Ohio Life Exam 11-44
An insured owns a term policy with a guaranteed renewable option. When the end of
the policy draws near, the insured answers medical questions in order to prove
insurability and qualifies for a discounted premium rate. Which option best describes
this scenario?
1) preferred premium reduction
2) contract review
3) revision of consideration
4) re-entry - ✔️✔️4) re-entry
What method do insurers use to protect themselves against catastrophic losses?
1) pro rata liability
2) risk management
3) reinsurance
4) indemnity - ✔️✔️3) reinsurance
All of the following are true about variable products EXCEPT:
1) the cash value is not guaranteed
2) policy owners bear the investment risk
3) the premiums are invested in the insurer's general account
4) the minimum death benefit is guaranteed - ✔️✔️3) the premiums are invested in the
insurer's general account
All of the following are characteristics of a group life insurance plan EXCEPT:
1) the participants receive a Certificate of Insurance as their proof of insurance
2) a minimum number of participants is required in order to underwrite the plan
3) the cost of the plan is determined by the average age of the group
4) there is a requirement to prove insurability on the part of the participants - ✔️✔️4)
there is a requirement to prove insurability on the part of the participants
Which of the following allows the insurer to relieve a minor insured from premium
payments if the minor's parents have died or become disabled?
1) waiver of premium
2) payor benefit
3) humping juvenile
4) juvenile premium provision - ✔️✔️2) payor benefit
Which of the following will be included in a policy summary?
1) copies of illustrations and application
2) comparisons with similar policies
3) primary and secondary beneficiary designations
,4) premium amounts and surrender values - ✔️✔️4) premium amounts and surrender
values
A viatical settlement is arranged between a viatical company and a/an:
1) terminally ill insured
2) insurance producer
3) beneficiary
4) lender - ✔️✔️1) terminally ill insured
If a settlement option is not chosen by the policyowner or the beneficiary, which option
will be used?
1) life income
2) fixed period
3) fixed amount
4) lump sum - ✔️✔️4) lump sum
When çalculating the amount a policyowner may borrow from a variable life policy, what
must be
subtracted from the policy's cash value?
1) outstanding loans and interest
2) the face amount
3) mortality costs
4) the cash surrender amount - ✔️✔️1) outstanding loans and interest
The rider in a whole life policy that allows the company to forgo collecting the premium if
the insured is disabled is called:
1) waiver of cost of insurance
2) payor benefit
3) waiver of premium
4) guaranteed insurability - ✔️✔️3) waiver of premium
if a life policy allows the policyowner to make periodic additions to the face amount at
standard
rates, without proving insurability, the policy includes a:
1) cost of living provision
2) nonforfeiture option
3) guaranteed insurability rider
4) paid-up additions option - ✔️✔️3) guaranteed insurability rider
Which of the following provisions in annuity contracts allow the owner to surrender the
annuity
interest rates drop to a specified level?
1) annuitization
2) bail-out
3) surrender
, 4) nonforfeiture - ✔️✔️2) bail-out
When the policyowner specifies a dollar amount in which installments are to be paid,
he/she has chosen which settlement option?
1) extended term
2) fixed amount
3) fixed period
4) life income period certain - ✔️✔️2) fixed amount
The hearing for a cease and desist order must occur within how many days of the order
date?
1) 15
2) 30
3) 45
4) 60 - ✔️✔️1) 15
When a life insurance policy stipulates that the beneficiary will receive payments in
specified
installments or for a specified number of years, what provision prevents the beneficiary
from
changing or borrowing from the planned installments?
1) spendthrift provision
2) settlement option
3) accelerated benefit provision
4) loan provision - ✔️✔️1) spendthrift provision
An IRA uses immediate annuities to pay out benefits; the IRA owner is nearly 75 years
old when he decides to collect distributions. What kind of penalty would the IRA owner
pay?
1) no penalties, since the owner is older than 59 1/2
2) 10% for early withdrawal
3) 15% for early withdrawal
4) 50% tax on the amount not distributed as required - ✔️✔️4) 50% tax on the amount
not distributed as required
During, the accumulation period in a nonqualified annuity, what are the tax
consequences of a withdrawal?
1) nontaxable principal may be withdrawn first, but the 10% penalty will be imposed if
under age 59 1/2
2) both interest and principal are taxed; no other penalties are imposed
3) neither interest nor principal is taxed, but penalties may be imposed
4) taxable interest will be withdrawn first and the 10% penalty will be imposed if under
age 59 1/2 - ✔️✔️4) taxable interest will be withdrawn first and the 10% penalty will be
imposed if under age 59 1/2
An insured owns a term policy with a guaranteed renewable option. When the end of
the policy draws near, the insured answers medical questions in order to prove
insurability and qualifies for a discounted premium rate. Which option best describes
this scenario?
