OLAHI - Oklahoma Life Accident and Health Insurance Exam

Question 21: A consumer shopping for life insurance receives a document that explains the different kinds of life insurance policies in general terms and offers guidance on how to choose coverage that fits the buyer's needs. Which of the following documents is this general educational tool?

A policy summary

A buyer's guide

An outline of coverage

A conditional receipt

Question 22: Along with the general educational booklet, a life insurance applicant receives a second document that shows the specific premiums, cash values, dividends if any, and surrender values for the exact policy being proposed to that applicant. Which of the following documents provides these policy-specific figures?

The buyer's guide

The application

The Medical Information Bureau record

The policy summary

Question 23: An applicant applies for a life insurance policy but the insurer determines that the risk is far outside the limits it is willing to accept, so the insurer refuses to issue any coverage at all. Which of the following underwriting outcomes has occurred for this applicant?

The application was declined

The application was rated

The applicant was preferred

The policy was delivered

Question 24: A stranger with no family or business relationship to an insured takes out and pays for a life insurance policy on that insured's life, intending to profit from the death benefit. Which of the following principles does this arrangement violate, making it improper at the outset?

The incontestability clause

The grace period

The requirement of insurable interest

The free-look provision

Question 25: A producer submits a completed life insurance application, and the home office underwriter reviews the application, the Medical Information Bureau record, and any medical evidence, then classifies the risk and decides the premium. Which of the following best describes the underwriter's central task?

Paying policy claims

Setting the company's investment policy

Marketing policies to the public

Selecting and classifying risks

Question 26: An underwriter reviews a life insurance risk and considers the applicant's physical health, the hazards of the applicant's occupation, and dangerous hobbies such as skydiving when deciding how to classify the risk. Which of the following terms describes a factor like a dangerous occupation or hobby?

A moral hazard

A physical hazard

A morale hazard

A speculative risk

Question 27: An insurer accepts an applicant who presents a higher-than-average health risk but wants to keep the death benefit level and the premium standard, so instead of charging extra it reduces the amount of coverage the standard premium buys. Which of the following methods of handling a substandard risk is this?

Charging an extra flat premium

Rating up the premium

Reducing the benefit for the premium

Declining the applicant

Question 28: An applicant asks the producer to date a new life policy earlier than the actual application date so the premium reflects a younger age, a practice some states permit within a limited number of months. Which of the following terms describes dating a policy earlier to obtain a lower premium?

Backdating

Reinstatement

Rescission

Assignment

Question 29: A producer completes the application, submits it to the insurer, and later receives the issued policy to hand to the owner while collecting any premium still owed and answering the owner's questions about the coverage. Which of the following steps in the sales process is the producer performing at that final stage?

Field underwriting

Risk classification

Claims settlement

Policy delivery

Question 30: A life insurance application is submitted without the first premium, and the insurer issues the policy and mails it to the producer for delivery. In this situation, under the standard rule, when does the insured's coverage generally take effect?

On the application date

On the exam date

At delivery, when premium is paid

When the producer signs

Question 31: During underwriting, an insurer must balance selecting risks carefully against treating similar applicants consistently, so that people with the same expected risk are placed in the same class and charged the same rate. Which of the following principles requires this consistent treatment of like risks?

Fair and equitable classification

Adverse selection

The law of large numbers

Reinsurance

Question 32: Insurers must guard against the tendency of people who know they are in poor health or high-risk situations to seek insurance more eagerly than healthier people, which would distort the risk pool if left unchecked. Which of the following terms describes this tendency?

Coinsurance

Subrogation

Indemnity

Adverse selection

Question 33: A producer must accurately record an applicant's answers on the application because the completed application becomes part of the contract if the policy is issued and attached to it. Which of the following provisions makes the attached application part of the whole agreement?

The insuring clause

The entire contract provision

The free-look provision

The reinstatement provision

Question 34: An insurer relies on a large number of similar insureds so that its actual loss experience will closely match what it predicted when it set premiums, making its results more stable and predictable. Which of the following statistical principles supports this predictability?

Adverse selection

The principle of indemnity

The law of large numbers

Concealment

Question 35: An applicant made a false statement on an application, but the insurer, after the contestable period has fully passed with the insured alive, discovers the misstatement and wants to deny a later claim. Which of the following limits the insurer's ability to contest the policy at that point?

The incontestability clause

The consideration clause

The insuring clause

The free-look provision

Question 36: An applicant for a modest amount of life insurance is issued a policy based mainly on the answers to health questions on the application, without a paramedical or medical examination, using the insurer's simplified process for smaller face amounts. Which of the following describes this underwriting approach?

Guaranteed issue with no questions

Full medical underwriting

Group underwriting

Simplified issue based on health questions

Question 37: A producer must present a fair picture of a proposed policy and avoid exaggerating its benefits when discussing coverage with an applicant, so the applicant is not misled about what the policy will do. Which of the following practices would violate this duty of honest sales conduct?

Providing the required disclosure documents

Recording answers accurately

Misrepresenting the policy's benefits

Explaining the free-look period

Question 38: An insured buys a life insurance policy to protect a family member who depends on the insured's income, and the amount of coverage is set by estimating the income and expenses the family would lose if the insured died. Which of the following describes this approach to setting the coverage amount?

The needs approach

The indemnity approach

The reinsurance approach

The coinsurance approach

Question 39: When an insurer reviews an application and finds the information incomplete, it may send the producer a request for the missing details before it can finish evaluating the risk. Which of the following best describes information an insurer requests to complete its evaluation of a pending application?

A claim reserve

A requirement

A dividend

A nonforfeiture value

Question 40: A producer completing an application should ask every question and record complete answers, because if the insurer later learns the producer knew of a condition that was left off the application, disputes can arise over what the insurer was told. Which of the following best describes the producer's duty here?

To omit unfavorable facts

To guarantee the policy is issued

To set the applicant's premium

To record complete and accurate information

OLAHI Oklahoma Life Accident and Health Insurance Exam - Set 4 - Part 2

Question 21: A consumer shopping for life insurance receives a document that explains the different kinds of life insurance policies in general terms and offers guidance on how to choose coverage that fits the buyer's needs. Which of the following documents is this general educational tool?

Question 23: An applicant applies for a life insurance policy but the insurer determines that the risk is far outside the limits it is willing to accept, so the insurer refuses to issue any coverage at all. Which of the following underwriting outcomes has occurred for this applicant?

Question 24: A stranger with no family or business relationship to an insured takes out and pays for a life insurance policy on that insured's life, intending to profit from the death benefit. Which of the following principles does this arrangement violate, making it improper at the outset?

Question 30: A life insurance application is submitted without the first premium, and the insurer issues the policy and mails it to the producer for delivery. In this situation, under the standard rule, when does the insured's coverage generally take effect?

Question 32: Insurers must guard against the tendency of people who know they are in poor health or high-risk situations to seek insurance more eagerly than healthier people, which would distort the risk pool if left unchecked. Which of the following terms describes this tendency?

Question 33: A producer must accurately record an applicant's answers on the application because the completed application becomes part of the contract if the policy is issued and attached to it. Which of the following provisions makes the attached application part of the whole agreement?

Question 34: An insurer relies on a large number of similar insureds so that its actual loss experience will closely match what it predicted when it set premiums, making its results more stable and predictable. Which of the following statistical principles supports this predictability?

Question 37: A producer must present a fair picture of a proposed policy and avoid exaggerating its benefits when discussing coverage with an applicant, so the applicant is not misled about what the policy will do. Which of the following practices would violate this duty of honest sales conduct?

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