1|Page
Ohio Life, Accident & Health Insurance
Exam
Verified Questions and Answers
1. 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
2. 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.
3. In which type of insurance company may stockholders share in the profits
and losses of the insurer?
a. assessment
,2|Page
b. mutual
c. service
d. stock
ANSWER: Stock.
Whenever the insurance company has an increase in profits, the Board of Directors
may increase the dividend payment from the prior year so the stockholders share in
the increased profits.
4. 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
5. 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
,3|Page
ANSWER: Twisting
6. 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.
7. 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.
, 4|Page
8. 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.
9. 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.
10. 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.
Ohio Life, Accident & Health Insurance
Exam
Verified Questions and Answers
1. 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
2. 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.
3. In which type of insurance company may stockholders share in the profits
and losses of the insurer?
a. assessment
,2|Page
b. mutual
c. service
d. stock
ANSWER: Stock.
Whenever the insurance company has an increase in profits, the Board of Directors
may increase the dividend payment from the prior year so the stockholders share in
the increased profits.
4. 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
5. 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
,3|Page
ANSWER: Twisting
6. 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.
7. 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.
, 4|Page
8. 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.
9. 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.
10. 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.
