Free Insurance Licensing OH-Life-Agent-Series-11-44 Practice Exam with Questions & Answers | Set: 4

The primary purpose of licensing insurance agents is to protectthe publicby ensuring that agents meet minimum qualifications and adhere to ethical standards. The Ohio Department of Insurance oversees the licensing process to maintain public trust and ensure that agents are competent to sell insurance products.

The "Life Only" annuity payout option, also known as a straight life annuity, provides periodic payments to the annuitant for as long as they live. Upon the annuitant's death, all payments cease, and no further benefits are paid to any beneficiaries, regardless of how soon after annuitization the death occurs. This option typically offers the highest periodic payment amount because it carries the greatest risk to the annuitant, with no provision for return of principal or continuation of payments after death.

AnAccelerated Death Benefit (ADB)is a provision in a life insurance policy that allows the policyholder to receive a portion of the death benefit while still alive, under certain qualifying conditions. According to the Ohio Administrative Code Rule 3901-6-06, accelerated death benefits are payable to the policyowner during the lifetime of the insured upon the occurrence of a qualifying event, which includes:

A medical condition that drastically reduces the potential life span of the insured to a period of time specified in the policy, often 24 months or less.

A medical condition that requires extraordinary medical intervention, such as a major organ transplant or continuous artificial life support, without which the insured would die.

A condition that normally results in continuous confinement in an eligible institution, if the insured is expected to remain there for the rest of their life.

The amount received through an ADB reduces the death benefit payable to beneficiaries upon the insured's death.

Under Ohio Revised Code Section 3965.02, each licensee is required to develop, implement, and maintain a comprehensive written information security program based on the licensee's risk assessment. This program must include administrative, technical, and physical safeguards for the protection of nonpublic information and the licensee's information system.

During the accumulation period of an annuity, the policyowner holds the rights to the contract, including the ability to surrender the annuity. Surrendering the annuity means the policyowner can terminate the contract and receive the accumulated value, subject to any applicable surrender charges or tax implications. The annuitant is the individual whose life expectancy is used to determine the annuity payments, but they do not have ownership rights unless they are also the policyowner.

Risk sharinginvolvesdistributing risk among a group, such as in mutual insurance companies or professional groups pooling money for coverage. This differs from risk transfer (insurance) or risk avoidance.

"Risk sharing occurs when a group of individuals or entities pools resources to mutually cover potential losses, such as pooling funds to cover professional liability."

Variable universal life insurancecombines flexible premium options and death benefit features of universal life withinvestment choicestypically found in variable life policies. Theunique featureis thepolicyholder’s ability to select investment optionsfrom a separate account to maximize returns.

"Variable universal life insurance allows the policyholder to allocate premium dollars to a variety of separate accounts which may increase or decrease in value based on investment performance."

Decreasing term insuranceis specifically designed for situations like mortgages. Thedeath benefit decreases over time, mirroring the decreasing balance of a mortgage. It is cost-effective and commonly used for mortgage protection.

"Decreasing term insurance provides a death benefit that decreases over time, typically used to cover a loan or mortgage, ensuring it is paid off if the insured dies before full repayment."

A Single Premium Whole Life Insurance policy is a type of permanent life insurance where the policyholder makes a one-time lump-sum payment to fully fund the policy. This single payment covers the entire cost of the policy, eliminating the need for future premium payments. The policy provides a guaranteed death benefit and accumulates cash value over time, which grows on a tax-deferred basis.

This structure is advantageous for individuals who have a substantial amount of capital and wish to secure lifelong insurance coverage without the obligation of ongoing premium payments.

An insurable interest is a legal requirement in life insurance contracts to prevent moral hazard. In Ohio, insurable interest must exist at the time of application — not at the time of death. This ensures that the policyholder has a legitimate, financial or emotional interest in the insured person’s life. Distant family or business relationships may not always qualify unless there’s a financial dependency.