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Free Oregon Producer's Examination for Life Insurance Practice Questions

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Sample Practice Questions

Try these 10 sample questions from the Oregon Producer's Examination for Life Insurance practice bank. Each includes the answer and explanation. Continue with the interactive practice above to review the full question set.

  1. 1What public interest is the Oregon Insurance Code expressly intended to protect?

    1. A. The insurance-buying public
    2. B. Only domestic insurers
    3. C. Only licensed producers
    4. D. The securities-trading public

    Answer: A

    Explanation: ORS 731.008 says the Code is "for the protection of the insurance-buying public." That stated purpose controls administration of Oregon insurance law.

    Reference: Oregon Revised Statutes — ORS 731.008

  2. 2An insurer wants a consumer report to underwrite an individual's new life insurance application. Under the FCRA, which purpose permits obtaining the report?

    1. A. Using it to advertise unrelated financial products to the applicant.
    2. B. Using it to rank applicants for a separate job opening.
    3. C. Using it in connection with underwriting insurance involving that consumer.
    4. D. Using it to profile the applicant's relatives for future solicitations.

    Answer: C

    Explanation: FTC FCRA guidance identifies a permissible purpose when "the report will be used in connection with the underwriting of insurance involving the consumer". The insurer’s proposed underwriting use fits that purpose.

    Reference: Federal Trade Commission, Consumer Reports: What Insurers Need to Know — FTC Consumer Reports: What Insurers Need to Know, Insurer Obligations, permissible-purpose paragraph

  3. 3A prospect asks whether the chance of an accidental death, which could cause financial loss but offers no chance of gain, is an insurable type of risk. How is that risk classified?

    1. A. As speculative risk because either a gain or a loss can result.
    2. B. As pure risk because a loss or no loss can result, without gain.
    3. C. As investment risk because returns vary with market performance.
    4. D. As entrepreneurial risk because an expected profit may be lost.

    Answer: B

    Explanation: The NAIC states, "Pure risk involves no chance of economic gain". The described accidental-death exposure has loss or no loss, so it is pure risk.

    Reference: NAIC, A Regulator's Introduction to the Insurance Industry — Chapter 1, Risk and Uncertainty, p. 11

  4. 4When comparing an existing policy with a proposed replacement, how must an Oregon producer present the comparison?

    1. A. In writing, signed and dated by the person making it
    2. B. Orally, with no record required
    3. C. Only in the insurer's internal file
    4. D. In an unsigned illustration after delivery

    Answer: A

    Explanation: ORS 746.085 requires the comparison to be in writing and signed and dated by the person making it.

    Reference: Oregon Revised Statutes — ORS 746.085

  5. 5After qualifying group life coverage terminates, how long does an Oregon insured ordinarily have to apply for an individual conversion policy without evidence of insurability?

    1. A. 31 days
    2. B. 10 days
    3. C. 45 days
    4. D. 60 days

    Answer: A

    Explanation: ORS 743.333 provides a conversion application period of "31 days after such termination."

    Reference: Oregon Revised Statutes — ORS 743.333

  6. 6A policyowner assigns an Oregon life policy. Against whom is the assignment effective only after the insurer receives it?

    1. A. The insurer
    2. B. The assignee
    3. C. The policyowner
    4. D. The witness

    Answer: A

    Explanation: Oregon policy-form law permits assignment but protects the insurer until the assignment is filed or received as the policy specifies.

    Reference: Oregon Revised Statutes — ORS 743.150 and applicable assignment provisions

  7. 7Before recommending an annuity in Oregon, what must a producer reasonably believe about the consumer?

    1. A. The consumer has been informed of material features and the recommendation addresses the consumer's financial situation, needs and objectives
    2. B. The consumer has compared every annuity sold nationwide
    3. C. The consumer will surrender every existing product
    4. D. The consumer has waived all disclosure rights

    Answer: A

    Explanation: ORS 743.262 requires a best-interest recommendation based on the consumer's financial situation, insurance needs and financial objectives, with reasonable disclosure of material features.

    Reference: Oregon Revised Statutes — ORS 743.262

  8. 8A beneficiary receives the death benefit from a life policy held since issue, with no transfer for value or reportable policy sale. How are the ordinary proceeds generally treated for federal income tax?

