Ok-Life-Accident-and-Health-or-Sickness-Producer Oklahoma Life, Accident, and Health or Sickness Producer Exam Questions and Answers

According to IRS guidelines (Publication 525), disability benefits from a group policy paid for by the employer are consideredtaxable incometo the employee because the premiums were not included in the employee’s taxable income. If the employee paid the premiums with after-tax dollars, the benefits would be tax-free.

Option A: Incorrect. Benefits are taxable if the employer paid the premiums.

Option B: Incorrect. Disability benefits are not deductible from gross income.

Option C: Correct. The benefits are taxable income.

Option D: Incorrect. Benefits are subject to income tax, not just Social Security or FUTA taxes.

In group medical insurance, themaster policyis the single contract issued to the employer or group sponsor (e.g., a trust or association) that outlines the terms, conditions, and coverage for the entire group. Individual employees receivecertificates of insurance, which summarize their coverage under the master policy but are not the contract itself.

Option A: Correct. The master policy is the contract issued to the employer for group medical insurance.

Option B: Incorrect. “Employer policy” is not a standard insurance term.

Option C: Incorrect. A certificate policy refers to the document given to individuals, not the group contract.

Option D: Incorrect. “Conglomerate policy” is not a recognized term in insurance.

This question falls under the Prometric content outline section on “Health Providers and Products,” which covers group health insurance structures.

Ascheduled dental policyprovides coverage based on a predetermined schedule of benefits, which lists specific maximum dollar amounts payable for each dental procedure (e.g., $100 for a filling, $500 for a crown). This contrasts with comprehensive dental plans that may pay a percentage of expenses or cover all costs after a deductible.

Option A: Incorrect. Scheduled dental policies do not pay all expenses after a deductible; they limit payments to scheduled amounts.

Option B: Incorrect. Paying a percentage of expenses is typical of comprehensive dental plans, not scheduled policies.

Option C: Correct. Benefits are limited to a specific maximum dollar amount per procedure, as defined in the schedule.

Option D: Incorrect. Benefits are not paid as a lump sum directly to the insured; they are paid per procedure up to the scheduled limit.

This question aligns with the Prometric content outline under “Health Providers and Products,” which covers dental insurance structures.

Afalse financial statementin the context of insurance refers to a misrepresentation of an insurer’s financial condition, such as falsely claiming insolvency or bankruptcy, which is prohibited under Oklahoma’s Unfair Trade Practices Act (Title 36 O.S. § 1204). This can mislead consumers and harm the insurer’s reputation. Option B directly involves a false claim about an insurer’s financial status.

Option A: Incorrect. An untrue advertisement about another producer is defamation or misrepresentation, not a financial statement.

Option B: Correct. Posting false information about an insurer’s bankruptcy is a false financial statement, violating Oklahoma law.

Option C: Incorrect. Flyers about a criminal past are defamatory but not related to financial statements.

Option D: Incorrect. Hateful postcards are unprofessional but do not constitute a false financial statement.

This question is part of the Prometric content outline under “State Insurance Statutes, Rules, and Regulations,” which covers unfair trade practices.

Life insurance underwriting assesses risk based on factors likeage(affects mortality risk),family history(indicates hereditary conditions), andtobacco use(increases health risks), as outlined in Oklahoma’s underwriting practices (Title 36 O.S. § 1204).Marital statusis not a key factor, as it has minimal impact on mortality risk, though it may be noted for beneficiary or financial planning purposes.

Option A: Incorrect. Age is a key underwriting factor.

Option B: Incorrect. Family history is a key underwriting factor.

Option C: Incorrect. Tobacco use is a key underwriting factor.

Option D: Correct. Marital status is not a key underwriting factor.

Twistingis the unethical practice of using misrepresentation or incomplete information to persuade an insured to terminate an existing policy and purchase a new one, often to the insured’s detriment. It is prohibited under Oklahoma’s Unfair Trade Practices Act (Title 36 O.S. § 1204). This differs fromchurning(replacing policies for commission without benefit to the insured) orrebating(offering inducements to purchase).

