Free Ohio Department of Insurance OH-Life-Agent-Series-11-44 Practice Exam with Questions & Answers | Set: 5

Akey disadvantage of fixed annuitiesis that while they offer guaranteed payments, thefixed payment amount may not keep up with inflation, reducing purchasing power over time. This is a common concern for retirees relying on steady income.

"A disadvantage of fixed annuities is that they do not offer protection against inflation, meaning the real value of payments can diminish over time."

A Variable Universal Life (VUL) policy is a type of permanent life insurance that combines the flexible premium and adjustable death benefit features of universal life insurance with the investment options of variable life insurance. Policyholders can allocate a portion of their premium payments to a variety of investment options, such as stocks and bonds, allowing for potential growth of the policy's cash value. However, this also introduces investment risk, as the cash value and death benefit can fluctuate based on market performance.

According to the Ohio Life Insurance Study Guide:

"Variable universal life insurance combines the features of universal life insurance with investment options, allowing policyholders to invest the cash value in various separate accounts."

AClass designationis used when a group of individuals is identified as beneficiaries without naming each one individually, such as “all of my children.” This allows for inclusion of future children or changes in family composition.

"A class designation identifies a group of individuals as beneficiaries, like 'all of my children,' instead of naming each person individually. It ensures that any future members of the class are included."

The premium mode refers to the frequency with which premium payments are made on an insurance policy. Common premium modes include annual, semi-annual, quarterly, and monthly payments. While the mode affects the payment schedule, it does not change the total annual premium amount; however, insurers may apply additional charges for more frequent payment modes due to increased administrative costs.

According to Ohio Revised Code Section 5815.33(B)(1), unless the designation of beneficiary or the judgment or decree granting the divorce, dissolution of marriage, or annulment specifically provides otherwise, the designation of the former spouse as a beneficiary is revoked upon divorce. The law treats the former spouse as having predeceased the policyholder, effectively removing them as a beneficiary. This automatic revocation applies to life insurance policies and other contractual beneficiary designations.

AFamily Term Insurance Riderextends coverage to the insured's family members, including the spouse and children, under a single policy. If the spouse covered under this rider passes away during the term, the policy pays a death benefit. This rider is an economical way to provide life insurance protection to family members without purchasing separate policies.

Only anofficer of the insurance companyis legally authorized tomake changesto a life insurance policy. Agents do not have the authority to alter contract terms.

"Only an officer of the insurance company has the authority to modify a policy’s provisions. Changes made by agents are not valid unless authorized in writing by the insurer."

In the context of insurance applications, representations are statements made by the applicant regarding their personal information, including health history, family health history, occupation, and hobbies. These statements are considered to be true to the best of the applicant's knowledge and belief. Representations are not warranties but are used by the insurer to assess the risk associated with insuring the applicant. Misrepresentations can lead to the voiding of the policy if they are found to be material to the risk and were made with intent to deceive.

Under Ohio regulations governing viatical settlements, insurers are required to respond to a verification of coverage request within 30 calendar days. This ensures timely processing and supports consumer protection during transactions involving the sale of life insurance policies.

Standard premium payment frequencies accepted by life insurance companies typically include monthly, quarterly, semi-annually, and annually. Bi-weekly premium payments are not commonly offered due to administrative complexities and are generally not an available option for policyowners.