Pass the Insurance Licensing Life - Accident - and Health Ok-Life-Accident-and-Health-or-Sickness-Producer Questions and answers with CertsForce

Under Oklahoma insurance law and standard group life insurance provisions, a group life policy includes a mandatory grace period of 31 days for the payment of premiums (except the first premium, which must be paid to initiate coverage). During this grace period, the policy remains in force, and the full death benefit is payable if the insured dies, provided the premium is eventually paid or the policy has not lapsed.

Option A: Incorrect. Coverage is not discontinued during the grace period; it continues to protect the insured.

Option B: Incorrect. The death benefit is not reduced to 50% during the grace period; it remains at 100% of the policy’s face amount.

Option C: Correct. The death benefit coverage continues in force during the 31-day grace period, as mandated by Oklahoma law.

Option D: Incorrect. The death benefit is not reduced to 75%; it remains fully in effect.

This provision is outlined in Oklahoma statutes and aligns with the Prometric exam content outline under “Provisions, Options, Exclusions, Riders, Clauses, and Rights,” which includes knowledge of grace periods in group life policies.

Disability income insurance policies are designed to replace a portion of the insured’s income if they become disabled and unable to work. These policiesmost often pay benefits in the form of periodic income, typically monthly, to provide ongoing financial support during the disability period, as outlined in Oklahoma’s health insurance regulations (Title 36 O.S. § 4405). Lump sum payments or annuities are less common and usually associated with other types of coverage.

Option A: Incorrect. Annuities provide retirement income, not disability benefits.

Option B: Correct. Disability policies typically pay periodic (e.g., monthly) income.

Option C: Incorrect. Lump sum reimbursements are rare in disability policies; periodic payments are standard.

Option D: Incorrect. Lump sum payments based on projected income are not typical for disability insurance.

Aninducementin insurance involves offering something of value to persuade someone to purchase a policy, which is consideredrebatingand prohibited in Oklahoma unless allowed under specific exceptions (Title 36 O.S. § 1204). Oklahoma allows gifts valued at $100 or less as non-rebating promotional items, so a gift under $100 is not an inducement. Other actions, like promising employment, offering premium payment favors, or giving high-value merchandise, are considered inducements.

Option A: Incorrect (is an inducement). Promising employment to secure a policy sale is rebating.

Option B: Correct (is not an inducement). A gift valued less than $100 is permitted and not considered rebating.

Option C: Incorrect (is an inducement). Special favors in premium payments are rebating.

Option D: Incorrect (is an inducement). Giving merchandise worth $250 exceeds the $100 limit and is rebating.

Oklahoma insurance law requires licensed insurance producers to maintain records of insurance transactions for a minimum of5 years, as specified in Title 36 O.S. § 1435.13. This ensures compliance with regulatory oversight and allows for audits or investigations by the Oklahoma Insurance Department.

Option A: Incorrect. 3 years is insufficient per Oklahoma law.

Option B: Correct. Licensees must keep records for 5 years.

Option C: Incorrect. 7 years exceeds the requirement.

Option D: Incorrect. 10 years is not mandated by Oklahoma insurance regulations.

This question falls under the Prometric content outline section on “State Insurance Statutes, Rules, and Regulations,” which includes recordkeeping requirements.

Under Oklahoma law (Title 36 O.S. § 4107), individuals covered by a group life insurance policy have the right to designate a beneficiary and, upon termination of employment or group membership, the right toconvertthe group coverage to an individual life insurance policy without evidence of insurability, typically within 31 days. This conversion right ensures continued coverage.

Option A: Incorrect. Group life policies typically do not have cash surrender value for individual insureds.

Option B: Incorrect. Converting premiums to a different policy is not a standard right.

Option C: Incorrect. Remaining insured after termination requires COBRA (for health) or conversion, not automatic continuation.

Option D: Correct. The insured has the right to convert to an individual policy upon termination.

This question falls under the Prometric content outline section on “Provisions, Options, Exclusions, Riders, Clauses, and Rights,” which covers group life insurance rights.