Option A: Correct. Twisting involves misrepresentation to induce policy replacement.

Option B: Incorrect. Subrogation is the insurer’s right to recover payments from a third party.

Option C: Incorrect. Rebating is offering a portion of the premium or other inducements to purchase insurance.

Option D: Incorrect. Churning involves excessive policy replacements for commissions, not necessarily misrepresentation.

This question is part of the Prometric content outline under “State Insurance Statutes, Rules, and Regulations,” which covers unfair trade practices.

Theownership provisionin a life insurance policy specifies that the policyowner (who may or may not be the insured) holds all rights and privileges during the insured’s lifetime, including changing beneficiaries, borrowing against cash value, or surrendering the policy. This is standard in Oklahoma’s Insurance Code (Title 36 O.S. § 4001 et seq.). Beneficiaries have no rights until the insured’s death, and the insured’s family has no automatic rights unless designated as owners.

Option A: Incorrect. The insured has no ownership rights unless they are also the policyowner.

Option B: Correct. The policyowner holds all rights and privileges.

Option C: Incorrect. The insured’s family has no inherent rights unless they are the policyowner.

Option D: Incorrect. Beneficiaries have rights only after the insured’s death.

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.

Health Maintenance Organizations (HMOs) focus on preventive and essential medical care within a network.Adult routine eye examinationsare often excluded from HMO coverage, as they are considered non-essential or covered under separate vision plans. Other services like emergency care, physical exams, and surgeries are typically covered, as per Oklahoma’s managed care regulations (Title 36 O.S. § 652 et seq.).

Option A: Incorrect. Out-of-area emergency services are generally covered by HMOs.

Option B: Correct. Adult routine eye examinations are often excluded or require separate coverage.

Option C: Incorrect. Physical examinations are typically covered as preventive care.

Option D: Incorrect. In-patient surgeries are covered as essential medical services.

Oklahoma insurance regulations mandate that health insurance policies providing child immunization coverage must not impose certain restrictions that could limit access to these benefits. Specifically, the Oklahoma Insurance Code, Title 36 O.S. § 6060.3, states that "benefits for immunizations required under child immunization coverage shall not be subject to prior authorization requirements." This ensures that children can receive necessary immunizations without delays caused by insurer approval processes.

The Oklahoma Life, Accident, and Health or Sickness Producer Study Guide further clarifies, "Child immunization benefits must be provided without prior authorization to promote timely access to preventive care. However, benefits may still follow a recommended immunization schedule or be subject to other policy terms like deductibles, unless otherwise specified." Options A, B, and D are not explicitly prohibited under the law, making option C the correct answer.

Precertification(or preauthorization) is a process where the insurer reviews and approves certain medical treatments or procedures before they are provided, ensuring they are medically necessary and covered.Concurrent reviewoccurs during the treatment, monitoring ongoing care (e.g., hospital stays) to ensure continued necessity. The primary difference is timing: precertification happens before treatment, while concurrent review happens during treatment.

Option A: Incorrect. Both precertification and concurrent review are cost containment measures, so this is not unique to precertification.

Option B: Incorrect. Both processes involve review by the insurance company.

Option C: Incorrect. Neither typically requires patient consent beyond agreeing to the policy terms.

Option D: Correct. Precertification occurs before treatment, distinguishing it from concurrent review.

This question aligns with the Prometric content outline under “Provisions, Options, Exclusions, Riders, Clauses, and Rights,” which covers health insurance utilization management.

A deliberate lie by an insured to obtain a lower premium constitutesfraud, defined in Oklahoma’s Insurance Code (Title 36 O.S. § 1204) as an intentional misrepresentation of material facts to deceive the insurer. Fraud can lead to policy rescission or legal penalties.

Option A: Incorrect. Omission is failing to disclose information, not actively lying.

Option B: Correct. A deliberate lie to lower premiums is fraud.

