Ohio Life Insurance Exam Correct 100%
To qualify for appointment of agent - ANSWER 18 YOA, US citizenship not required, no
minimum residency
Original certificate good for.... - ANSWER 180 days
Renewal for license - ANSWER beinnially on birth month, $5 fee
Types of risk - ANSWER Pure risk - covered by insurance
Speculative risk - not covered (gambling)
How to handle risk - ANSWER avoid it
retain it - self insurance
reduce it
share it
transfer it - buy insurance, spreads risk to large group
Mortality Rate - ANSWER based on "law of large numbers"
by age 100 we assume everyone dies
females live longer
Principal - ANSWER The insurance company
The agent represents the principal
Implied Authority - ANSWER Needed to do job
Not written in contract
Expressed Authority - ANSWER written out authority
ex. collecting premiums...
Apparent Authority - ANSWER actions seem to be those of principal
ex. business cards, applications....
Change of name and address - ANSWER 30 days to be reported
Fiduciary - ANSWER financial trust
timely manner
agents cannot comingle
Amount of solicitors allowed to be hired - ANSWER unlimited
Brokers - ANSWER Represent their client/insured person
Consultants - ANSWER Sell their advice for a fee
, Usually no commission stuff
Legal Contracts Require - ANSWER competent parties
legal purpose
consideration
offer and acceptance
Adhesion - ANSWER company has responsibility to write the policy and the client has to
comply (take it or leave it)
cash value not guaranteed
State life license and federal securities license
Total Needs - ANSWER What do you owe?
How much insurance a person needs by measuring their final expenses, mortgage,
education and family income requirements
Human Life value - ANSWER Lost income
multiplying their income by their expected working years
Pros and Cons to Term - ANSWER Pros: cheap, can be converted w/o insurability
Cons: temporary, db only or premiums increase
Pros and Cons to Permanent - ANSWER Pros: guaranteed cash value and death
benefit, fixed premiums
Cons: more expensive at issue than term
Pros and Cons to Universal Life - ANSWER Pros: very flexible policy, adjustable, less
expensive than life
Cons: proposals are based on assumed rates of interest, interest goes up or down
Universal Life Level A - ANSWER Level
Risk lowers as cash value rises
Universal Life Level B - ANSWER Increasing
Risk level stays same while cash value rises
Pros and Cons to Variable LIfe - ANSWER Pros: may grow more than Universal Life or
Ordinary Life, face amount is guaranteed
Cons: no guarantee of cash value
To qualify for appointment of agent - ANSWER 18 YOA, US citizenship not required, no
minimum residency
Original certificate good for.... - ANSWER 180 days
Renewal for license - ANSWER beinnially on birth month, $5 fee
Types of risk - ANSWER Pure risk - covered by insurance
Speculative risk - not covered (gambling)
How to handle risk - ANSWER avoid it
retain it - self insurance
reduce it
share it
transfer it - buy insurance, spreads risk to large group
Mortality Rate - ANSWER based on "law of large numbers"
by age 100 we assume everyone dies
females live longer
Principal - ANSWER The insurance company
The agent represents the principal
Implied Authority - ANSWER Needed to do job
Not written in contract
Expressed Authority - ANSWER written out authority
ex. collecting premiums...
Apparent Authority - ANSWER actions seem to be those of principal
ex. business cards, applications....
Change of name and address - ANSWER 30 days to be reported
Fiduciary - ANSWER financial trust
timely manner
agents cannot comingle
Amount of solicitors allowed to be hired - ANSWER unlimited
Brokers - ANSWER Represent their client/insured person
Consultants - ANSWER Sell their advice for a fee
, Usually no commission stuff
Legal Contracts Require - ANSWER competent parties
legal purpose
consideration
offer and acceptance
Adhesion - ANSWER company has responsibility to write the policy and the client has to
comply (take it or leave it)
cash value not guaranteed
State life license and federal securities license
Total Needs - ANSWER What do you owe?
How much insurance a person needs by measuring their final expenses, mortgage,
education and family income requirements
Human Life value - ANSWER Lost income
multiplying their income by their expected working years
Pros and Cons to Term - ANSWER Pros: cheap, can be converted w/o insurability
Cons: temporary, db only or premiums increase
Pros and Cons to Permanent - ANSWER Pros: guaranteed cash value and death
benefit, fixed premiums
Cons: more expensive at issue than term
Pros and Cons to Universal Life - ANSWER Pros: very flexible policy, adjustable, less
expensive than life
Cons: proposals are based on assumed rates of interest, interest goes up or down
Universal Life Level A - ANSWER Level
Risk lowers as cash value rises
Universal Life Level B - ANSWER Increasing
Risk level stays same while cash value rises
Pros and Cons to Variable LIfe - ANSWER Pros: may grow more than Universal Life or
Ordinary Life, face amount is guaranteed
Cons: no guarantee of cash value
