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)

Term life insurance provides coverage for a specific period at a lower premium cost compared to permanent insurance, such as whole life. The primary advantage is its affordability, making it suitable for individuals needing significant coverage with lower initial costs. Unlike whole life, term life does not accumulate cash value, and premiums typically increase upon renewal as the insured ages.

Option A: Incorrect. Premiums for term life do not decrease as the insured ages; they increase at renewal due to higher risk.

Option B: Incorrect. While death benefits in level term policies remain constant during the term, this is not the primary advantage compared to lower costs.

Option C: Correct. Term life has lower initial costs, making it more affordable for the same coverage amount compared to permanent insurance.

Option D: Incorrect. Term life does not offer a cash value, a feature of permanent insurance.

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

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.

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.

Oklahoma insurance regulations require licensees, including insurance producers, to promptly notify the Insurance Commissioner of any change in their address to ensure accurate communication and compliance with licensing requirements. The Oklahoma Insurance Code, specifically Title 36 O.S. § 1435.13, mandates that "a licensee shall inform the Insurance Commissioner in writing of a change of address within thirty (30) days of the change." Failure to notify within this timeframe may result in administrative actions, such as fines or license suspension.

The Oklahoma Life, Accident, and Health or Sickness Producer Study Guide reinforces this requirement, stating, "Producers must notify the Oklahoma Insurance Department of any change in their business or residential address within 30 days to maintain compliance with licensing regulations." This makes option A the correct answer.

Permanent life insurance policies with a cash value (e.g., whole life, universal life) allow policyholders to take loans against the cash value. According to IRS guidelines and standard insurance principles, policy loans are not considered taxable income because they are treated as a debt against the policy’s cash value, not as income. However, if the policy lapses or is surrendered with an outstanding loan, the loan amount exceeding the policy’s basis may become taxable.

Option A: Incorrect. Policy loans do not accelerate benefits (e.g., death benefits or living benefits); they reduce the cash value and death benefit until repaid.

Option B: Correct. Policy loan proceeds are not treated as taxable income, as they are a loan against the policy’s cash value.

Option C: Incorrect. Policy loans are not subject to Federal estate tax unless the policy’s death benefit is included in the estate, which is unrelated to the loan itself.

Option D: Incorrect. Interest on policy loans is not nontaxable; it is charged by the insurer and does not generate income for the policyholder.

This question falls under the Prometric content outline section on “Provisions, Options, Exclusions, Riders, Clauses, and Rights,” which includes knowledge of policy loans and their tax implications.

Major medical insuranceis designed to cover significant healthcare expenses, particularly those related to hospitalization, surgeries, and other high-cost medical services. It focuses on providing comprehensive coverage for catastrophic or major medical events, as opposed to routine or preventive care, which may be covered to a lesser extent or through separate plans.

Option A: Incorrect. Preventive care is often included but is not the primary focus of major medical insurance.

Option B: Incorrect. Using in-network facilities reduces costs but is a feature of managed care plans, not the core focus of major medical insurance.

Option C: Correct. The focus of major medical insurance is covering hospitalization and other major expenses.

Option D: Incorrect. Providing care to the needy is associated with programs like Medicaid, not private major medical insurance.

This question falls under the Prometric content outline section on “Health Providers and Products,” which covers the characteristics of major medical insurance.

Ordinary life insurance, often synonymous with whole life insurance, is a type of permanent life insurance that provides coverage for the insured’s entire life, as long as premiums are paid. It typically includes a level premium, a guaranteed death benefit, and a cash value component that grows over time. It is designed to offer permanent protection with some flexibility, such as the ability to borrow against the cash value or adjust premiums in certain policies (e.g., universal life).

Option A: Incorrect. This describes term life insurance, which provides temporary protection during income-earning years. Ordinary life insurance is permanent, and cash values are not specifically “payable” during non-earning periods but can be accessed.

Option B: Incorrect. Ordinary life is not an endowment policy (which matures at a specific age) or tied directly to income levels. It is a whole life policy with level premiums.

Option C: Correct. Ordinary life insurance provides permanent protection and some flexibility (e.g., cash value loans, dividend options in participating policies) with premiums that are generally lower than other permanent products like limited-pay whole life.

Option D: Incorrect. Ordinary life is not temporary; it provides lifelong coverage. While it accumulates cash value, the protection is permanent, not limited to the policyowner’s life expectancy.

This question is part of the Prometric content outline under “Life Products,” focusing on the characteristics of ordinary (whole) life insurance.

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.

In Health Maintenance Organizations (HMOs), thegatekeeper strategyinvolves a primary care physician (PCP) who coordinates patient care and provides referrals to specialists. This ensures that care is managed efficiently and only necessary specialist visits are authorized, aligning with the HMO’s cost-containment model.

Option A: Incorrect. Refusing coverage for preexisting conditions is unrelated to the gatekeeper role and is regulated by HIPAA, not HMO strategy.

