Ohio Life Insurance Practice Exam Free - 2026

• A. From the date the insurer receives due proof of death
• B. From the thirty-first day after the claim is filed
• C. From the date of death of the insured
• D. From the date the beneficiary's election is received

Correct answer: C. From the date of death of the insured

Explanation: Ohio requires interest on life insurance death proceeds to run from the date of death to the date of payment, at the greater of the applicable federal short-term rate for the month of death or the policy's interest settlement option rate. The rule applies where the insured was an Ohio resident at death and the beneficiary elects a lump sum in writing, so proof-of-death, claim-filing, and election dates are not the statutory starting point. See ORC 3915.052.

• A. Within five business days
• B. Within thirty days
• C. Within ten business days
• D. Within three business days

Correct answer: A. Within five business days

Explanation: Ohio's replacement rule requires the replacing insurer to verify compliance and notify each existing insurer within five business days of receiving a completed application that indicates replacement; it must also keep indexed replacement records for at least five years or until the next regular examination. The thirty-day figure belongs to other Ohio deadlines such as appointment filing, and the other intervals are not in the rule. See OAC 3901-6-05.

• A. A ten-day right to return the policy and receive its cash value plus any unearned premium then held by the insurer
• B. A twenty-day right to cancel the contract and receive the premiums paid, less a reasonable administrative charge
• C. A thirty-day right to return the contract for an unconditional refund of all premiums and any policy fees or charges
• D. A sixty-day right to exchange the contract for a comparable policy from the same insurer without new evidence of insurability

Correct answer: C. A thirty-day right to return the contract for an unconditional refund of all premiums and any policy fees or charges

Explanation: In a replacement transaction the Ohio rule gives the owner thirty days from delivery to return the policy or contract and receive a full unconditional refund of everything paid, including policy fees and charges. No deduction for administrative charges or cash-value substitution applies, and Ohio imposes no general statutory free look on all life policies, so the shorter and longer alternatives are wrong. See OAC 3901-6-05.

• A. A caveat emptor standard requiring only accurate product disclosure
• B. A full fiduciary standard identical to that of a registered investment adviser
• C. A suitability-only standard limited to matching the product to stated financial objectives
• D. A best interest standard of conduct owed to the consumer

Correct answer: D. A best interest standard of conduct owed to the consumer

Explanation: Ohio's annuity rule adopts a best interest standard of conduct for producers and insurers in annuity transactions, and producers must complete a one-time annuity best interest training course before selling annuities. The standard is deliberately higher than the older suitability-only test but the rule does not impose a fiduciary duty, and disclosure alone is never sufficient. See OAC 3901-6-13.

• A. Adverse selection
• B. Physical hazard
• C. Misrepresentation
• D. Speculative risk

Correct answer: A. Adverse selection

Explanation: Participation and eligibility rules help prevent adverse selection, where people most likely to need coverage are disproportionately the ones who enroll.

• A. replace lost profits while a key employee recovers
• B. help transfer a deceased owner's business interest
• C. fund a deferred compensation promise to an executive
• D. pay off the company's debts to its general creditors

Correct answer: B. help transfer a deceased owner's business interest

Explanation: Life insurance can fund a buy-sell agreement by providing money to purchase a deceased owner's business interest according to the agreement.

• A. the cost of purchasing a deceased partner's share of the business
• B. liability claims brought by the families of employees who die on the job
• C. financial loss caused by the death of an important employee or owner
• D. the obligation to pay death benefits to a key employee's family

Correct answer: C. financial loss caused by the death of an important employee or owner

Explanation: Key person insurance helps a business manage the financial impact of losing a person whose skills, relationships, or leadership are important to operations.

• A. The employee's neighbor
• B. The exam vendor
• C. The state insurance department
• D. The business

Correct answer: D. The business

Explanation: In a key person arrangement, the business commonly owns the policy, pays the premium, and receives the proceeds if the key person dies.

• A. business owners buying policies on each other
• B. the business buying auto insurance for all customers
• C. an insurer purchasing the state exam vendor
• D. a beneficiary buying the master group policy

Correct answer: A. business owners buying policies on each other

Explanation: In a cross-purchase plan, each owner typically owns a policy on the other owner or owners, providing funds to buy the deceased owner's interest.

• A. each owner owns a policy on every other owner and buys the deceased owner's interest
• B. the business owns policies on the owners and buys the deceased owner's interest
• C. the deceased owner's heirs own the policy and keep the business interest
• D. the surviving owners personally pay the estate from their own after-tax income

Correct answer: B. the business owns policies on the owners and buys the deceased owner's interest

Explanation: In an entity-purchase arrangement, the business is commonly the policyowner and uses proceeds to redeem or purchase the deceased owner's interest.

• A. Cross-purchase agreement
• B. Key person life insurance
• C. Executive bonus arrangement
• D. Business overhead expense policy

Correct answer: C. Executive bonus arrangement

Explanation: An executive bonus arrangement uses life insurance as part of compensation for selected employees or executives, subject to tax and employment rules.

• A. replacing an executive's salary during a temporary disability
• B. providing retirement income to all rank-and-file employees
• C. insuring the company's inventory and equipment against loss
• D. providing funds after an owner's or key person's death

Correct answer: D. providing funds after an owner's or key person's death

Explanation: Business continuation planning uses life insurance to create liquidity when a death could disrupt ownership, operations, or financial stability.