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

Insurable interest is a fundamental principle in life insurance, requiring that the policyholder has a financial or emotional interest in the continued life of the insured. This principle prevents individuals from taking out policies on strangers for speculative purposes. According to Ohio Revised Code Section 3911.09, a person may procure life insurance on their own life or on the life of another person in whom they have an insurable interest, such as a spouse, child, or business partner. This ensures that the policyholder would suffer a genuine loss upon the death of the insured.

Surplus lines insurance provides coverage for unique or high-risk situations that standard (admitted) insurers are unwilling to insure. These policies are offered by non-admitted insurers through licensed surplus lines brokers.

Anannuity contractis specifically designed to accumulate funds and then pay astream of incomeduring retirement. This income can be for a set period or for the life of the annuitant.

"Annuities are financial products that provide a guaranteed income stream, often used for retirement planning. They accumulate funds and then pay out over time, usually starting at retirement."

Whole life insuranceprovides adeath benefit that is generally income tax-freeto the beneficiary under current tax laws, making it a popular estate planning tool.

"Proceeds from a life insurance policy paid to a named beneficiary are usually income tax-free under IRC Section 101(a)."

The Human Life Value approach estimates the amount of life insurance a person needs by calculating the present value of their future earnings. It considers salary, inflation, years of employment remaining, and other economic factors. This method quantifies the financial loss a family would suffer if the income earner died prematurely.

According to Ohio Revised Code Section 5815.33, if an individual designates their spouse as the beneficiary of a life insurance policy and subsequently divorces, the designation of the former spouse as beneficiary is automatically revoked, unless the policy or divorce decree explicitly states otherwise. This means that, post-divorce, the former spouse is treated as if they predeceased the policyholder, and the policy's proceeds will be distributed to the contingent beneficiary or the policyholder's estate if no other beneficiary is named.

Thenonforfeiture valueof an annuity prior to annuitization is the amount available to the policyholder if the contract is surrendered. It includes all premiums paid, accumulated interest, minus any withdrawals and applicable surrender charges. This ensures that the policyholder retains some value from the contract, even if they choose to terminate it before receiving annuity payments.

According to Ohio Revised Code Section 5815.33(B)(1), unless the designation of beneficiary or the judgment or decree granting the divorce, dissolution of marriage, or annulment specifically provides otherwise, the designation of the former spouse as a beneficiary is revoked upon divorce. The law treats the former spouse as having predeceased the policyholder, effectively removing them as a beneficiary. This automatic revocation applies to life insurance policies and other contractual beneficiary designations.

Immediate annuities are designed to start income payments shortly after a lump sum is paid and typically do not have a surrender option once the income phase has begun. In contrast, deferred annuities allow for surrender during the accumulation phase, often subject to surrender charges that decrease over time.

According to the Ohio Life Insurance Study Guide:

"Deferred annuities can be surrendered during the accumulation period, often with surrender charges that decrease over time. Immediate annuities, once annuitized, generally do not allow for surrender."

For a risk to be insurable, it must involve uncertainty. Expected or certain losses do not meet the criteria for insurability because insurance is designed to protect against unforeseen events. Insurers require that the loss be accidental and not inevitable.

According to the Ohio Life Insurance Study Guide:

"Insurable risks must involve the possibility of loss, not certainty. Expected losses are not insurable because they do not meet the criteria of uncertainty and randomness."