LIFE, ACCIDENT AND HEALTH
INSURANCE OHIO EXAM QUESTIONS
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. - CORRECT ANSWER -Premiums are deductible,
benefits are taxed
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. - CORRECT ANSWER -Coordination of Benefits (COD) - they could have a primary and
secondary insurance but they won't pay out more than the total loss.
In which type of insurance company may stockholders share in the profits and losses of the insurer?
a. assessment
b. mutual
c. service
d. stock - CORRECT 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.
,In which company may policy owners receive policy dividends when there is a profit?
a. assessment
b. mutual
c. service
d. stock - CORRECT ANSWER -Mutual company.
Dividends, if paid, are not taxable and are never guaranteed
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 - CORRECT ANSWER -Twisting
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 - CORRECT ANSWER -45 days.
The insurer is automatically reinstated by 45 days unless the insurer rejects the insured.
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. - CORRECT 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.
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. - CORRECT ANSWER -Fully deductible.
Since 2003, 100% of premiums paid by a sole proprietor and his dependents are tax deductible.
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 - CORRECT 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.
, 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. - CORRECT ANSWER -Employer and the insurance company (insurer).
The employees are covered but only receive a Certificate of Insurance stating the amount of their
coverage.
Insurable risks must involve:
a. certain losses only.
b. certain and uncertain losses.
c. gambling.
d. the possibility of loss only. - CORRECT ANSWER -The possibility of loss only.
Remember, pure risk involves the chance of loss only. If there is any chance for gain, the risk is not
insurable. Also, if it is certain there will be a loss, the insurer will decline coverage since it is sure to lose
money.
An agent is a representative of the:
a. general agency system
b. insurance company
c. insured
d. policy owner - CORRECT ANSWER -insurance company.
Agents represent the insurer, brokers represent the insured.
INSURANCE OHIO EXAM QUESTIONS
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. - CORRECT ANSWER -Premiums are deductible,
benefits are taxed
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. - CORRECT ANSWER -Coordination of Benefits (COD) - they could have a primary and
secondary insurance but they won't pay out more than the total loss.
In which type of insurance company may stockholders share in the profits and losses of the insurer?
a. assessment
b. mutual
c. service
d. stock - CORRECT 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.
,In which company may policy owners receive policy dividends when there is a profit?
a. assessment
b. mutual
c. service
d. stock - CORRECT ANSWER -Mutual company.
Dividends, if paid, are not taxable and are never guaranteed
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 - CORRECT ANSWER -Twisting
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 - CORRECT ANSWER -45 days.
The insurer is automatically reinstated by 45 days unless the insurer rejects the insured.
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. - CORRECT 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.
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. - CORRECT ANSWER -Fully deductible.
Since 2003, 100% of premiums paid by a sole proprietor and his dependents are tax deductible.
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 - CORRECT 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.
, 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. - CORRECT ANSWER -Employer and the insurance company (insurer).
The employees are covered but only receive a Certificate of Insurance stating the amount of their
coverage.
Insurable risks must involve:
a. certain losses only.
b. certain and uncertain losses.
c. gambling.
d. the possibility of loss only. - CORRECT ANSWER -The possibility of loss only.
Remember, pure risk involves the chance of loss only. If there is any chance for gain, the risk is not
insurable. Also, if it is certain there will be a loss, the insurer will decline coverage since it is sure to lose
money.
An agent is a representative of the:
a. general agency system
b. insurance company
c. insured
d. policy owner - CORRECT ANSWER -insurance company.
Agents represent the insurer, brokers represent the insured.