    1. A. Taxable in full as ordinary income because the insurer paid cash.
    2. B. Taxable only for proceeds above the deceased insured's policy cost.
    3. C. Generally excluded from income as death proceeds to the beneficiary.
    4. D. Taxable as capital gain because the insurer paid the beneficiary.

    Answer: C

    Explanation: IRS Publication 525 states, "Life insurance proceeds paid to you because of the death of the insured person generally aren’t taxable unless" a transfer-for-value or reportable-sale exception applies. Neither exception is present.

    Reference: Internal Revenue Service, Publication 525 — Life Insurance Proceeds

  9. 9An Oregon resident applies for an individual producer license. What minimum age must the applicant have reached?

    1. A. 18
    2. B. 19
    3. C. 20
    4. D. 21

    Answer: A

    Explanation: ORS 744.059 requires the applicant to be "at least 18 years of age."

    Reference: Oregon Revised Statutes — ORS 744.059(1)(a)

  10. 10A person convicted of a felony involving dishonesty seeks to work in Oregon's insurance business. What must the person obtain to overcome the 18 U.S.C. 1033 prohibition?

    1. A. An insurer's written appointment filed after employment begins.
    2. B. Written consent from the Oregon insurance regulator to participate in the business.
    3. C. A written waiver signed by prospective policyholders.
    4. D. A new producer examination score from the testing vendor.

    Answer: B

    Explanation: ORS 731.428 permits an affected applicant to seek "a written consent to engage or participate in the business of insurance." The consent comes from the Oregon Director, not a carrier or customer.

    Reference: Oregon Revised Statutes, Chapter 731 — ORS 731.428, Consent to engage in insurance business, subsection (1)

Topics in this practice bank

These topics describe the available practice for Oregon Producer's Examination for Life Insurance. Review the examination outline and its sources for scope and allocation details.