Option C: Incorrect. Concealment is withholding material information, not providing false information.

Option D: Incorrect. Aleatory refers to the uncertain nature of insurance contracts, not misrepresentation.

Permanent life insurance (e.g., whole life, universal life) and term life insurance differ fundamentally in their structure and benefits. Permanent life insurance provides coverage for the insured’s entire life (as long as premiums are paid) and often includes a savings component that accumulates cash value. Term life insurance provides coverage for a specific period (e.g., 10, 20, or 30 years) and does not build cash value.

Option A: Incorrect. Term life insurance can cover the insured for various periods (e.g., 5, 10, 20 years), not strictly 1 year, depending on the policy term selected.

Option B: Incorrect. Term life is generally more economical for short-term needs due to lower premiums, but over a long life span, permanent life may be more cost-effective due to its lifelong coverage and cash value growth.

Option C: Correct. Permanent life insurance may develop cash value, which can be borrowed against or withdrawn, while term life does not have this feature.

Option D: Incorrect. Permanent life insurance does not automatically provide coverage for 5 years without premium payments. Policies may lapse without payment unless nonforfeiture options (e.g., extended term or reduced paid-up insurance) are exercised.

This question aligns with the Prometric content outline under “Life Products,” which covers the characteristics of term and permanent life insurance.

Theentire contract provision, mandated in Oklahoma for life and health insurance (Title 36 O.S. § 4001 for life, § 4405 for health), specifies that theentire contractconsists of the policy, any attached endorsements or riders, and a copy of theapplicationif endorsed upon or attached to the policy at issuance. This ensures no external documents can alter the agreement unless included. Clauses and provisions are part of the policy itself, while credit reports are used in underwriting but not part of the contract.

Option A: Incorrect. Clauses are components of the policy, not a separate item added to the entire contract.

Option B: Incorrect. Credit reports are underwriting tools, not part of the contract.

Option C: Incorrect. Provisions are part of the policy, not a distinct addition.

Option D: Correct. The application, when attached, is part of the entire contract.

A10-year level term life insurance policyhas a fixed premium and a fixed face amount (death benefit) for the entire 10-year term. The premium and death benefit remain constant, and there is no cash value or dividend accumulation, as term life is not a participating policy.

Option A: Incorrect. Conversion to whole life is an optional rider, not automatic at the end of the term.

Option B: Incorrect. In a level term policy, the premium does not increase during the term; it remains constant.

Option C: Incorrect. Term life policies do not pay dividends or accumulate cash value, so the face amount does not increase.

Option D: Correct. Both the premium and the $100,000 face amount remain constant for the 10-year term.

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

To become a resident insurance producer or adjuster in Oklahoma, as outlined in Title 36 O.S. § 1435.7 and § 1435.8, an applicant must: be at least 18 years old, be of good personal and business reputation (demonstrating trustworthiness and competency), successfully pass the required licensing examination, and be a resident of Oklahoma or intend to become one. However, there is no specific requirement to have lived in Oklahoma for 6 months or more prior to applying; residency is established by maintaining a principal place of residence or business in the state at the time of application.

Option A: Correct (not a requirement). Living in Oklahoma for 6 months or more is not explicitly required; residency status is sufficient.

Option B: Incorrect (is a requirement). Passing the licensing exam is mandatory.

Option C: Incorrect (is a requirement). Applicants must be at least 18 years old.

Option D: Incorrect (is a requirement). Good personal and business reputation is required.

Ajoint life policy(first-to-die) covers both spouses under a single contract and pays the death benefit upon thefirst spouse’s death, as defined in Oklahoma’s life insurance regulations (Title 36 O.S. § 4002). This is often used for financial protection needs like mortgages.

Option A: Incorrect. “Dual capacity” is not a standard life insurance term.

Option B: Incorrect. Family term covers dependents but is not specific to first-to-die spousal coverage.

Option C: Incorrect. Whole life is a permanent policy type, not inherently joint.

