Ok-Life-Accident-and-Health-or-Sickness-Producer Insurance Licensing Oklahoma Life, Accident, and Health or Sickness Producer Exam Free Practice Exam Questions (2025 Updated)

In group health insurance, the employer or group sponsor receives themaster policy, while employees covered under the plan are issued acertificate of insurance, which summarizes their coverage but is not the policy itself, as per Oklahoma’s regulations (Title 36 O.S. § 6060.3).

Option A: Incorrect. Employees do not receive individual policies; the employer holds the master policy.

Option B: Incorrect. The contract is the master policy, not issued to employees.

Option C: Incorrect. “Covenant” is not an insurance term.

Option D: Correct. Employees receive a certificate of insurance.

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 a life insurance policy, theprimary beneficiaryis the first in line to receive the death benefit. If the primary beneficiary predeceases the insured, the benefits are paid to thecontingent (or secondary) beneficiaries, as specified in the policy. If no contingent beneficiaries are named, the benefits typically go to the insured’s estate, but “contingent beneficiaries” is the correct choice here (Title 36 O.S. § 4001 et seq.).

Option A: Incorrect. Benefits are not paid to “no one”; they go to contingent beneficiaries or the estate.

Option B: Incorrect. “Tertiary beneficiaries” is not a standard term in life insurance.

Option C: Correct. Contingent beneficiaries receive benefits if the primary beneficiary dies.

Option D: Incorrect. “Sub-primary beneficiaries” is not a recognized term.

In aterm life insurance policy, premiums are typicallylevelduring the policy term (e.g., 10, 20 years), meaning they remain constant. At renewal, premiums may increase based on the insured’s attained age, but during the initial term, they are fixed, as outlined in Oklahoma’s life insurance regulations (Title 36 O.S. § 4002).

Option A: Incorrect. Convertible refers to a policy’s ability to convert to permanent insurance, not premium structure.

Option B: Correct. Premiums are level during the term prior to renewal.

Option C: Incorrect. Variable premiums apply to certain flexible policies like universal life, not term.

Option D: Incorrect. Adjustable premiums are not a standard term for level term policies.

In Oklahoma’s Insurance Code (Title 36 O.S. § 105), aforeign insureris defined as an insurance company formed under the laws of another U.S. state or territory. This distinguishes it from adomestic insurer(formed in Oklahoma) and analien insurer(formed in a foreign country).

Option A: Incorrect. An insurer formed in Oklahoma is a domestic insurer.

Option B: Incorrect. An insurer from a foreign country is an alien insurer.

Option C: Correct. A foreign insurer is formed under the laws of another U.S. state or government.

Option D: Incorrect. Geographic proximity is irrelevant; the definition is based on legal formation.

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