Option B: Correct. The gatekeeper strategy requires referrals from a PCP to see specialists, a hallmark of HMO plans.

Option C: Incorrect. HMOs encourage preventive care, not preventing service use, to manage costs.

Option D: Incorrect. Supplemental services at additional cost are not part of the gatekeeper strategy.

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

Medicare supplemental insurance(Medigap) covers gaps in Original Medicare (Parts A and B), such as deductibles, coinsurance, and certain costs not covered by Medicare. A core benefit, included in most Medigap plans (e.g., Plans A–N), is coverage for thefirst 3 pints of bloodeach year, which Medicare Part A does not cover. Other options like at-home recovery or prescription drugs are not core benefits, and preventive care is covered by Medicare, not Medigap.

Option A: Correct. The first 3 pints of blood is a core Medigap benefit.

Option B: Incorrect. At-home recovery is not a standard core benefit in most Medigap plans.

Option C: Incorrect. Prescription drug coverage is not a core Medigap benefit; it’s covered by Medicare Part D.

Option D: Incorrect. Preventive care is covered by Medicare Part B, not a core Medigap benefit.

This question falls under the Prometric content outline section on “Medicare,” which covers Medigap benefits.

Ordinary life insurance, synonymous with whole life insurance, is a level premium permanent insurance product that accumulates a cash value (or reserve) over time. By design, the cash value grows and, at the policy’s maturity (typically age 100 or 121, depending on the policy), equals the face amount of the policy, at which point the policy endows (pays out the face amount to the policyowner if the insured is still alive).

Option A: Correct. The cash value (reserve) in a whole life policy eventually equals the face amount at maturity.

Option B: Incorrect. Dividends are paid only in participating policies, not all whole life policies, and are not guaranteed.

Option C: Incorrect. The cash value continues to earn interest or grow, typically at a guaranteed rate, until maturity.

Option D: Incorrect. There are no mandatory cash value distributions; policyowners can choose to access the cash value.

This question aligns with the Prometric content outline under “Life Products,” which covers the cash value accumulation in whole life insurance.

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.

Ahospital indemnity policypays a fixed daily, weekly, or monthly benefit directly to the insured for hospitalization, regardless of other insurance coverage or actual expenses incurred. This is a supplemental policy common in Oklahoma (Title 36 O.S. § 4405).

Option A: Incorrect. “Limited-amount per diem” is not a standard insurance term.

Option B: Incorrect. Blanket policies cover groups for specific risks, not individual hospitalization benefits.

Option C: Incorrect. Medigap covers Medicare gaps, not fixed hospitalization payments.

Option D: Correct. Hospital indemnity policies pay a fixed amount per day for hospitalization.

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.

Oklahoma requires insurance producers to complete 24 hours of continuing education (CE) every 2 years, including 3 hours of ethics and 2 hours of legislative updates (Title 36 O.S. § 1435.29; O.A.C. 365:25-3-1). Failure to meet CE requirements results innonrenewal of the license, as the Oklahoma Insurance Department will not renew until CE is completed. Revocation or felony charges apply to more serious violations (e.g., fraud), not CE non-compliance.

Option A: Incorrect. There is no provision for additional CE hours as a penalty; CE must be completed for renewal.

Option B: Incorrect. CE failure is not a felony; it’s an administrative issue.

Option C: Correct. Nonrenewal of the license occurs if CE requirements are not met.

Option D: Incorrect. Revocation is for severe violations, not CE non-compliance.

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.

Medicare Advantage (Part C)plans are private health plans approved by Medicare, includingPPOs,HMOs, andPFFSplans, which provide an alternative to Original Medicare.Social Security Disability Income (SSDI)is a federal program providing income support for disabled individuals, not a Medicare Advantage plan.

Option A: Incorrect. PPO plans are a type of Medicare Advantage plan.

Option B: Incorrect. HMO plans are a type of Medicare Advantage plan.

Option C: Incorrect. PFFS plans are a type of Medicare Advantage plan.

Option D: Correct. SSDI is not a Medicare Advantage plan; it is a disability income program.

This question aligns with the Prometric content outline under “Medicare,” which covers Medicare Advantage plans.

Whole life insurance policies accumulate cash value over time, which policyowners can borrow against. Typically, cash value begins to accrue immediately, but sufficient value for a loan is often available after1 year, depending on the policy’s terms and premium payments. Oklahoma law (Title 36 O.S. § 4029) requires nonforfeiture benefits, including access to cash value, but does not specify a minimum time; insurer practices generally allow loans after 1 year when cash value is meaningful.

Option A: Incorrect. Policyowners can borrow against cash value once it accumulates.

Option B: Correct. Loans are typically available after 1 year, as cash value is sufficient.

Option C: Incorrect. 2 years is not a standard requirement; loans are often available sooner.

Option D: Incorrect. 3 years is excessive; most policies allow loans earlier.

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