Option D: Correct. A joint life policy pays on the first spouse’s death.

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.

Under Oklahoma insurance law and standard group life insurance provisions, a group life policy includes a mandatory grace period of 31 days for the payment of premiums (except the first premium, which must be paid to initiate coverage). During this grace period, the policy remains in force, and the full death benefit is payable if the insured dies, provided the premium is eventually paid or the policy has not lapsed.

Option A: Incorrect. Coverage is not discontinued during the grace period; it continues to protect the insured.

Option B: Incorrect. The death benefit is not reduced to 50% during the grace period; it remains at 100% of the policy’s face amount.

Option C: Correct. The death benefit coverage continues in force during the 31-day grace period, as mandated by Oklahoma law.

Option D: Incorrect. The death benefit is not reduced to 75%; it remains fully in effect.

This provision is outlined in Oklahoma statutes and aligns with the Prometric exam content outline under “Provisions, Options, Exclusions, Riders, Clauses, and Rights,” which includes knowledge of grace periods in group life policies.

Under Oklahoma’s Insurance Code (Title 36 O.S. § 1435.13), a producer who knowingly and willfully makes a fraudulent statement on an insurance application faces disciplinary actions, includingsuspension,revocation, orcensureof their license, as well as potential fines or criminal penalties.Discriminationis not a disciplinary action; it refers to unfair treatment and is unrelated to fraud penalties.

Option A: Incorrect (is a penalty). Suspension of the license is a possible consequence.

Option B: Incorrect (is a penalty). Revocation of the license is a possible consequence.

Option C: Correct (is not a penalty). Discrimination is not a disciplinary action for fraud.

Option D: Incorrect (is a penalty). Censure is a formal reprimand and a possible consequence.

Theinterest onlysettlement option allows life insurance proceeds to remain with the insurer, with theearnings(interest) paid to the beneficiary periodically (e.g., monthly). The principal remains intact until another settlement option is chosen or the proceeds are withdrawn, as outlined in Oklahoma’s life insurance regulations (Title 36 O.S. § 4001 et seq.).

Option A: Correct. The interest only option pays earnings to the beneficiary while retaining the proceeds.

Option B: Incorrect. Lump sum pays the entire proceeds at once.

Option C: Incorrect. Fixed period pays principal and interest over a set time.

Option D: Incorrect. Fixed amount pays a set amount until proceeds are exhausted.

A life insurance policyowner has several rights, including assigning or transferring the policy (e.g., through absolute or collateral assignment), borrowing against the cash value (in policies with cash value), and selecting or changing the beneficiary, as outlined in Oklahoma’s Insurance Code (Title 36 O.S. § 4001 et seq.). However, anabsolute assignmenttransfers all ownership rights to the assignee, and the original policyowner cannot unilaterally revoke it without the assignee’s consent, as it is a complete transfer of ownership.

Option A: Incorrect (is a right). The policyowner can assign or transfer the policy to another party.

Option B: Incorrect (is a right). The policyowner can borrow against the cash value in policies like whole life or universal life.

Option C: Incorrect (is a right). The policyowner can select and change the beneficiary unless restricted (e.g., irrevocable beneficiary).

Option D: Correct (is not a right). An absolute assignment cannot be revoked by the original policyowner without the assignee’s agreement.

This question aligns with the Prometric content outline under “Provisions, Options, Exclusions, Riders, Clauses, and Rights,” which covers policyowner rights and assignments.

Thecoordination of benefits (COB)provision, regulated in Oklahoma (O.A.C. 365:10-5-4), prevents overinsurance by establishing which group health plan isprimary(pays first) and which issecondary(pays remaining covered expenses) when an insured is covered by multiple plans. This ensures claims are paid efficiently without exceeding the total expense. While COB includes rules for dependent children (e.g., the “birthday rule”), its primary purpose is broader, covering all dual-coverage scenarios.

Option A: Incorrect. COB focuses on payment allocation, not ensuring treatment.

