Oklahoma Life, Health, & Accident-Life Practice Exam #1

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hicksmix6
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306145
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Oklahoma Life, Health, & Accident-Life Practice Exam #1
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2015-08-07 13:35:44
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Oklahoma
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Insurance
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L-113 to L-121
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  1. Which of the following is TRUE regarding dividends paid by a Mutual Insurer?
    a. insurance producer select the dividends
    b. dividends are guaranteed by the Life & Health Guarantee Association
    c. dividends are the same as cash value
    d. dividends are a refund of excess premium
    d. dividends are a refund of excess premium
  2. Which of the following is correct?
    A. applicant's total consideration is premium
    B. statements made by the applicant are considered representation not warranties
    C. negative information received from a Medical Information Bureau(MIB) by the insurer will be forwarded directly to the applicant upon request

    D. agreement is not one of the elements of a contract
    B. statements made by the applicant are considered representation not warranties
    (this multiple choice question has been scrambled)
  3. Information that would affect an underwriter's decision to accept the application is called:
    a. representation
    b. warranty
    c. material fact
    d. misstatement of age

    c. material fact
  4. What life insurance policy has a level premium and a level face amount for the term of the contract?
    a. decreasing term
    b. ordinary life
    c. modified whole life
    d. universal life
    b. ordinary life
  5. Which of the following insurance policies could be renewed without the insured proving insurability?
    a. decreasing term
    b. credit life
    c. 5-yr level term
    d. credit disability
    c. 5-yr level term
  6. All of the follwoing are true, EXCEPT?
    a. whole leife builds cash value
    b. endowments build cash value faster than a whole life policy
    c. term does not build cash value
    d. insured must wait until the end of the term policy before converting to a permanent policy
    d. insured must wait until the end of the term policy before converting to a permanent policy
  7. Which of the following is TRUE?
    a. entire contract clause permits an insurance company to delay an insured's claim based on home-office rules found in the policy contract
    b. convertibility provision allows an insured to convert from whole life to term if the premium gets too high
    c. decreasing term policy has a decreasing premium and a level death benefit
    d. whole life policy is designed to provide a death benefit beyond retirement
    d. whole life policy is designed to provide a death benefit beyond retirement
  8. All of the following are characteristics of the family policy, EXCEPT?
    a. breadwinner is not the only insured
    b. children may be added as they are born for additional premium
    c. premium is the same regardless of the number of children
    d. term coverage on the spouse can be converted to permanent insurance
    b. children may be added as they are born for additional premium
  9. Which of the following best describes what happens to the monthly amount of payment from an annuity when the life income period certain is selected?
    a. monthly payment will be higher than joint and survivor
    b. monthly payment will be higher than life income
    c. annuitant receives the payments until the period certain is exhausted
    d. annuitant receives the payment until exhausted and a refund is made to a contingent payee
    a. monthly payment will be higher than joint and survivor
  10. Which type of annuity does NOT exist?
    b. flexible premium immediate annuity
  11. Which of the following should receive the highest amount of monthly lifetime income from a $200,000 single premium immediate annuity?
    a. 65 year old
    b. 55 year old
    c. 45 year old
    d. 35 year old
    a. 65 year old
  12. All of the following would be advantages for an employee covered by an employer's group insurance policy, EXCEPT?
    a. fewer exclusions
    b. fewer preexisting conditions
    c. higher premiums
    d. higher limits
    c. higher premiums
  13. Four years ago, Libby, a school teacher, purchased a 5-year R&C term policy in the amount of $250,000.  She has been selected by NASA to be the first school teacher to fly in space.  What can Libby's life insurance company do?
    a. raise the premium
    b. cancel the policy immediately
    c. non renew her policy on the next anniversary
    d. nothing
    d. nothing
  14. Which of the following policies would have an increase in premium every year?
    a. single pay whole life
    b. 5-year R&C
    c. annually renewable term
    d. endowments
    c. annually renewable term
  15. Mabel misstates her age on a life application and dies within 6 months.  Which would describe the insurer's action?
    a. deny because of the incontestable clause
    b. deny because of the misstatement of age rule
    c. pay the death claim in full
    d. pay the death claim but adjust the amount of the death benefit
    d. pay the death claim but adjust the amount of the death benefit
  16. Which of the following is NOT true regarding the taxation of life insurance policies?
    a. death benefits paid in a lump sum are subject to income tax
    b. loans are income tax free
    c. cash surrender amounts are taxable in certain situations
    d. growth of cash value is not subject to taxation as long as the policy is in force.
    a. death benefits paid in a lump sum are subject to income tax
  17. If a policy owner wants to maintain complete control of a policy but name their spouse as the beneficiary, they would use which type of beneficiary designation?
    a. irrevocable
    b. per capita
    c. contingent
    d. revocable
    d. revocable
  18. All of the follwoing would qualify for special tax treatment using a 1035(a) tax-free exchange, EXCEPT?
    a. life policy to annuity
    b. life policy to a life policy
    c. annuity to a life policy
    d. annuity to an annuity
    c. annuity to a life policy
  19. Kelly is applying for a $500,000 term life insurance policy and was given a conditioanl receipt by the producer at the time of application.  She is scheduled to take her physical exam with her doctor in 2 weeks.  Six days after receiving the conditional receipt, she dies.  Which of the following is true?
    a. beneficiary will receive nothing
    b. beneficiary will receive $500,000
    c. beneficiary will receive a refund of premium without interest
    d. beneficiary will receive a refund of premium with interest
    c. beneficiary will receive a refund of premium without interest
  20. Which occurrence could create a double payment?
    a. guaranteed insurability
    b. accidental death
    c. premium waiver
    d. return of premium
    b. accidental death
  21. Which of the following is NOT true regarding a Participating Whole Life Policy written by a Mutual Insurance Company?
    a. policy owner controls the policy
    b. dividends are guaranteed
    c. dividend options can be changed by the policy owner
    d. dividends are tax free
    b. dividends are guaranteed
  22. A participating straight life policy contract written by a mutual insurance company will include all of the following information, EXCEPT?
    a. copy of Part I of the application
    b. predetermined interest rate
    c. guaranteed dividend chart
    d. guaranteed non-forfeiture values table
    c. guaranteed dividend chart
  23. Regarding a Double Indemnity rider which of the following is true?
    a. death must occur within 30 days of the accident