  • Insurance Regulation
    • Licensing
    • Licensing / Purpose
    • Licensing / Process (ORS 744.058, .059, .062)
    • Licensing / Types of licensees
    • Licensing / Types of licensees / Producers (ORS 744.052, .053, 731.104)
    • Licensing / Types of licensees / Consultants (ORS 744.605, .609, .626; OAR 836-071-0150)
    • Licensing / Types of licensees / Adjusters (ORS 744.531)
    • Licensing / Types of licensees / Nonresidents (ORS 744.063)
    • Licensing / Types of licensees / Temporary (ORS 744.073)
    • Licensing / Maintenance and duration
    • Licensing / Maintenance and duration / Renewal and nonrenewal (ORS 744.072, .074) OAR 836-071-0146)
    • Licensing / Maintenance and duration / Continuing education requirements (ORS 744.072(4); OAR 836-071-0215 to 0250)
    • Licensing / Maintenance and duration / Reinstatement (ORS 744.018, .072(6))
    • Licensing / Maintenance and duration / Assumed business name (ORS 744.028(2),.068)
    • Licensing / Maintenance and duration / Change of address or telephone number (ORS 744.068)
    • Licensing / Maintenance and duration / Reporting of actions (ORS 744.089(1), (2); )
    • Licensing / Maintenance and duration / Suitability (OAR 836-080-0090; OAR 836-080-0170 to 0190)
    • Licensing / Maintenance and duration / Replacement (OAR 836-080-0001 to 0043)
    • Licensing / Disciplinary actions
    • Licensing / Disciplinary actions / Cease and desist orders (ORS 731.252)
    • Licensing / Disciplinary actions / License probation, suspension, revocation or refusal to issue or renew (ORS 744.074)
    • Licensing / Disciplinary actions / Civil penalty (ORS 731.988)
    • Licensing / Disciplinary actions / Criminal penalty (ORS 731.992)
    • State regulation
    • State regulation / Director's enforcement authority (ORS 731.256)
    • State regulation / Director's enforcement authority (ORS 731.256) / Director's inquiries (ORS 731.296)
    • State regulation / Company regulation
    • State regulation / Company regulation / Producer appointment (ORS 744.078)
    • State regulation / Company regulation / Termination of appointment (ORS 744.079, .081)
    • State regulation / Company regulation / Unfair claim settlement practices (ORS 746.230; OAR 836-080-0205 to 0250)
    • State regulation / Producer regulation
    • State regulation / Producer regulation / Fiduciary and trust account responsibilities (ORS 744.083; OAR 836-074-0020 to 0050)
    • State regulation / Producer regulation / Place of business/records maintenance (ORS 744.068)
    • State regulation / Producer regulation / Controlled business (ORS 746.065, .160)
    • State regulation / Producer regulation / Commissions (ORS 744.076, .077; OAR 836-071-0269–0277)
    • State regulation / Producer regulation / Fees (ORS 744.076, .077; OAR 836-071-0260 to 0277)
    • State regulation / Unfair trade practices
    • State regulation / Unfair trade practices / Misrepresentation (ORS 746.075, .100)
    • State regulation / Unfair trade practices / False advertising (ORS 746.110; OAR 836-080-0155)
    • State regulation / Unfair trade practices / Rebating (ORS 746.045)
    • State regulation / Unfair trade practices / Unfair discrimination (ORS 746.015; OAR 836-081-0005, 0010, 0020, 0030)
    • State regulation / Unfair trade practices / Illegal inducement (ORS 746.035)
    • State regulation / Examination of records (ORS 744.068(2, 3))
    • State regulation / Examination of records (ORS 744.068(2, 3)) / Privacy of Consumer Information (ORS 746.600, .620, .630, .665; OAR 836-080-0501 to 836-080-0551)
  • Federal Laws and Regulations
    • Fair Credit Reporting Act - purpose
    • 18 United States Code (USC) Sections 1033 and 1034 - Purpose (Letter of Written Consent)
    • National Do Not Call List
  • General Insurance Concepts
    • Risk
    • Risk / Definitions (e.g., risk, hazard, peril, loss)
    • Risk / Methods of handling risk (e.g., avoidance, retention, sharing, reduction, transfer)
    • Risk / Elements of insurable risks
    • Classifications of insurers
    • Classifications of insurers / Mutual, stock
    • Classifications of insurers / Admitted, non-admitted
    • Classifications of insurers / Foreign, domestic, alien
    • Authority and powers of producer
    • Authority and powers of producer / Express
    • Authority and powers of producer / Implied
    • Authority and powers of producer / Apparent
    • Authority and powers of producer / The Law of Agency
    • Elements of a contract
    • Elements of a contract / Offer
    • Elements of a contract / Acceptance
    • Elements of a contract / Consideration
    • Elements of a contract / Competent parties
    • Elements of a contract / Legal purpose
    • Legal interpretations affecting contracts
    • Legal interpretations affecting contracts / Reasonable expectations - good faith
    • Legal interpretations affecting contracts / Indemnity
    • Legal interpretations affecting contracts / Good faith
    • Legal interpretations affecting contracts / Warranties, representations, misrepresentations, and concealment
