OH-Life-Agent-Series-11-44 Exam Dumps - Insurance Licensing OHIO Life Insurance Questions and Answers

Paid-up additions (PUAs) are a dividend option in whole life insurance policies that allow policyholders to use dividends to purchase additional amounts of paid-up life insurance. These additions increase both the policy's cash value and death benefit. Each paid-up addition is a miniature whole life policy that requires no further premiums and participates in future dividends. This compounding effect can significantly enhance the policy's value over time. Therefore, the correct answer is C.

The accumulation phase is the period in an annuity contract during which the annuitant makes payments or contributions to the annuity. During this phase, the funds accumulate on a tax-deferred basis, meaning that taxes on earnings are deferred until distributions begin. This phase continues until the annuitant decides to begin receiving payments, at which point the annuity enters the payout or distribution phase

When underwriting a group life insurance plan, insurers assess the average age of the group members to determine the overall risk and appropriate premium rates. The average age influences the mortality risk profile of the group, which is a critical factor in the insurer's decision-making process.

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.

If an annuitant dies during the accumulation period of a deferred annuity, the accumulated cash value is typically paid to the designated beneficiary. The death benefit is usually the greater of the accumulated value or the guaranteed minimum, depending on the terms of the annuity contract. This ensures that the funds contributed to the annuity are not lost and provide financial support to the beneficiary.

When an annuitant dies before the annuity's payout phase begins, the accumulated interest within the annuity is subject to income tax for the beneficiary. The beneficiary receives the premiums paid into the annuity tax-free, but any earnings or interest accrued are taxable as ordinary income. This taxation applies regardless of the beneficiary's relationship to the annuitant.

An irrevocable beneficiary has a vested interest in the life insurance policy. This means that the policyowner cannot change the beneficiary designation, take loans, or surrender the policy without the written consent of the irrevocable beneficiary. This designation provides strong protection for the beneficiary’s interest.

Awaiver of premium riderallows the insured to stop paying premiums if they become totally disabled,without changing any other termsof the policy. Coverage and cash value growth continue as if premiums were paid.

"The waiver of premium rider relieves the insured of premium payments during total disability. The policy remains in force, and all values continue to accumulate as if the premiums were being paid."

A "Life Annuity with Period Certain" guarantees income payments for the lifetime of the annuitant, with a minimum payment period specified (the "period certain"). If the annuitant dies before the end of this period, the remaining payments are made to a designated beneficiary for the rest of the period.

In this scenario, the annuity is set to pay income to the spouse for 20 years. If the spouse dies before the 20-year period concludes, the remaining payments continue to the children for the rest of the term. This structure aligns with the definition of a Life Annuity with a 20-Year Period Certain.

According to the Ohio Life Insurance Study Guide:

"A life annuity with period certain provides income for the life of the annuitant, but guarantees payments for a specified period. If the annuitant dies before the end of the period, payments continue to a beneficiary for the remainder of the period."

A payor benefit rider is typically added to juvenile life policies and waives premium payments if the person responsible for paying the premiums (usually a parent or guardian) becomes totally disabled or dies before the child reaches a specified age. This ensures that the child’s coverage remains in force even if the premium payer is unable to continue payments.