Insurance Licensing OH-Life-Agent-Series-11-44 - OHIO Life Insurance Agent Series 11-44

When a life insurance policyholder takes a loan against the cash value of the policy, it accumulates interest. If the insured dies with the loan unpaid, the insurance company deducts both the principal and accrued interest from the death benefit before paying it to the beneficiary. This is standard practice in permanent life insurance policies.

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)."

Alife annuity certainensures that payments will continue for aspecified periodeven if the annuitant dies before that time. If the annuitant dies early, the payments go to a beneficiary for the remaining period.

"An annuity certain guarantees payment for a fixed period, regardless of whether the annuitant is alive for the entire period. If death occurs, payments continue to a named beneficiary."

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.

If no living beneficiary exists at the time of the insured’s death, thedeath benefit is payable to the insured’s estate. This may be subject to probate.

"In the absence of a living beneficiary, the policy proceeds are paid to the estate of the insured."

Insurance agents act as intermediaries between the insurer and the insured. One of their key responsibilities during the policy year is to assist policyholders in the claims process, ensuring that claims are filed correctly and followed up on promptly. This duty helps maintain trust and ensures that policyholders receive the benefits they are entitled to under their policies.

According to the Ohio Life Insurance Study Guide:

"Agents have a duty to assist policyholders in the claims process, including helping with the completion of claim forms and providing information on the status of claims."

An insurance agent's responsibilities in the underwriting process involve gathering necessary information for the insurer to assess risk. This includes completing applications accurately and collecting initial premiums. The final underwriting decisions, such as accepting or declining applications and setting premium amounts, are made by the insurance company's underwriters.

According to the Ohio Life Insurance Study Guide:

"The agent's role in underwriting includes completing the application, collecting initial premiums, and submitting the application to the insurer for approval."

Life insurance premiums are calculated based on mortality (the likelihood of death), interest (investment earnings), and expenses (operational costs). Morbidity, which relates to illness rates, is primarily used in health insurance, not life insurance.

Decreasing term insurance provides a death benefit that reduces over time, typically in line with the declining balance of a mortgage. This makes it a low-cost option for mortgage protection. Since the coverage decreases with the loan, the premium is generally lower than level term insurance.

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.