    • Legal interpretations affecting contracts / Fraud
  • Life Insurance Basics
    • Insurable interest (ORS 743.040, .038, .044 )
    • Personal uses of life insurance
    • Personal uses of life insurance / Survivor protection
    • Personal uses of life insurance / Liquidity
    • Life settlements (ORS 744.318., .321, .323, .326,.328; OAR 836-014-0200–0330)
    • Determining amount of personal life insurance
    • Human life value approach
    • Needs approach
    • Business uses of life insurance
    • Buy-sell funding
    • Key person (ORS 743.228)
    • Executive bonuses
    • Factors in premium determination
    • Mortality
    • Interest
    • Expense
    • Premium frequency
    • Types of life insurance policies (ORS 731.102, .170)
    • Group and individual (ORS 731.150, 743.303,)
    • Permanent, term, variable and annuities (ORS 731.156, 743.245)
    • Fixed versus variable life insurance and annuities including regulation of variable products (SEC, FINRA, and Oregon) (ORS 733.220)
    • Solicitation and sales presentations (OAR 836-051-0005–0020)
    • Solicitation and sales presentations (OAR 836-051-0005–0020) / Advertising (ORS 746.075, .110, .115)
    • Solicitation and sales presentations (OAR 836-051-0005–0020) / Oregon Life and Health Insurance Guaranty Association (ORS 734.750–.890)
    • Solicitation and sales presentations (OAR 836-051-0005–0020) / Association (ORS 743.351)
    • Solicitation and sales presentations (OAR 836-051-0005–0020) / Illustrations (OAR 836-051-0500–0600)
    • Replacement (ORS 746.085; OAR 836-080- 0001–to 0043) 080-0430)
    • Field underwriting
    • Field underwriting / Application procedures
    • Field underwriting / Warranties and representations
    • Policy delivery
    • Policy delivery / Policy review
    • Policy delivery / Effective date of coverage
    • Policy delivery / Premium collection
    • Policy delivery / Statement of good health
    • Company underwriting
    • Company underwriting / Sources of information
    • Company underwriting / Sources of information / Application (ORS 743.039, .318)
    • Company underwriting / Sources of information / Medical examinations and lab tests (including HIV consent) (OAR 836-050-0250)
    • Company underwriting / Selection criteria and unfair discrimination (OAR 836-081-0005, 0010)
    • Company underwriting / Sexual orientation prohibited (OAR 836-050-0240)
    • Company underwriting / Medical and lifestyle questions (OAR 836-050-0245)
    • Company underwriting / Prohibited discrimination (ORS 746.015)
    • Company underwriting / Evidence of insurability (ORS 743.321)
    • Company underwriting / Incontestability (ORS 743.315)
    • Company underwriting / Suitability in the sale of life insurance (OAR 836-080-0090)
    • Company underwriting / Classifications of risk (preferred, standard, substandard, declined)
  • Types of Life Insurance Policies
    • Term life insurance
    • Term life insurance / Level
    • Term life insurance / Decreasing
    • Term life insurance / Increasing term
    • Whole (permanent, ordinary) life insurance
    • Whole (permanent, ordinary) life insurance / Continuous premium
    • Whole (permanent, ordinary) life insurance / Limited payment
    • Whole (permanent, ordinary) life insurance / Single premium
    • Whole (permanent, ordinary) life insurance / Adjustable life
    • Universal life
    • Variable life
    • Variable universal
    • Indexed universal life
    • Specialized policies
    • Specialized policies / Joint life
    • Specialized policies / Juvenile life
    • Specialized policies / Survivorship Life
    • Group life insurance
    • Group life insurance / Eligible groups
    • Group life insurance / Characteristics of group life insurance
    • Group life insurance / Conversion to individual policy(ORS 743.333–.339)
    • Group life insurance / Incontestability (ORS 743.315)
    • Group life insurance / Evidence of Insurability (ORS 743.321)
    • Group life insurance / Misstatement of Age (ORS 743.324)
    • Group life insurance / Payments under the policy (ORS 743.327)
    • Group life insurance / Termination of individual coverage (ORS 743.333)
    • Group life insurance / Continuing coverage (ORS 743.356)
    • Group life insurance / Prohibited sales practices (ORS 743.348)
    • Group life insurance / Policies issued to trustees of certain funds (ORS 743.354)
  • Life Insurance Policy Provisions, Options and Riders
    • Standard life insurance provisions
    • Standard life insurance provisions / Ownership
    • Standard life insurance provisions / Assignment (ORS 743.043)
    • Standard life insurance provisions / Entire contract (ORS 743.174)
    • Standard life insurance provisions / Right to examine (free look)
    • Standard life insurance provisions / Payment of premiums (ORS 743.162)
    • Standard life insurance provisions / Grace period (ORS 743.165)
    • Standard life insurance provisions / Reinstatement (ORS 743.171)
    • Standard life insurance provisions / Incontestability (ORS 743.168, .315)
