Free Insurance Licensing Ok-Life-Accident-and-Health-or-Sickness-Producer Practice Exam with Questions & Answers | Set: 5

Under Oklahoma’s Insurance Code (Title 36 O.S. § 1435.2),transacting insuranceincludes activities such as soliciting or selling insurance, engaging in preliminary negotiations for insurance contracts, and delivering insurance contracts or collecting premiums.Gathering prospective buyer information(e.g., lead generation) is not considered transacting insurance unless it involves direct solicitation or negotiation.

Option A: Incorrect (is transacting). Selling insurance is a core part of transacting insurance.

Option B: Incorrect (is transacting). Preliminary negotiations are included in transacting insurance.

Option C: Incorrect (is transacting). Delivering insurance contracts is part of transacting insurance.

Option D: Correct (is not transacting). Gathering prospective buyer information alone does not constitute transacting insurance.

This question falls under the Prometric content outline section on “State Insurance Statutes, Rules, and Regulations,” which covers the definition of transacting insurance.

Thecoordination of benefits (COB)provision, regulated in Oklahoma (O.A.C. 365:10-5-4), prevents overinsurance by establishing which group health plan isprimary(pays first) and which issecondary(pays remaining covered expenses) when an insured is covered by multiple plans. This ensures claims are paid efficiently without exceeding the total expense. While COB includes rules for dependent children (e.g., the “birthday rule”), its primary purpose is broader, covering all dual-coverage scenarios.

Option A: Incorrect. COB focuses on payment allocation, not ensuring treatment.

Option B: Correct. COB determines payment responsibilities between primary and secondary insurers.

Option C: Incorrect. Determining dependent coverage is a subset of COB, not its primary purpose.

Option D: Incorrect. COB does not protect secondary insurers from paying; it defines their payment role.

Life insurance underwriting assesses risk based on factors likeage(affects mortality risk),family history(indicates hereditary conditions), andtobacco use(increases health risks), as outlined in Oklahoma’s underwriting practices (Title 36 O.S. § 1204).Marital statusis not a key factor, as it has minimal impact on mortality risk, though it may be noted for beneficiary or financial planning purposes.

Option A: Incorrect. Age is a key underwriting factor.

Option B: Incorrect. Family history is a key underwriting factor.

Option C: Incorrect. Tobacco use is a key underwriting factor.

Option D: Correct. Marital status is not a key underwriting factor.

Long-Term Care (LTC) policies cover services for individuals who need assistance withActivities of Daily Living (ADLs), which are basic self-care tasks. Oklahoma regulations (O.A.C. 365:10-5-44) and federal standards define ADLs as including dressing, eating, toileting, bathing, transferring, and continence.Talkingis not considered an ADL, as it is not a fundamental self-care activity.

Option A: Incorrect. Dressing is an ADL.

Option B: Correct. Talking is not an ADL.

Option C: Incorrect. Eating is an ADL.

Option D: Incorrect. Toileting is an ADL.

AMedicare supplement policy(Medigap) is designed to cover out-of-pocket costs not paid by Original Medicare (Parts A and B), such as deductibles, coinsurance, and copayments. The primary reason for purchasing Medigap is tofill the gapsin Medicare coverage, as outlined in Oklahoma’s regulations (Title 36 O.S. § 6217) and federal guidelines (CMS, Medicare & You Handbook). Dental services, long-term care, and prescription drugs are not typically covered by Medigap; these require separate plans (e.g., Medicare Part D for drugs).

Option A: Incorrect. Dental services are not covered by Medigap; they require separate dental insurance.

Option B: Incorrect. Long-term care is not covered by Medigap; it requires LTC insurance.

Option C: Incorrect. Prescription drugs are covered by Medicare Part D, not Medigap.

Option D: Correct. Medigap fills gaps in Medicare Parts A and B coverage.

Arideris an endorsement or amendment to an insurance policy that modifies its clauses, provisions, or coverage. Riders can add, remove, or alter benefits, such as adding coverage for a specific condition or family members in life or health insurance policies. The term is standard in Oklahoma insurance law and practice.

Option A: Incorrect. An attachment is not a specific insurance term for policy modifications.

Option B: Incorrect. A supplement may refer to additional coverage but is not the standard term for policy endorsements.

Option C: Correct. A rider is an endorsement that modifies policy provisions.

Option D: Incorrect. “Add-on” is not a formal insurance term for policy modifications.

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