HMO): An HMO that does not provide services outside its Network Open Panel: Covers services from providers outside whose fees have been set by an HMO Coinsurance vs. Copayment - Answer-coinsurance: Major Medical:% of total charges that ins pays-20- 30% copayment: Managed Care Plan-flat dollar amount -members pay Common Life insurance Options - Answer-Non-Forfeiture OptionsCost Indexes - Answer-1. L ins surrender cost index (future cash value withdrawal) 2. L ins Net Payment Cost Index (no cash value withdrawal) Disability Buy-Out Policy - Answer-A type of DI policy that provides surviving business owners with the funds needed to execute a buy-sell agreement upon a co-owner's disability