    • Standard life insurance provisions / Misstatement of age/sex (ORS 743.180)
    • Standard life insurance provisions / Prohibited provisions including backdating (ORS 743.225)
    • Beneficiary designation options
    • Beneficiary designation options / Individuals
    • Beneficiary designation options / Classes
    • Beneficiary designation options / Minors
    • Types of beneficiaries
    • Types of beneficiaries / Primary and contingent
    • Beneficiary-related clauses
    • Beneficiary-related clauses / Common disaster
    • Settlement options
    • Settlement options / Cash payment (lump sum)
    • Settlement options / Interest only
    • Settlement options / Fixed-period
    • Settlement options / Fixed-amount installments
    • Settlement options / Life income
    • Settlement options / Joint
    • Settlement options / Last survivor
    • Nonforfeiture options (ORS 743.204 to .210)
    • Nonforfeiture options (ORS 743.204 to .210) / Cash surrender value
    • Nonforfeiture options (ORS 743.204 to .210) / Extended term
    • Nonforfeiture options (ORS 743.204 to .210) / Reduced paid-up insurance
    • Policy loan and withdrawal options
    • Policy loan and withdrawal options / Loans
    • Policy loan and withdrawal options / Automatic premium loans
    • Policy loan and withdrawal options / Withdrawals partial surrenders
    • Policy loan and withdrawal options / Uses of dividends (ORS 743.183)
    • Policy loan and withdrawal options / Interest rate (ORS 743.187)
    • Dividend options
    • Dividend options / Cash payment (lump sum)
    • Dividend options / Reduction of premium
    • Dividend options / Accumulation at interest
    • Dividend options / One-year term
    • Dividend options / Paid-up additions
    • Disability riders
    • Disability riders / Waiver of premium
    • Disability riders / Disability income benefit
    • Disability riders / Payor benefit life
    • Accelerated (living) benefit provision/rider (ORS 743.154; OAR 836-051-0300–0380, 836-052–0646)
    • Accelerated (living) benefit provision/rider (ORS 743.154; OAR 836-051-0300–0380, 836-052–0646) / Qualifying events
    • Accelerated (living) benefit provision/rider (ORS 743.154; OAR 836-051-0300–0380, 836-052–0646) / Disclosure
    • Accelerated (living) benefit provision/rider (ORS 743.154; OAR 836-051-0300–0380, 836-052–0646) / Effect of benefit payment
    • Riders covering additional insureds
    • Riders covering additional insureds / Spouse
    • Riders covering additional insureds / Children
    • Riders covering additional insureds / Family term rider
    • Riders affecting the death benefit amount
    • Riders affecting the death benefit amount / Accidental death
    • Riders affecting the death benefit amount / Guaranteed insurability
    • Riders affecting the death benefit amount / Cost of living
    • Riders affecting the death benefit amount / Return of premium
    • Riders affecting the death benefit amount / Accelerated (living) benefit provision rider
    • Riders affecting the death benefit amount / Long-term care rider
    • Policy exclusions
  • Annuities
    • Annuity principles and concepts
    • Annuity principles and concepts / Accumulation period versus annuity period
    • Annuity principles and concepts / Owner, annuitant and beneficiary
    • Annuity principles and concepts / Suitability in the sale of annuities (OAR 836-080-0090)
    • Immediate versus deferred annuities
    • Annuity (benefit) payment options
    • Annuity (benefit) payment options / Life contingency options
    • Annuity (benefit) payment options / Pure life versus life with guaranteed minimum
    • Annuity (benefit) payment options / Single life versus multiple life
    • Annuity (benefit) payment options / Annuities certain
    • Annuity products
    • Annuity products / Fixed annuities
    • Annuity products / Equity indexed annuities
    • Annuity products / Variable annuities
    • Uses of annuities
    • Uses of annuities / Lump-sum settlements
    • Uses of annuities / Retirement income
    • Uses of annuities / Long-term care rider
    • Uses of annuities / Guaranteed Minimum Withdrawal Benefit (GMWB)
  • Federal Tax Considerations for Life Insurance
    • Taxation of personal life insurance and annuities
    • Taxation of personal life insurance and annuities / Dividends
    • Taxation of personal life insurance and annuities / Settlements
    • Taxation of personal life insurance and annuities / Values included in insured's estate
    • Taxation of personal life insurance and annuities / Premiums
    • Taxation of personal life insurance and annuities / Last In First Out (LIFO) and First In First Out (FIFO)
    • Taxation of personal life insurance and annuities / Surrenders and withdrawals
    • Modified endowment contracts (MECs)

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These are independent study questions, not actual examination items. For examination requirements and official information, view Oregon Producer's Examination for Life Insurance details.