    b. it pays double the cash value because of accidental death
    c. pays double the death benefit resulting from an cause of death
    d. pays double the death benefit resulting from an accidental cause of death
    d. pays double the death benefit resulting from an accidental cause of death
  24. Which of the following best describes the Guaranteed Insurability Rider?
    a. lump sum payment
    b. double death benefit
    c. waive the premium if the insured become uninsurable
    d. insured may purchase more amounts of insurance without proving insurability
    d. insured may purchase more amounts of insurance without proving insurabilit
  25. An Accidental Death & Dismemberment (AD&D) rider is:
    a. additional benefit provided at no additional premium to the policy owner
    b. only available for a limited number of years
    c. pays a lump sum benefit for death or dismemberment
    d. pays a monthly amount if the insured becomes disabled
    c. pays a lump sum benefit for death or dismemberment
  26. Jane is applying for a $50,000 non-medical exam life insurance policy and gives the producer a premium check for which she receives a conditional receipt.  Jane dies three days later.  Which of the following is true?
    a. will receive a refund of premium with interest
    b. will receive a refund of premium without interest
    c. Underwriter will continue to underwrite the case as if Jane were alive and pay the death claim if the policy is approved
    d. Underwriter would immediately issue a $50,000 death claim check
    c. Underwriter will continue to underwrite the case as if Jane were alive and pay the death claim if the policy is approved
  27. An underwriter for life insurance would consider all of the following, EXCEPT?
    A. age of the proposed insured
    B. blood test
    C. family history
    D. nationality of the proposed insured
    D. nationality of the proposed insured
    (this multiple choice question has been scrambled)
  28. Which of the following events occurring in the tax year would create a taxable income?
    a.beneficiary's receipt of the death benefit of a group life policy
    b. policy owner's interest earnings credited in a fixed annuity
    c. policy owner's receipt of a dividend from a participating life insurance policy
    d. policy owner's receipt of the cash surrender value of a non-qualified annuity
    d. policy owner's receipt of the cash surrender value of a non-qualified annuity
  29. After a life insurance policy has been in effect for a specific period of time, what policy provision prevents the insurer from denying coverage based on any error, concealment, or misstatement made by the insured?
    a. insuring clause
    b. incontestability
    c. waiver
    d. non-forfeiture
    b. incontestability
  30. According to the Common Disaster Death Act, who is considered to have died first if the insured and primary beneficiary die simultaneously?
    a. beneficiary
    b. neither the insured or the beneficiary
    c. insured
    d. none of the above
    a. beneficiary
  31. The primary beneficiary on a life insurance policy is deceased.  Upon the death of the insured, the death benefit will:
    a. paid to the contingent beneficiary
    b. denied
    c. paid to insured estate
    d. primary beneficiary estate
    a. paid to the contingent beneficiary
  32. Which of the following would be considered third party ownership?
    a. group life policy on employee
    b. insured's whole life policy
    c. key person life insurance policy
    d. insured term life policy
    c. key person life insurance policy
  33. What is a modified endowment contract?
    a. ruled illegal by the IRS in 1997
    b. endows before age 100 and used for retirement
    c. fails the seven-pay test; therefore, losing the tax deferred status of the cash value
    d. endowment policy modified with accident death provision
    c. fails the seven-pay test; therefore, losing the tax deferred status of the cash value
  34. The dividend paid on life insurance policies is:
    a. policy owner's share of the insurance company's excess funds
    b. insured's share of excess mortality costs
    c. stockholder's share of the insurance company's profit
    d. interest earned on a participating policy's cash value
    a. policy owner's share of the insurance company's excess funds
  35. When a person receives payment under an accelerate benefit, which of the following is true?
    a. amount must be repaid with interest by the beneficiary
    b. amount is deducted from the policy's death benefit
    c. amount is deducted from the cash value
    d. amount can be withdrawn for any reason
    b. amount is deducted from the policy's death benefit
  36. The dividend paid under a particiapting life insurance policy is:
    a. bonus paid for promotional purpose
    b. share of an insurance company's operating profit
    c. policy reserve investment return
    d. return of excess premium charges
    d. return of excess premium charges
  37. When a straight life insurance policy owner no longer wants to pay the premiums, any cash value accumulations may be used to buy a lesser amount of the same type of insurance.  When this is done, the new policy would be known as:
    a. reduced paid up
    b. convertible insurance
    c. extended insurance
    d. additional insurance
    a. reduced paid up