Option B: Correct. COB determines payment responsibilities between primary and secondary insurers.

Option C: Incorrect. Determining dependent coverage is a subset of COB, not its primary purpose.

Option D: Incorrect. COB does not protect secondary insurers from paying; it defines their payment role.

Group life insurance is typically provided through an employer or organization, covering multiple individuals under a single master policy. It does not require individual underwriting or evidence of insurability for most members, and premiums are based on the group’s overall risk factors (e.g., age, occupation), as outlined in Oklahoma’s Insurance Code (Title 36 O.S. § 4101 et seq.). A key advantage is that group policies generally havelower ratesper individual compared to individual policies due to risk pooling, making the statement that insureds pay a higher rate incorrect.

Option A: Incorrect (applies). Individual underwriting is not required; the group is assessed as a whole.

Option B: Incorrect (applies). Evidence of insurability is typically not required for standard group coverage.

Option C: Incorrect (applies). Pricing is based on the group’s risk factors.

Option D: Correct (does not apply). Group life insurance rates are generally lower, not higher, than individual policies.

In life and health insurance policies with family or dependent coverage riders, Oklahoma insurance regulations typically allow a 31-day period for the insured to notify the insurer of a newly-born child to add them to the policy for continued coverage. This aligns with standard provisions for automatic coverage of newborns, which often provide temporary coverage from birth (e.g., for 31 days) before requiring formal notification and premium adjustment to maintain coverage.

Option A: Correct. The insured has 31 days to notify the insurer to add a newly-born child, consistent with standard policy provisions and Oklahoma regulations.

Option B: Incorrect. 30 days is not the standard timeframe in Oklahoma for this purpose.

Option C: Incorrect. 21 days is too short and not aligned with typical insurance provisions.

Option D: Incorrect. 14 days is insufficient for the notification period in most policies.

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

Aninducementin insurance involves offering something of value to persuade someone to purchase a policy, which is consideredrebatingand prohibited in Oklahoma unless allowed under specific exceptions (Title 36 O.S. § 1204). Oklahoma allows gifts valued at $100 or less as non-rebating promotional items, so a gift under $100 is not an inducement. Other actions, like promising employment, offering premium payment favors, or giving high-value merchandise, are considered inducements.

Option A: Incorrect (is an inducement). Promising employment to secure a policy sale is rebating.

Option B: Correct (is not an inducement). A gift valued less than $100 is permitted and not considered rebating.

Option C: Incorrect (is an inducement). Special favors in premium payments are rebating.

Option D: Incorrect (is an inducement). Giving merchandise worth $250 exceeds the $100 limit and is rebating.

The primary purpose of life insurance is to provide adeath benefit, which is a financial payout to beneficiaries upon the insured’s death, ensuring financial protection for dependents or obligations (Title 36 O.S. § 4002). While some policies offer cash value or tax advantages, these are secondary to the death benefit.

Option A: Incorrect. Tax deductions are not the primary reason; they may apply to specific scenarios but are secondary.

Option B: Correct. Death benefits are the primary reason for purchasing life insurance.

Option C: Incorrect. Retirement income is a goal of annuities or cash value policies, not the primary purpose.

Option D: Incorrect. Safety of principal relates to investments, not the core purpose of life insurance.

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.

An individual insurance application typically requires signatures from theapplicant(the person applying for the policy), theinsured(if different from the applicant, e.g., a parent applying for a child), and theproducer(to certify the information provided). Theinsurerdoes not sign the application, as their acceptance is indicated by issuing the policy, per Oklahoma’s insurance application processes (Title 36 O.S. § 1435.2).

Option A: Incorrect. The applicant’s signature is required to confirm the application details.

Option B: Incorrect. The insured’s signature is required if they are not the applicant.

Option C: Incorrect. The producer’s signature is required to verify the application process.

Option D: Correct. The insurer’s signature is not required on the application.

This question falls under the Prometric content outline section on “Underwriting,” which covers application requirements.

