Free Practice Questions for Insurance Licensing Ok-Life-Accident-and-Health-or-Sickness-Producer Exam

For individuals aged 65 or older who are still working and covered by an employer’s group health plan, Medicare’s role depends on the employer’s size. For employers with fewer than 20 employees (as in this case with 18 employees), Medicare is typically theprimary payer, and the group health plan is secondary. However, if the individual is actively working and enrolled in the group plan, the group plan is primary, and Medicare acts as thesecondary payer, covering claims not fully paid by the group plan, as per Medicare Secondary Payer (MSP) rules.

Option A: Incorrect. The group health plan is primary for active employees, not Medicare.

Option B: Correct. Medicare acts as the secondary insurer, paying claims not fully covered by the group plan.

Option C: Incorrect. Medicare does cover claims as a secondary payer, not denying them to prevent overinsurance.

Option D: Incorrect. Medicare does not require cancellation of group insurance; individuals can maintain both.

This question aligns with the Prometric content outline under “Medicare,” which covers Medicare’s coordination with group health plans.

A collateral assignment is a provision in a life insurance policy that allows the policyowner to temporarily transfer certain ownership rights (e.g., the right to the death benefit or cash value) to a creditor as security for a loan. The assignee (creditor) has a claim to the policy proceeds up to the loan amount, but the policyowner retains other rights and regains full ownership once the loan is repaid.

Option A: Incorrect. Reinstatement allows a lapsed policy to be restored under certain conditions, not related to securing a loan.

Option B: Incorrect. The entire contract provision defines the policy and application as the complete agreement, not related to loans.

Option C: Correct. Collateral assignment temporarily assigns policy rights to secure a loan, as per standard life insurance provisions.

Option D: Incorrect. An automatic premium loan uses the policy’s cash value to pay overdue premiums, not to secure an external loan.

This question is part of the Prometric content outline under “Provisions, Options, Exclusions, Riders, Clauses, and Rights,” which covers ownership and assignment provisions.

Settlement options for life insurance or annuity policies determine how proceeds are paid to beneficiaries or annuitants. Common options includefixed period(payments over a set time),pure life income(payments for the annuitant’s lifetime), andlife income with period certain(payments for life with a guaranteed minimum period), as outlined in Oklahoma’s regulations (Title 36 O.S. § 4001 et seq.).Asset withdrawalis not a standard settlement option; it may refer to accessing funds but not a formal payout method.

Option A: Incorrect. Fixed period is a standard settlement option.

Option B: Incorrect. Pure life income is a standard settlement option.

Option C: Correct. Asset withdrawal is not a recognized settlement option.

Option D: Incorrect. Life income with period certain is a standard settlement option.

Thechange of beneficiary provisionallows the policyowner (often the insured) to change the beneficiary at any time unless the beneficiary is designated asirrevocable. An irrevocable beneficiary cannot be changed without their consent, as specified in Oklahoma’s life insurance regulations (Title 36 O.S. § 4001 et seq.).

Option A: Incorrect. Insurability of the beneficiary does not affect the right to change them.

Option B: Correct. An irrevocable beneficiary cannot be changed without their consent.

Option C: Incorrect. Power of attorney affects legal authority, not beneficiary changes.

Option D: Incorrect. A deceased beneficiary can be replaced without restriction.

TheConsolidated Omnibus Budget Reconciliation Act (COBRA), as regulated under federal law (29 U.S.C. § 1161 et seq.), requires employers with20 or more employeesto offer continuation of group health insurance coverage to employees and their dependents after certain qualifying events (e.g., termination of employment). This applies to private-sector employers and is enforced in Oklahoma.

Option A: Correct. COBRA applies to employers with 20 or more employees.

Option B: Incorrect. 30 employees is not the threshold.

Option C: Incorrect. 31 employees is not the specific requirement.

Option D: Incorrect. 50 employees is unrelated to COBRA’s threshold.

This question aligns with the Prometric content outline under “State Insurance Statutes, Rules, and Regulations,” which covers federal laws like COBRA.

Under Oklahoma’s statute of limitations for insurance contracts (Title 12 O.S. § 95), an insured has5 yearsto bring a lawsuit against an insurer for breach of contract, such as dissatisfaction with claim handling, unless the policy specifies a shorter period (minimum 1 year per Title 36 O.S. § 3617).

Option A: Incorrect. 1 year is the minimum allowed by policy terms, not the general statute.

Option B: Incorrect. 3 years applies to some torts, not insurance contracts.

Option C: Correct. The statute of limitations is 5 years for insurance contract disputes.

Option D: Incorrect. 7 years exceeds the standard limitation period.

Mortgage redemption or cancellation insuranceis a type ofdecreasing term life insurancedesigned to pay off a mortgage balance if the insured dies. The death benefit decreases over time, matching the declining mortgage balance, while premiums typically remain level, making it cost-effective for this purpose.

Option A: Incorrect. Increasing term insurance has a rising death benefit, unsuitable for mortgage protection.

Option B: Correct. Decreasing term insurance aligns with the declining mortgage balance.

Option C: Incorrect. Whole life provides permanent coverage with cash value, not specific to mortgage payoff.

Option D: Incorrect. Universal life is flexible permanent insurance, not typically used for mortgage redemption.

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

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.

Amodified whole life policyfeatures premiums that arelower than typical whole life premiums during the initial years(e.g., first 3–5 years) to make the policy more affordable early on, thenhigher thereafterto compensate for the initial discount while maintaining lifelong coverage. This is a variation of whole life insurance, as defined in Oklahoma’s regulations (Title 36 O.S. § 4002).

Option A: Incorrect. Premiums do not decrease in the last few years; they increase after the initial period.

Option B: Incorrect. Premiums are not higher in the last few years compared to typical whole life; they adjust after the initial period.

Option C: Correct. Premiums are lower initially and higher thereafter.

Option D: Incorrect. Premiums are not higher initially and lower later; the opposite is true.