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

Whole life insurance policies accumulate cash value over time, which the policyholder can borrow against. This cash value serves as the policy loan value, allowing the insured to take out loans using the policy as collateral. It's important to note that any outstanding loans and interest will be deducted from the death benefit if not repaid.

Adverse selection occurs when individuals with higher-than-average risk are more likely to seek or continue insurance coverage. In group life insurance, insurers use underwriting guidelines and participation requirements (e.g., minimum group size, employer-employee relationship) to avoid insuring groups that disproportionately consist of high-risk individuals. The goal is to ensure a balanced risk pool.

According to the Ohio Revised Code, misrepresentation involves making false or misleading statements about the terms, benefits, advantages, or conditions of an insurance policy. Specifically, Section 3901.21 of the Ohio Revised Code identifies such actions as unfair and deceptive practices in the business of insurance. This includes any misrepresentation or false or misleading statement concerning the terms, benefits, or advantages of any insurance policy

A Market Value Adjustment (MVA) is a feature found in some fixed annuities that affects the surrender value of the contract based on changes in interest rates. If the annuity is surrendered before the end of the guaranteed period, the MVA can either increase or decrease the surrender value, depending on whether interest rates have fallen or risen since the contract was issued. This adjustment aligns the annuity's value with current market conditions, protecting both the insurer and the annuity holder from interest rate fluctuations.

In a viatical settlement, a policyholder sells their life insurance policy to a third party for a lump sum that is less than the policy’s death benefit but more than its cash surrender value. The buyer then becomes the policy’s beneficiary and receives the full death benefit upon the insured’s death.

Ordinary life insurance, also known as whole life insurance, is a type of permanent life insurance that features level premiums and a guaranteed death benefit. Over time, the policy accumulates a cash value reserve through the payment of premiums and the crediting of interest. This reserve grows steadily and is designed to equal the face amount of the policy by the time the insured reaches the age of 100. This structure ensures that the policy remains in force for the insured's entire life, provided premiums are paid as scheduled.

Term life insurance provides coverage for a specific period and is generally more affordable than whole life insurance. It is suitable when maximum protection is needed at a lower cost, especially if the insured cannot afford the higher premiums associated with permanent insurance. Term policies do not accumulate cash value but offer substantial death benefits during the term.

Key person insurance is purchased by a business on the life of a key employee—someone whose knowledge, work, or overall contribution is essential to the business’s success. If the key employee dies or becomes disabled, the policy pays a benefit to the company to offset lost income, training of replacements, and potential business disruption.

In agroup annuity, the employer holds the master contract, and individual employees typically do not receive separate contracts. Instead, they receive certificates outlining their benefits under the group plan.

Therefore, the statement that "each employee signs and receives an individual contract" is incorrect.

Decreasing term insuranceis specifically designed for situations like mortgages. Thedeath benefit decreases over time, mirroring the decreasing balance of a mortgage. It is cost-effective and commonly used for mortgage protection.

"Decreasing term insurance provides a death benefit that decreases over time, typically used to cover a loan or mortgage, ensuring it is paid off if the insured dies before full repayment."