Insurance Licensing Ok-Life-Accident-and-Health-or-Sickness-Producer - Oklahoma Life, Accident, and Health or Sickness Producer Exam

Afraternal benefit society, as defined in Oklahoma’s Insurance Code (Title 36 O.S. § 2711), is an incorporated organization without capital stock, operating on a lodge system with a representative form of government, and providing insurance benefits solely for its members and their beneficiaries. Unlike commercial insurers, fraternal benefit societies arenot-for-profitentities, making “for profit” an incorrect characteristic.

Option A: Incorrect (is a characteristic). Fraternal benefit societies are incorporated entities.

Option B: Incorrect (is a characteristic). They operate without capital stock, distinguishing them from stock insurers.

Option C: Correct (is not a characteristic). Fraternal benefit societies are not-for-profit, not for-profit organizations.

Option D: Incorrect (is a characteristic). They exist solely for the benefit of their members.

This question aligns with the Prometric content outline under “State Insurance Statutes, Rules, and Regulations,” which covers types of insurers, including fraternal benefit societies.

In life insurance, aninsurable interestexists when the policyowner would suffer a financial loss or hardship from the insured’s death. Oklahoma law (Title 36 O.S. § 3604) requires insurable interest at the time the policy is purchased, typically based on a financial benefit from the insured’s continued life (e.g., spouse, business partner). Distant relationships or business ties alone are insufficient without financial dependency.

Option A: Correct. A financial benefit from the insured’s continued life establishes insurable interest.

Option B: Incorrect. A business relationship alone does not guarantee insurable interest without financial loss.

Option C: Incorrect. Distant family relationships may not qualify unless financial dependency exists.

Option D: Incorrect. Insurable interest must exist at policy purchase, not at the time of death.

This question falls under the Prometric content outline section on “Provisions, Options, Exclusions, Riders, Clauses, and Rights,” which covers insurable interest.

Anannuityis a financial product purchased from an insurer that provides a stream of income, typically for retirement, in exchange for a lump sum or periodic payments. The primary purpose is to guarantee income, often for the annuitant’s lifetime or a specified period, as outlined in Oklahoma’s regulations for life insurance products (Title 36 O.S. § 4002).

Option A: Correct. An annuity provides guaranteed income, either fixed or variable, based on the contract terms.

Option B: Incorrect. A whole life policy is a type of life insurance, not an annuity.

Option C: Incorrect. Disability insurance covers income loss due to disability, not guaranteed income.

Option D: Incorrect. A universal life policy is a flexible life insurance product, not an annuity.

This question falls under the Prometric content outline section on “Life Products,” which covers annuities and their features.

Theentire contract provision, as required by Oklahoma law (Title 36 O.S. § 4001 for life insurance, § 4405 for health), states that the insurance policy, along with any attached applications and endorsements, constitutes the entire contract between the insurer and policyowner. This ensures that no external documents can alter the agreement unless attached at issuance.

Option A: Incorrect. A certificate is issued to individuals under a group policy, not the entire contract.

Option B: Incorrect. A policy summary is a disclosure document, not part of the contract itself.

Option C: Correct. The entire contract provision includes the policy and attached application.

Option D: Incorrect. The application is part of the contract but not the provision itself.

This question aligns with the Prometric content outline under “Provisions, Options, Exclusions, Riders, Clauses, and Rights,” which covers mandatory policy provisions.

Long-Term Care (LTC) insurance policies cover services for individuals who need assistance with activities of daily living (ADLs) or have severe cognitive impairments. The three primary levels of care in LTC policies areskilled nursing care(intensive medical care by licensed professionals),intermediate care(less intensive medical care with some nursing support), andcustodial care(non-medical assistance with ADLs, such as bathing or dressing). These levels are standard in Oklahoma’s LTC regulations and align with federal guidelines.

Option A: Incorrect. Professional, social, and economic care are not standard LTC levels.

Option B: Incorrect. While home-based and assisted living are settings for LTC, they are not levels of care; medical care is too vague.

Option C: Incorrect. Functional and rehabilitational care are not standard LTC categories; medical care is not specific enough.

Option D: Correct. Skilled nursing, intermediate, and custodial care are the recognized levels of care in LTC policies.

This question falls under the Prometric content outline section on “Long-Term Care (LTC) Policies,” which includes knowledge of LTC services and coverage.

Backdatinga life insurance policy involves setting the policy’s effective date earlier than the current date, often to secure a lower premium based on the insured’s younger age at the earlier date. This requires the policyowner to pay premiums for the backdated period, as permitted under Oklahoma insurance practices (Title 36 O.S. § 4001 et seq.).

Option A: Incorrect. Reinstating a lapsed policy involves restoring coverage after a lapse, not changing the effective date.

Option B: Incorrect. Excluding preexisting conditions applies to health insurance, not backdating life insurance.

Option C: Incorrect. Accepting late premiums relates to the grace period, not backdating.

Option D: Correct. Backdating makes the policy effective on an earlier date.

Under the federalUniformed Services Employment and Reemployment Rights Act (USERRA)(38 U.S.C. § 4317) and Oklahoma’s insurance regulations (Title 36 O.S. § 4405), military members whose individual health insurance lapsed due to active duty and coverage under a government-sponsored plan (e.g., TRICARE) are entitled toreinstatementof their prior policy without re-underwriting or new pre-existing condition exclusions, provided they apply within a specified period (typically 120 days) after leaving service. Joe cannot be denied reinstatement due to his military service coverage.

Option A: Incorrect. Joe is not subject to re-underwriting for reinstatement post-military service.

Option B: Incorrect. Joe does not need to be free of pre-existing conditions for reinstatement.

Option C: Correct. Joe cannot be denied reinstatement of his lapsed policy due to government plan coverage.

Option D: Incorrect. Federal government denial is irrelevant; USERRA protects reinstatement rights.

In Oklahoma, an insurance producer license is required for activities defined astransacting insurance, which includes selling, soliciting, or negotiating insurance contracts (Title 36 O.S. § 1435.2).Providing referrals(e.g., passing along contact information without discussing insurance products) does not constitute transacting insurance and does not require a license, provided no compensation is tied to the sale.

Option A: Correct. Providing referrals does not require a license if it avoids solicitation or negotiation.

Option B: Incorrect. Selling insurance requires a producer license.

Option C: Incorrect. Negotiating insurance requires a producer license.

Option D: Incorrect. Soliciting insurance requires a producer license.

A rider is an amendment to an insurance policy that modifies its coverage. In the context of life insurance, thefamily rider(also known as a family term rider) provides term life insurance coverage for the insured’s spouse and children under the primary insured’s policy. This rider is commonly offered to extend protection to family members without requiring separate policies.

Option A: Incorrect. The payor benefit rider waives premiums if the policyowner (often a parent) becomes disabled or dies, typically used in juvenile policies. It does not provide coverage for family members.

Option B: Correct. The family rider adds term life coverage for the insured’s spouse and children, ensuring they are protected under the same policy.

Option C: Incorrect. The jumping juvenile rider increases the death benefit of a juvenile policy at a specified age (e.g., 21) without additional underwriting. It applies only to the child, not the spouse.

Option D: Incorrect. The guaranteed insurability rider allows the insured to purchase additional coverage at specified intervals without proving insurability, but it does not cover family members.

This question falls under the Prometric content outline section on “Provisions, Options, Exclusions, Riders, Clauses, and Rights,” which includes knowledge of life insurance riders.