Free Insurance Licensing Ok-Life-Accident-and-Health-or-Sickness-Producer Practice Exam with Questions & Answers | Set: 2

In Oklahoma, the minimum age for a person of competent legal capacity to contract for life and health insurance is18, as this is the age of majority under Oklahoma law (Title 15 O.S. § 13). Individuals under 18 may be insured (e.g., as dependents or under juvenile policies), but they cannot enter into insurance contracts themselves unless emancipated.

Option A: Incorrect. Age 15 is below the age of majority.

Option B: Incorrect. Age 16 is below the age of majority.

Option C: Correct. Age 18 is the minimum age for contracting insurance in Oklahoma.

Option D: Incorrect. Age 21 is not required; 18 is sufficient.

This question falls under the Prometric content outline section on “State Insurance Statutes, Rules, and Regulations,” which covers eligibility to contract insurance.

Thefree-look provision, required in Oklahoma for life and health insurance policies (Title 36 O.S. § 4007 for life, § 4405 for health), allows the policyowner to return the policy within a specified period (typically 10 days for life, 30 days for Medigap) from receipt for afull refundof premiums paid, no questions asked. This protects consumers by allowing time to review the policy.

Option A: Incorrect. The insurer cannot rescind during the free-look period; that right applies to contestability.

Option B: Incorrect. The refund is full, not partial, during the free-look period.

Option C: Correct. The policyowner can return the policy for a full refund within the specified period.

Option D: Incorrect. The insurer cannot unilaterally alter the policy during the free-look period.

This question aligns with the Prometric content outline under “Provisions, Options, Exclusions, Riders, Clauses, and Rights,” which covers free-look provisions.

A stranger-owned life insurance (STOLI) policy involves an arrangement where a person or entity without an insurable interest in the insured initiates or procures a life insurance policy, typically for the purpose of financial gain. Oklahoma insurance regulations strictly prohibit such practices, as they violate the principle of insurable interest, which requires the policyowner to have a legitimate financial or emotional stake in the insured’s life.

The Oklahoma Life, Accident, and Health or Sickness Producer Study Guide defines STOLI as "an act, practice, or arrangement where a life insurance policy is procured at or prior to issuance for the benefit of a person who does not have an insurable interest in the insured, often involving third-party investors." This is distinct from a life settlement (option A), which involves the sale of an existing policy, or a settlement option (option B), which refers to payout methods. A financial transaction (option C) is too vague to apply. Thus, option D is correct.

Major medical insuranceis designed to cover significant healthcare expenses, particularly those related to hospitalization, surgeries, and other high-cost medical services. It focuses on providing comprehensive coverage for catastrophic or major medical events, as opposed to routine or preventive care, which may be covered to a lesser extent or through separate plans.

Option A: Incorrect. Preventive care is often included but is not the primary focus of major medical insurance.

Option B: Incorrect. Using in-network facilities reduces costs but is a feature of managed care plans, not the core focus of major medical insurance.

Option C: Correct. The focus of major medical insurance is covering hospitalization and other major expenses.

Option D: Incorrect. Providing care to the needy is associated with programs like Medicaid, not private major medical insurance.

This question falls under the Prometric content outline section on “Health Providers and Products,” which covers the characteristics of major medical insurance.

Awhole life insurance policyprovidespermanent coveragefor the insured’s entire life, as long as premiums are paid, along with a guaranteed death benefit and cash value accumulation. This is a key advantage over term life, which is temporary. Whole life premiums are typically higher than term life, and underwriting guidelines or premium flexibility depend on the insurer, not the product itself.

Option A: Incorrect. Underwriting guidelines vary by insurer, not by policy type.

Option B: Incorrect. Whole life has higher initial premiums compared to term life.

Option C: Incorrect. Whole life typically has fixed premiums, unlike universal life, which offers variable premiums.

Option D: Correct. Permanent coverage is a primary advantage of whole life insurance.

This question falls under the Prometric content outline section on “Life Products,” which covers the benefits of whole life insurance.

Amodified whole life policyfeatures premiums that arelower than typical whole life premiums during the initial years(e.g., first 3–5 years) to make the policy more affordable early on, thenhigher thereafterto compensate for the initial discount while maintaining lifelong coverage. This is a variation of whole life insurance, as defined in Oklahoma’s regulations (Title 36 O.S. § 4002).

Option A: Incorrect. Premiums do not decrease in the last few years; they increase after the initial period.

Option B: Incorrect. Premiums are not higher in the last few years compared to typical whole life; they adjust after the initial period.

Option C: Correct. Premiums are lower initially and higher thereafter.

Option D: Incorrect. Premiums are not higher initially and lower later; the opposite is true.

Under Oklahoma’s Insurance Code (Title 36 O.S. § 1435.13), transacting insurance without a valid license, such as after revocation, is afelonypunishable by a fine of up to $5,000, imprisonment for up to 7 years, or both, depending on the severity and intent. This reflects the serious nature of unlicensed insurance activity.

Option A: Incorrect. The fine limit is $5,000 for a felony, not $10,000.

Option B: Correct. The violation is a felony with a fine up to $5,000.

Option C: Incorrect. The violation is a felony, not a misdemeanor, with higher penalties.

Option D: Incorrect. Imprisonment is up to 7 years, not 10 years.

Ascheduled dental policyprovides coverage based on a predetermined schedule of benefits, which lists specific maximum dollar amounts payable for each dental procedure (e.g., $100 for a filling, $500 for a crown). This contrasts with comprehensive dental plans that may pay a percentage of expenses or cover all costs after a deductible.

Option A: Incorrect. Scheduled dental policies do not pay all expenses after a deductible; they limit payments to scheduled amounts.

Option B: Incorrect. Paying a percentage of expenses is typical of comprehensive dental plans, not scheduled policies.

Option C: Correct. Benefits are limited to a specific maximum dollar amount per procedure, as defined in the schedule.

Option D: Incorrect. Benefits are not paid as a lump sum directly to the insured; they are paid per procedure up to the scheduled limit.

This question aligns with the Prometric content outline under “Health Providers and Products,” which covers dental insurance structures.

Oklahoma insurance regulations mandate that health insurance policies providing child immunization coverage must not impose certain restrictions that could limit access to these benefits. Specifically, the Oklahoma Insurance Code, Title 36 O.S. § 6060.3, states that "benefits for immunizations required under child immunization coverage shall not be subject to prior authorization requirements." This ensures that children can receive necessary immunizations without delays caused by insurer approval processes.

The Oklahoma Life, Accident, and Health or Sickness Producer Study Guide further clarifies, "Child immunization benefits must be provided without prior authorization to promote timely access to preventive care. However, benefits may still follow a recommended immunization schedule or be subject to other policy terms like deductibles, unless otherwise specified." Options A, B, and D are not explicitly prohibited under the law, making option C the correct answer.

In Oklahoma’s Insurance Code (Title 36 O.S. § 105), aforeign insureris defined as an insurance company formed under the laws of another U.S. state or territory. This distinguishes it from adomestic insurer(formed in Oklahoma) and analien insurer(formed in a foreign country).

Option A: Incorrect. An insurer formed in Oklahoma is a domestic insurer.

Option B: Incorrect. An insurer from a foreign country is an alien insurer.

Option C: Correct. A foreign insurer is formed under the laws of another U.S. state or government.

Option D: Incorrect. Geographic proximity is irrelevant; the definition is based on legal formation.

This question aligns with the Prometric content outline under “State Insurance Statutes, Rules, and Regulations,” which covers insurer classifications.