Credit and accident disability insuranceis designed to make loan payments or pay off a loan balance if the insured becomes disabled due to an accident or sickness, ensuring financial obligations are met. This is a specialized product in Oklahoma (Title 36 O.S. § 4101 et seq.).

Option A: Incorrect. Income replacement is the purpose of disability income insurance, not credit disability.

Option B: Correct. The plan helps pay off a loan during disability.

Option C: Incorrect. Paying medical or dental premiums is not the purpose of credit disability insurance.

Option D: Incorrect. Legal actions are unrelated to credit disability plans.

Afield underwriter, typically an insurance producer, gathers initial information from applicants to assess their insurability and ensure the application is accurate and complete. A main task is ensuring the accuracy and completeness of an individual’s medical information, as this is critical for the insurer’s underwriting decision. Field underwriters do not approve policies or edit reports to guarantee approval; they facilitate the process by providing reliable data.

Option A: Incorrect. Editing reports to ensure approval is unethical and not a field underwriter’s role.

Option B: Incorrect. Approving policies is the role of the insurer’s underwriting department, not the field underwriter.

Option C: Correct. Ensuring accuracy and completeness of medical information is a key task of a field underwriter.

Option D: Incorrect. Obtaining an MIB report is typically done by the insurer, not the field underwriter.

This question aligns with the Prometric content outline under “Underwriting,” which covers the role of field underwriters.

Arideris an endorsement or amendment to an insurance policy that modifies its clauses, provisions, or coverage. Riders can add, remove, or alter benefits, such as adding coverage for a specific condition or family members in life or health insurance policies. The term is standard in Oklahoma insurance law and practice.

Option A: Incorrect. An attachment is not a specific insurance term for policy modifications.

Option B: Incorrect. A supplement may refer to additional coverage but is not the standard term for policy endorsements.

Option C: Correct. A rider is an endorsement that modifies policy provisions.

Option D: Incorrect. “Add-on” is not a formal insurance term for policy modifications.

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

TheFair Credit Reporting Act (FCRA)(15 U.S.C. § 1681) defines aconsumer reportas information communicated by a consumer reporting agency that bears on a consumer’s creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living, used to determine eligibility for credit, insurance, or employment. This is relevant in insurance underwriting for consumer reports.

Option A: Incorrect. Information among related entities is not a consumer report.

Option B: Incorrect. Transaction reports between the consumer and the reporter are excluded from the FCRA definition.

Option C: Correct. A consumer report includes information on credit standing and personal characteristics from a reporting agency.

Option D: Incorrect. Credit card authorizations are not consumer reports under FCRA.

Alevel term-to-age-65 life insurance policyprovides a fixed death benefit until the insured reaches age 65, as long as premiums are paid. Since Jim purchased a $200,000 policy at age 35 and dies at age 50 (before age 65), the full death benefit of $200,000 is payable, assuming the policy is in force.

Option A: Incorrect. $50,000 is not the policy’s face amount.

Option B: Incorrect. $100,000 is not the policy’s face amount.

Option C: Incorrect. $150,000 is not the policy’s face amount.

Option D: Correct. The $200,000 death benefit is paid, as it is a level term policy.

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

Anaccelerated death benefit (ADB)provision allows an insured to receive a portion of the life insurance death benefit before death under specific conditions, such as aterminal illness. Theterminal illness settlement benefitis a form of ADB, providing funds for medical or personal needs, as regulated in Oklahoma (Title 36 O.S. § 4051).

Option A: Incorrect. A home care benefit relates to long-term care, not ADB.

Option B: Incorrect. A nonforfeiture extended term benefit is a policy lapse option, not an ADB.

Option C: Correct. A terminal illness settlement benefit is a type of accelerated death benefit.

Option D: Incorrect. A cost of living benefit adjusts benefits for inflation, not an ADB.

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.

Theincontestable clause, mandated in Oklahoma (Title 36 O.S. § 4004), states that a life insurance policy cannot be contested by the insurer after it has been in force for2 yearsduring the insured’s lifetime, except for non-payment of premiums. This limits the insurer’s ability to deny claims based on application misstatements after this period.

