Ohio Life Insurance Exam!! Questions
and Answers (Verified Answers)
||ACTUAL EXAM 2025 TEST!! Graded A+ |
2025|2026 EXAM UPDATE
Insurance - ( answers)A contract that indemnifies another against loss, damage, or liability
Indemnify - ( answers)To make one whole by restoring them to the same financial position that
existed before the loss
Pure risk - ( answers)There is only a chance of loss and there is no possibility for gain (insurable)
Speculative risk - ( answers)Uncertainty of loss or gain: these risks are undertaken voluntarily
(ex: stock market)
Peril - ( answers)The immediate specific event causing loss
Moral hazard - ( answers)Arise from peoples habits and values (ex: filing a false claim)
Morale hazard - ( answers)Arise from human carelessness (ex: failing to take safety precautions)
STARR - ( answers)Methods for dealing with risk: Sharing, Transfer, Avoidance, Reduction,
Retention
Insurable interest - ( answers)An individual must have a legitimate interest in the preservation
of the life of the property insured
1
,Subrogation - ( answers)A clause in the insurance policy that gives the insurer the right to sue
the party responsible for the loss (not used in life insurance)
Face amount - ( answers)Maximum amount of liability of the insurer
Elimination period - ( answers)The "deductible" for disability insurance; the number of days a
person must be disabled before benefits become payable
Coinsurance - ( answers)The insurer and insured share allowable expenses
Life insurance - ( answers)Insurance coverage on human lives including endowments and
annuities. May also include benefits for accidental death, dismemberment, or diability
Variable products - ( answers)These carry investment risk- the insured may lose money because
of a decrease in the price of securities underlying the product. The SEC and state insurance
departments regulate variable contracts
Credit - ( answers)A limited line of insurance protecting the insured against financial
consequences should a debtor be unable to pay due to illness/ death
Stock insurance company - ( answers)Non- participating company because its policyholders do
not participate in dividends
Mutual insurers - ( answers)Participating company because ownership rests with the
policyholders who are paid policy dividends of funds not paid out in claims and operating costs
2
, Reciprocal insurers - ( answers)Unincorporated groups of people that provide insurance for one
another through indemnity agreements. Each individual is known as a subscriber and accounts
are overseen by an attorney-in-fact
Fraternal benefit societies - ( answers)Life insurance carriers that exist as social organizations.
They have open contracts, which allow for additional, unscheduled premium charges in times of
financial difficulty
Lloyds of London - ( answers)A meeting place for members who transact insurance and are
individually liable for contracts they enter
Reinsurers - ( answers)Insurers for insurers. The company that is transferring the risk is called
the ceding company
Faculative reinsurer - ( answers)Negotiate on an individual risk basis. The reinsurer can accept
or reject each risk
Treaty reinsurer - ( answers)Automatic sharing of risks by the ceding company
Excess and surplus lines - ( answers)Risks that are difficult to insure in the normal marketplace
are attempted to be places in unauthorized carriers
Risk retention groups - ( answers)Spread liability among its members (only liability insurance)
Self- insurance - ( answers)Set aside reserve funds to cover loss and purchase excess insurance
to cover large losses above a given level
3
and Answers (Verified Answers)
||ACTUAL EXAM 2025 TEST!! Graded A+ |
2025|2026 EXAM UPDATE
Insurance - ( answers)A contract that indemnifies another against loss, damage, or liability
Indemnify - ( answers)To make one whole by restoring them to the same financial position that
existed before the loss
Pure risk - ( answers)There is only a chance of loss and there is no possibility for gain (insurable)
Speculative risk - ( answers)Uncertainty of loss or gain: these risks are undertaken voluntarily
(ex: stock market)
Peril - ( answers)The immediate specific event causing loss
Moral hazard - ( answers)Arise from peoples habits and values (ex: filing a false claim)
Morale hazard - ( answers)Arise from human carelessness (ex: failing to take safety precautions)
STARR - ( answers)Methods for dealing with risk: Sharing, Transfer, Avoidance, Reduction,
Retention
Insurable interest - ( answers)An individual must have a legitimate interest in the preservation
of the life of the property insured
1
,Subrogation - ( answers)A clause in the insurance policy that gives the insurer the right to sue
the party responsible for the loss (not used in life insurance)
Face amount - ( answers)Maximum amount of liability of the insurer
Elimination period - ( answers)The "deductible" for disability insurance; the number of days a
person must be disabled before benefits become payable
Coinsurance - ( answers)The insurer and insured share allowable expenses
Life insurance - ( answers)Insurance coverage on human lives including endowments and
annuities. May also include benefits for accidental death, dismemberment, or diability
Variable products - ( answers)These carry investment risk- the insured may lose money because
of a decrease in the price of securities underlying the product. The SEC and state insurance
departments regulate variable contracts
Credit - ( answers)A limited line of insurance protecting the insured against financial
consequences should a debtor be unable to pay due to illness/ death
Stock insurance company - ( answers)Non- participating company because its policyholders do
not participate in dividends
Mutual insurers - ( answers)Participating company because ownership rests with the
policyholders who are paid policy dividends of funds not paid out in claims and operating costs
2
, Reciprocal insurers - ( answers)Unincorporated groups of people that provide insurance for one
another through indemnity agreements. Each individual is known as a subscriber and accounts
are overseen by an attorney-in-fact
Fraternal benefit societies - ( answers)Life insurance carriers that exist as social organizations.
They have open contracts, which allow for additional, unscheduled premium charges in times of
financial difficulty
Lloyds of London - ( answers)A meeting place for members who transact insurance and are
individually liable for contracts they enter
Reinsurers - ( answers)Insurers for insurers. The company that is transferring the risk is called
the ceding company
Faculative reinsurer - ( answers)Negotiate on an individual risk basis. The reinsurer can accept
or reject each risk
Treaty reinsurer - ( answers)Automatic sharing of risks by the ceding company
Excess and surplus lines - ( answers)Risks that are difficult to insure in the normal marketplace
are attempted to be places in unauthorized carriers
Risk retention groups - ( answers)Spread liability among its members (only liability insurance)
Self- insurance - ( answers)Set aside reserve funds to cover loss and purchase excess insurance
to cover large losses above a given level
3