TheHealth Insurance Portability and Accountability Act (HIPAA)includes provisions from the Newborns’ and Mothers’ Health Protection Act (NMHPA) of 1996, which mandates that group health plans cannot restrict hospital stays for childbirth to less than 48 hours for a vaginal delivery or 96 hours for a cesarean section. This federal law applies to group health insurance plans in Oklahoma and ensures minimum coverage for maternity care.

Option A: Incorrect. COBRA allows continuation of group health coverage after certain events but does not mandate maternity stay durations.

Option B: Incorrect. Medicaid is a state-federal program for low-income individuals, not a law mandating hospital stays for childbirth.

Option C: Correct. HIPAA, via the NMHPA, guarantees the 48-hour hospital stay for regular deliveries.

Option D: Incorrect. ERISA governs employee benefit plans but does not specifically address maternity hospital stays.

This question is part of the Prometric content outline under “State Insurance Statutes, Rules, and Regulations,” which covers federal and state laws affecting health insurance.

Most life insurance policies include asuicide clause, typically lasting 2 years in Oklahoma (Title 36 O.S. § 4004), which limits the insurer’s liability if the insured commits suicide within that period. If suicide occurs within the clause’s timeframe (e.g., 13 months), the insurer is generally not liable to pay the death benefit and instead refunds the premiums paid. However, the question emphasizes the policy’s expressed provision limiting liability, suggesting no payout beyond premiums, making “not liable to make any payouts” the most accurate choice. Insanity is not a standard exception unless specified.

Option A: Incorrect. While premium refunds are common, the question emphasizes no payouts, aligning with the provision’s limit.

Option B: Correct. The insurer is not liable to make any payouts due to the suicide clause.

Option C: Incorrect. The full value is not paid within the suicide clause period.

Option D: Incorrect. Insanity is not a standard exception in suicide clauses unless explicitly stated.

In Oklahoma, aninsurance produceris the term defined by law for an individual or entity licensed to sell, solicit, or negotiate insurance contracts. This is outlined in the Oklahoma Insurance Code, which requires producers to obtain a license to engage in these activities for life, accident, and health or sickness insurance.

Option A: Incorrect. An insurance adjuster investigates and settles claims, not negotiates the sale of insurance.

Option B: Correct. An insurance producer is the licensed individual who negotiates the sale of insurance, as defined by Oklahoma law.

Option C: Incorrect. An insurance appraiser evaluates property damage for claims, not related to selling insurance.

Option D: Incorrect. An insurance underwriter assesses risk and determines policy issuance, not sells insurance.

This question falls under the Prometric content outline section on “Licensing,” which includes knowledge of licensing requirements and definitions.

Term life insurance provides coverage for a specific period at a lower premium cost compared to permanent insurance, such as whole life. The primary advantage is its affordability, making it suitable for individuals needing significant coverage with lower initial costs. Unlike whole life, term life does not accumulate cash value, and premiums typically increase upon renewal as the insured ages.

Option A: Incorrect. Premiums for term life do not decrease as the insured ages; they increase at renewal due to higher risk.

Option B: Incorrect. While death benefits in level term policies remain constant during the term, this is not the primary advantage compared to lower costs.

Option C: Correct. Term life has lower initial costs, making it more affordable for the same coverage amount compared to permanent insurance.

Option D: Incorrect. Term life does not offer a cash value, a feature of permanent insurance.

This question aligns with the Prometric content outline under “Life Products,” which covers the characteristics and advantages of term life insurance.

In a life insurance policy, theprimary beneficiaryis the first in line to receive the death benefit. If the primary beneficiary predeceases the insured, the benefits are paid to thecontingent (or secondary) beneficiaries, as specified in the policy. If no contingent beneficiaries are named, the benefits typically go to the insured’s estate, but “contingent beneficiaries” is the correct choice here (Title 36 O.S. § 4001 et seq.).

Option A: Incorrect. Benefits are not paid to “no one”; they go to contingent beneficiaries or the estate.

Option B: Incorrect. “Tertiary beneficiaries” is not a standard term in life insurance.

Option C: Correct. Contingent beneficiaries receive benefits if the primary beneficiary dies.

Option D: Incorrect. “Sub-primary beneficiaries” is not a recognized term.