Option A: Correct. The contestable period is 2 years.

Option B: Incorrect. 3 years exceeds the standard period.

Option C: Incorrect. 4 years is not the required timeframe.

Option D: Incorrect. 5 years is too long for the contestable period.

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.

Aparticipating whole life insurance policyissued by a mutual insurer allows policyholders to receive areturn of divisible surplusin the form of dividends, which reflect the insurer’s excess profits. This is a feature of mutual insurers, as defined in Oklahoma’s regulations (Title 36 O.S. § 4002). Limited pay, continuous premium, and straight whole life policies do not inherently include dividends.

Option A: Incorrect. Limited pay whole life has a shorter premium payment period, not necessarily dividends.

Option B: Correct. A participating whole life policy provides dividends from surplus.

Option C: Incorrect. Continuous premium whole life refers to lifelong premium payments, not dividends.

Option D: Incorrect. Straight whole life is a general term, not specific to dividends.

Long-Term Care (LTC) insuranceis designed to cover services for individuals with chronic diseases or disabilities who need assistance with activities of daily living (ADLs) or have cognitive impairments. It often includes coverage for nursing home care, home-based care, assisted living, and respite care, as regulated in Oklahoma under Title 36 O.S. § 4426.1.

Option A: Incorrect. Medicare provides limited coverage for skilled nursing or home health care but not comprehensive LTC services.

Option B: Incorrect. Medicaid covers LTC for low-income individuals but is a government program, not a private insurance policy.

Option C: Correct. LTC insurance covers nursing home, home-based, and respite care for chronic conditions.

Option D: Incorrect. Group health insurance covers medical expenses but typically does not include LTC services.

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

Disability income insurance policies are designed to replace a portion of the insured’s income if they become disabled and unable to work. These policiesmost often pay benefits in the form of periodic income, typically monthly, to provide ongoing financial support during the disability period, as outlined in Oklahoma’s health insurance regulations (Title 36 O.S. § 4405). Lump sum payments or annuities are less common and usually associated with other types of coverage.

Option A: Incorrect. Annuities provide retirement income, not disability benefits.

Option B: Correct. Disability policies typically pay periodic (e.g., monthly) income.

Option C: Incorrect. Lump sum reimbursements are rare in disability policies; periodic payments are standard.

Option D: Incorrect. Lump sum payments based on projected income are not typical for disability insurance.

The Oklahoma Unfair Claims Settlement Practices Act, under Title 36 O.S. § 1250.5, defines practices that constitute unfair or deceptive acts in the settlement of insurance claims. Knowingly misrepresenting pertinent facts or policy provisions related to coverage to a claimant is explicitly listed as an unfair practice, as it misleads policyholders and undermines fair claim handling.

Option A: Correct. Misrepresenting facts or policy provisions is an unfair claims settlement practice under Oklahoma law.

Option B: Incorrect. There is no specific 45-day requirement to interview parties in the Act; timelines relate to acknowledging or settling claims.

Option C: Incorrect. Maintaining an audit trail is a best practice but not explicitly an unfair claims settlement practice.

Option D: Incorrect. Incomplete policy notes are not specifically cited as an unfair practice under the Act.

This question aligns with the Prometric content outline under “State Insurance Statutes, Rules, and Regulations,” which covers unfair claims practices.

In Oklahoma, asmall group health insurance planis defined under Title 36 O.S. § 6512 as coverage for employers with2 to 50 employees, aligning with federal standards under the Affordable Care Act (ACA). Companies with more than 50 employees are considered large groups and subject to different regulations.

Option A: Incorrect. 2 employees is the minimum for a small group plan, not the maximum.

Option B: Incorrect. 10 employees is below the maximum limit.

Option C: Incorrect. 40 employees is within the small group range.

Option D: Correct. A company with more than 50 employees is not eligible for a small group plan.