  38. William is not in good health and has $100,000 of group life insurance coverage under his employer's group life insurance policy.  Upon William's termination from employment, what law will permit William to continue the life insurance?
    a. National Association of Insurance Commissioners (NAIC)
    b. Oklahoma Medical Information Confidentiality Act
    c. Oklahoma Fair Credit Act
    d. Oklahoma Group Life Conversion
    d. Oklahoma Group Life Conversion
  39. Five years ago, Abner purchased a $100,000 whole life policy with a double indemnity rider attached.  Abner commits suicide.  How much, if any, will the policy pay?
    a. nothing, both whole life and double indemnity exclude death by suicide
    b. whole life will pay $100,000 and the double indemnity will pay zero because suicide is not considered an accident
    c. whole life will pay $100,000 and the double indemnity will pay $100,000 for a total of $200,000 because the death was accidental
    d. whole life will pay $100,000 and the double indemnity will pay $200,000 for a total of $300,000
    b. whole life will pay $100,000 and the double indemnity will pay zero because suicide is not considered an accident
  40. Scott is a male age 45 and in good health, he works out at the gym 3 days a week and smokes a cigar twice a week.
    a. normal
    b. preferred
    c. standard
    d. substandard
    c. standard
  41. Bill purchased a $750,000 life insurand policy, 28 months ago, when he was employed as a corporate executive.  Bored with corporate life, he started anew career today as a stunt double.  If Bill was killed in an occupational accident, the insurance company would:
    a. pay the full death benefit
    b. pay a portion of the death benefit based on the "change of occupation" provision
    c. contest the pay based on material misrepresentation on the application
    d. void the policy and return all premiums plus interest
    a. pay the full death benefit
  42. If life insurance is used to protect against premature death, what policy is used to protect against the risk of outliving your income?
    a. endowment
    b. annuity
    c. premium waiver rider
    d. guaranteed insurability rider
    b. annuity
  43. A "revocable" life insurance beneficiary is one:
    a. can be changed with the knowledge of the beneficiary only
    b. can only be changed by the beneficiary
    c. cannot be changed
    d. can be changed without the knowledge of the beneficiary
    d. can be changed without the knowledge of the beneficiary
  44. An accidental death benefit would pay in which of the following situations?
    a. died while robbing a convience store
    b. died while riding a go cart in heavy traffic
    c. died while undergoing surgery for the removal of a tumor
    d. died while on death row.
    b. died while riding a go cart in heavy traffic
  45. Regarding the premium payments of a universal life insurance policy, which of the following is NOT true?
    a. premiums can be level
    b. premiums can be increased
    c. premiums skipped must be repaid
    d. premiums can be decreased
    c. premiums skipped must be repaid
  46. If the death of the annuitant occurs during the accumulation period:
    a. value of the annuity is excluded from the gross estate
    b. value of the annuity is paid to the designated beneficiary
    c. annuity proceeds remain with the insurer
    d. value of the annuity is taxed at capital gains rates
    b. value of the annuity is paid to the designated beneficiary
  47. Tanner is a participant under a group life policy, has $50,000 of life insurance coverage.  What is the name of the provision that will allow Tanner to receive an individual life insurance policy without evidence of insurability?
    a. guaranteed issue
    b. convertibility
    c. non cancelable
    d. renewable
    b. convertibility
  48. A life annuity pays an income:
    a. during the annuitant's lifetime with no refund upon his/her death
    b guaranteed total amount either to the annuitant or the beneficiary
    c. guaranteed to be equal to the purchase price of the annuity
    d. joint annuitants until one dies, after which all payments stop
    a. during the annuitant's lifetime with no refund upon his/her death
  49. Jim Bob, a high school teacher, applied for an individual life insurance policy in the amount of $300,000.  All of the following are sources of underwriting information, EXCEPT?
    a. application completed by the producer
    b. Medical Information Bureau (MIB)
    c. inspection reports completed by a private independent investigating firm
    d. applicant's employer
    d. applicant's employer
  50. Jane is applying for a $250,000 life insurance policy.  She has completed Part I of the application with the producer, paid the initial premium, and received a conditional receipt.  Part II of the application will be completed during the Paramedic Exam scheduled in 4 days.  Jane dies in an auto accident on the way to the Paramedic exam.  Which of the following is TRUE? 
    a. refund of premium without interest
    b. refund of premium with interest
    c. $25,000 immediately
    d. underwriter will continue to underwrite the case as if Jane were alive and pay the death benefit to the beneficiary if policy is approved
    a. refund of premium without interest

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