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

Theautomatic premium loan (APL)provision in a life insurance policy with cash value allows the insurer to automatically borrow from the policy’s cash value to pay overdue premiums if the policyowner fails to pay by the end of the grace period (typically 31 days, per Title 36 O.S. § 4005). This prevents the policy from lapsing, provided sufficient cash value is available.

Option A: Incorrect. The APL provision does not cover loans from other policies.

Option B: Correct. The APL provision authorizes withdrawal to pay premiums due at the end of the grace period.

Option C: Incorrect. The APL provision prevents termination, not facilitates it.

Option D: Incorrect. Interest on policy loans is separate and not covered by the APL provision.

This question falls under the Prometric content outline section on “Provisions, Options, Exclusions, Riders, Clauses, and Rights,” which covers automatic premium loans.

In group medical insurance, themaster policyis the single contract issued to the employer or group sponsor (e.g., a trust or association) that outlines the terms, conditions, and coverage for the entire group. Individual employees receivecertificates of insurance, which summarize their coverage under the master policy but are not the contract itself.

Option A: Correct. The master policy is the contract issued to the employer for group medical insurance.

Option B: Incorrect. “Employer policy” is not a standard insurance term.

Option C: Incorrect. A certificate policy refers to the document given to individuals, not the group contract.

Option D: Incorrect. “Conglomerate policy” is not a recognized term in insurance.

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

Thegrace periodin life and health insurance policies, as mandated by Oklahoma law (Title 36 O.S. § 4005 for life, § 4405 for health), is a period (typically 31 days) after a premium due date during which the policy remains in force, protecting the policyowner from an unintentional lapse. If the insured dies during the grace period, the death benefit is payable, minus any overdue premiums.

Option A: Incorrect. The period after premium payment but before policy issuance is the underwriting or application phase, not the grace period.

Option B: Incorrect. This is similar to Option A and does not describe the grace period.

Option C: Incorrect. The time between death and benefit payment is the claim processing period, not the grace period.

Option D: Correct. The grace period protects against unintentional policy lapse due to late premium payment.

This question falls under the Prometric content outline section on “Provisions, Options, Exclusions, Riders, Clauses, and Rights,” which covers grace period provisions.

A deliberate lie by an insured to obtain a lower premium constitutesfraud, defined in Oklahoma’s Insurance Code (Title 36 O.S. § 1204) as an intentional misrepresentation of material facts to deceive the insurer. Fraud can lead to policy rescission or legal penalties.

Option A: Incorrect. Omission is failing to disclose information, not actively lying.

Option B: Correct. A deliberate lie to lower premiums is fraud.

Option C: Incorrect. Concealment is withholding material information, not providing false information.

Option D: Incorrect. Aleatory refers to the uncertain nature of insurance contracts, not misrepresentation.

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.

Awhole life insurance policyprovidespermanent coveragefor the insured’s entire life, as long as premiums are paid, along with a guaranteed death benefit and cash value accumulation. This is a key advantage over term life, which is temporary. Whole life premiums are typically higher than term life, and underwriting guidelines or premium flexibility depend on the insurer, not the product itself.

Option A: Incorrect. Underwriting guidelines vary by insurer, not by policy type.

Option B: Incorrect. Whole life has higher initial premiums compared to term life.

Option C: Incorrect. Whole life typically has fixed premiums, unlike universal life, which offers variable premiums.

Option D: Correct. Permanent coverage is a primary advantage of whole life insurance.

This question falls under the Prometric content outline section on “Life Products,” which covers the benefits of whole life insurance.