Ohio Life and Health Practice Exam
An insured has a stop-loss limit of $5,000, a deductible of $500, and an 80/20 coinsurance. The insured
incurs $25,000 of covered losses. How much will the insured have to pay?
$500
$5,000
$5,400
$5,600 ANS: $5,000
Which of these is NOT subject to income taxation under Modified Endowment Contract (MEC)
Loan against the cash value
Policy withdrawal
Policy Dividend
Death Benefit ANS: Death benefit
An indemnity plan
Pays both the insured and health care provider
Provides the insured a specific dollar amount for services
Pays the health care provider directly for services rendered
Is typically issued as a group plan ANS: provides the insured a specific dollar amount for services
,Chris is an insured bricklayer who severed his left hand in an automobile accident. Although his primary
duty cannot be performed, Chris is also a substitute high school teacher. He collects a full disability
income check every month. How does his policy define total disability?
Recurrent
Any occupation
Own occupation
Presumptive ANS: Own occupation
A policyowner can receive an immediate payment before the insured dies by using a(n)
viatical settlement contract
buy-sell arrangement
adhesion agreement
spendthrift plan ANS: viatical settlement contract
Signatures for an insurance application MUST be obtained by the producer from all of the following
sources EXCEPT
The producer
The insured
The policyowner
The beneficiary ANS: The beneficiary
, All of the following are considered appropriate uses of life insurance for business purposes EXCEPT
Attracting quality employees by offering a group life plan
Funding an entity buy-sell agreement
Protecting the business by covering key employees with life insurance
Protecting the business by covering entry level employees with life insurance ANS: Protecting the
business by covering entry level employees with life insurance
Elizabeth is the beneficiary of a life insurance policy. She is receiving the death benefit in payments of
$10,000 per month until the principal and interest has been paid out. Which option was chosen?
Fixed period
Fixed amount
Life income
Interest only ANS: Fixed amount
Term insurance is appropriate for someone who
Seeks living benefits for themselves
Seeks a policy that builds cash value
Seeks temporary protection and lower premiums
Seeks permanent protection and higher premiums ANS: Seeks temporary protection and lower
premiums
Sole proprietors are permitted tax deductions for health cost paid from their earnings in the amount of
cost that exceed 7 1/2 % of AGI
An insured has a stop-loss limit of $5,000, a deductible of $500, and an 80/20 coinsurance. The insured
incurs $25,000 of covered losses. How much will the insured have to pay?
$500
$5,000
$5,400
$5,600 ANS: $5,000
Which of these is NOT subject to income taxation under Modified Endowment Contract (MEC)
Loan against the cash value
Policy withdrawal
Policy Dividend
Death Benefit ANS: Death benefit
An indemnity plan
Pays both the insured and health care provider
Provides the insured a specific dollar amount for services
Pays the health care provider directly for services rendered
Is typically issued as a group plan ANS: provides the insured a specific dollar amount for services
,Chris is an insured bricklayer who severed his left hand in an automobile accident. Although his primary
duty cannot be performed, Chris is also a substitute high school teacher. He collects a full disability
income check every month. How does his policy define total disability?
Recurrent
Any occupation
Own occupation
Presumptive ANS: Own occupation
A policyowner can receive an immediate payment before the insured dies by using a(n)
viatical settlement contract
buy-sell arrangement
adhesion agreement
spendthrift plan ANS: viatical settlement contract
Signatures for an insurance application MUST be obtained by the producer from all of the following
sources EXCEPT
The producer
The insured
The policyowner
The beneficiary ANS: The beneficiary
, All of the following are considered appropriate uses of life insurance for business purposes EXCEPT
Attracting quality employees by offering a group life plan
Funding an entity buy-sell agreement
Protecting the business by covering key employees with life insurance
Protecting the business by covering entry level employees with life insurance ANS: Protecting the
business by covering entry level employees with life insurance
Elizabeth is the beneficiary of a life insurance policy. She is receiving the death benefit in payments of
$10,000 per month until the principal and interest has been paid out. Which option was chosen?
Fixed period
Fixed amount
Life income
Interest only ANS: Fixed amount
Term insurance is appropriate for someone who
Seeks living benefits for themselves
Seeks a policy that builds cash value
Seeks temporary protection and lower premiums
Seeks permanent protection and higher premiums ANS: Seeks temporary protection and lower
premiums
Sole proprietors are permitted tax deductions for health cost paid from their earnings in the amount of
cost that exceed 7 1/2 % of AGI
