Free Insurance Licensing Ok-Life-Accident-and-Health-or-Sickness-Producer Practice Exam with Questions & Answers | Set: 3

In Health Maintenance Organizations (HMOs), thegatekeeper strategyinvolves a primary care physician (PCP) who coordinates patient care and provides referrals to specialists. This ensures that care is managed efficiently and only necessary specialist visits are authorized, aligning with the HMO’s cost-containment model.

Option A: Incorrect. Refusing coverage for preexisting conditions is unrelated to the gatekeeper role and is regulated by HIPAA, not HMO strategy.

Option B: Correct. The gatekeeper strategy requires referrals from a PCP to see specialists, a hallmark of HMO plans.

Option C: Incorrect. HMOs encourage preventive care, not preventing service use, to manage costs.

Option D: Incorrect. Supplemental services at additional cost are not part of the gatekeeper strategy.

This question falls under the Prometric content outline section on “Health Providers and Products,” which covers HMO structures and strategies.

Under Oklahoma’s Insurance Code (Title 36 O.S. § 1435.13), a producer who knowingly and willfully makes a fraudulent statement on an insurance application faces disciplinary actions, includingsuspension,revocation, orcensureof their license, as well as potential fines or criminal penalties.Discriminationis not a disciplinary action; it refers to unfair treatment and is unrelated to fraud penalties.

Option A: Incorrect (is a penalty). Suspension of the license is a possible consequence.

Option B: Incorrect (is a penalty). Revocation of the license is a possible consequence.

Option C: Correct (is not a penalty). Discrimination is not a disciplinary action for fraud.

Option D: Incorrect (is a penalty). Censure is a formal reprimand and a possible consequence.

According to IRS guidelines (Publication 502), premiums paid by an individual for personally owneddisability income insurancearenot tax deductibleas medical expenses or otherwise, unlike certain health insurance premiums. However, benefits received from such policies are generally tax-free if the insured paid the premiums with after-tax dollars.

Option A: Correct. Premiums for personally owned disability insurance are not tax deductible.

Option B: Incorrect. Premiums are not deductible for disability income insurance.

Option C: Incorrect. There is no partial deduction for these premiums.

Option D: Incorrect. Tax deferral applies to certain investment products, not disability premiums.

Under Oklahoma’s Insurance Code (Title 36 O.S. § 309.2), the Oklahoma Insurance Commissioner is required to examine the financial condition ofdomestic insurersat least once every5 yearsto ensure solvency and compliance with state regulations. More frequent examinations may occur if issues arise, but 5 years is the minimum requirement.

Option A: Incorrect. 2 years is too frequent for the minimum requirement.

Option B: Incorrect. 4 years is not the specified interval.

Option C: Correct. Examinations are required at least every 5 years.

Option D: Incorrect. 6 years exceeds the required frequency.

Theguaranteed insurability riderallows the insured to purchase additional life insurance at specified dates or life events (e.g., marriage, childbirth) without proving insurability, ensuring coverage despite health changes. This is a standard rider in Oklahoma (Title 36 O.S. § 4001 et seq.).

Option A: Incorrect. Guaranteed renewability applies to policy renewals, not additional coverage.

Option B: Correct. The guaranteed insurability rider allows additional insurance without underwriting.

Option C: Incorrect. A cost of living rider adjusts benefits for inflation, not additional coverage.

Option D: Incorrect. A disability income rider provides income replacement, not additional insurance.

TheFair Credit Reporting Act (FCRA)(15 U.S.C. § 1681) defines aconsumer reportas information communicated by a consumer reporting agency that bears on a consumer’s creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living, used to determine eligibility for credit, insurance, or employment. This is relevant in insurance underwriting for consumer reports.

Option A: Incorrect. Information among related entities is not a consumer report.

Option B: Incorrect. Transaction reports between the consumer and the reporter are excluded from the FCRA definition.

Option C: Correct. A consumer report includes information on credit standing and personal characteristics from a reporting agency.

Option D: Incorrect. Credit card authorizations are not consumer reports under FCRA.

Anaccelerated death benefit (ADB)provision allows an insured to receive a portion of the life insurance death benefit before death under specific conditions, such as aterminal illness. Theterminal illness settlement benefitis a form of ADB, providing funds for medical or personal needs, as regulated in Oklahoma (Title 36 O.S. § 4051).

Option A: Incorrect. A home care benefit relates to long-term care, not ADB.

Option B: Incorrect. A nonforfeiture extended term benefit is a policy lapse option, not an ADB.

Option C: Correct. A terminal illness settlement benefit is a type of accelerated death benefit.

Option D: Incorrect. A cost of living benefit adjusts benefits for inflation, not an ADB.

An insurance agent, acting as afield underwriter, is responsible forcompleting applications accuratelyandcollecting initial premiums, ensuring the information provided is truthful and complete for the insurer’s underwriting process, as per Oklahoma’s regulations (Title 36 O.S. § 1435.2). Setting premiums, accepting/declining applications, and issuing policies are duties of the insurer’s underwriting department, not the agent.

Option A: Incorrect. Setting premiums is the insurer’s responsibility, not the agent’s.

Option B: Correct. Agents complete applications and collect initial premiums as part of field underwriting.

Option C: Incorrect. Declining or accepting applications is done by the insurer’s underwriters.

Option D: Incorrect. Issuing policies is the insurer’s role, not the agent’s.

Long-Term Care (LTC) insuranceis designed to cover services for individuals with chronic diseases or disabilities who need assistance with activities of daily living (ADLs) or have cognitive impairments. It often includes coverage for nursing home care, home-based care, assisted living, and respite care, as regulated in Oklahoma under Title 36 O.S. § 4426.1.

Option A: Incorrect. Medicare provides limited coverage for skilled nursing or home health care but not comprehensive LTC services.

Option B: Incorrect. Medicaid covers LTC for low-income individuals but is a government program, not a private insurance policy.

Option C: Correct. LTC insurance covers nursing home, home-based, and respite care for chronic conditions.

Option D: Incorrect. Group health insurance covers medical expenses but typically does not include LTC services.

This question falls under the Prometric content outline section on “Long-Term Care (LTC) Policies,” which covers LTC coverage and services.

A life insurance policyowner has several rights, including assigning or transferring the policy (e.g., through absolute or collateral assignment), borrowing against the cash value (in policies with cash value), and selecting or changing the beneficiary, as outlined in Oklahoma’s Insurance Code (Title 36 O.S. § 4001 et seq.). However, anabsolute assignmenttransfers all ownership rights to the assignee, and the original policyowner cannot unilaterally revoke it without the assignee’s consent, as it is a complete transfer of ownership.

Option A: Incorrect (is a right). The policyowner can assign or transfer the policy to another party.

Option B: Incorrect (is a right). The policyowner can borrow against the cash value in policies like whole life or universal life.

Option C: Incorrect (is a right). The policyowner can select and change the beneficiary unless restricted (e.g., irrevocable beneficiary).

Option D: Correct (is not a right). An absolute assignment cannot be revoked by the original policyowner without the assignee’s agreement.

This question aligns with the Prometric content outline under “Provisions, Options, Exclusions, Riders, Clauses, and Rights,” which covers policyowner rights and assignments.