1) preferred premium reduction
2) contract review
3) revision of consideration
4) re-entry - ✔️✔️4) re-entry
What method do insurers use to protect themselves against catastrophic losses?
1) pro rata liability
2) risk management
3) reinsurance
4) indemnity - ✔️✔️3) reinsurance
All of the following are true about variable products EXCEPT:
1) the cash value is not guaranteed
2) policy owners bear the investment risk
3) the premiums are invested in the insurer's general account
4) the minimum death benefit is guaranteed - ✔️✔️3) the premiums are invested in the
insurer's general account
All of the following are characteristics of a group life insurance plan EXCEPT:
1) the participants receive a Certificate of Insurance as their proof of insurance
2) a minimum number of participants is required in order to underwrite the plan
3) the cost of the plan is determined by the average age of the group
4) there is a requirement to prove insurability on the part of the participants - ✔️✔️4)
there is a requirement to prove insurability on the part of the participants
Which of the following allows the insurer to relieve a minor insured from premium
payments if the minor's parents have died or become disabled?
1) waiver of premium
2) payor benefit
3) humping juvenile
4) juvenile premium provision - ✔️✔️2) payor benefit
Which of the following will be included in a policy summary?
1) copies of illustrations and application
2) comparisons with similar policies
3) primary and secondary beneficiary designations
,4) premium amounts and surrender values - ✔️✔️4) premium amounts and surrender
values
A viatical settlement is arranged between a viatical company and a/an:
1) terminally ill insured
2) insurance producer
3) beneficiary
4) lender - ✔️✔️1) terminally ill insured
If a settlement option is not chosen by the policyowner or the beneficiary, which option
will be used?
1) life income
2) fixed period
3) fixed amount
4) lump sum - ✔️✔️4) lump sum
When çalculating the amount a policyowner may borrow from a variable life policy, what
must be
subtracted from the policy's cash value?
1) outstanding loans and interest
2) the face amount
3) mortality costs
4) the cash surrender amount - ✔️✔️1) outstanding loans and interest
The rider in a whole life policy that allows the company to forgo collecting the premium if
the insured is disabled is called:
1) waiver of cost of insurance
2) payor benefit
3) waiver of premium
4) guaranteed insurability - ✔️✔️3) waiver of premium
if a life policy allows the policyowner to make periodic additions to the face amount at
standard
rates, without proving insurability, the policy includes a:
1) cost of living provision
2) nonforfeiture option
3) guaranteed insurability rider
4) paid-up additions option - ✔️✔️3) guaranteed insurability rider
Which of the following provisions in annuity contracts allow the owner to surrender the
annuity
interest rates drop to a specified level?
1) annuitization
2) bail-out
3) surrender
, 4) nonforfeiture - ✔️✔️2) bail-out
When the policyowner specifies a dollar amount in which installments are to be paid,
he/she has chosen which settlement option?
1) extended term
2) fixed amount
3) fixed period
4) life income period certain - ✔️✔️2) fixed amount
The hearing for a cease and desist order must occur within how many days of the order
date?
1) 15
2) 30
3) 45
4) 60 - ✔️✔️1) 15
When a life insurance policy stipulates that the beneficiary will receive payments in
specified
installments or for a specified number of years, what provision prevents the beneficiary
from
changing or borrowing from the planned installments?
1) spendthrift provision
2) settlement option
3) accelerated benefit provision
4) loan provision - ✔️✔️1) spendthrift provision
An IRA uses immediate annuities to pay out benefits; the IRA owner is nearly 75 years
old when he decides to collect distributions. What kind of penalty would the IRA owner
pay?
1) no penalties, since the owner is older than 59 1/2
2) 10% for early withdrawal
3) 15% for early withdrawal
4) 50% tax on the amount not distributed as required - ✔️✔️4) 50% tax on the amount
not distributed as required
During, the accumulation period in a nonqualified annuity, what are the tax
consequences of a withdrawal?
1) nontaxable principal may be withdrawn first, but the 10% penalty will be imposed if
under age 59 1/2
2) both interest and principal are taxed; no other penalties are imposed
3) neither interest nor principal is taxed, but penalties may be imposed
4) taxable interest will be withdrawn first and the 10% penalty will be imposed if under
age 59 1/2 - ✔️✔️4) taxable interest will be withdrawn first and the 10% penalty will be
imposed if under age 59 1/2
