OHIO Life Insurance Agent Series 11-44

Insurable interest is tested when a life insurance policy is issued. At that point, the business had a lawful economic interest in the debtor's continued life and obtained consent. Repayment later ended the debt, but it did not invalidate coverage that was properly supported by insurable interest at issue.

Section 1035 of the Internal Revenue Code permits certain tax-free exchanges of insurance and annuity contracts. A life insurance policy may generally be exchanged for another life insurance policy or an annuity, and an annuity may be exchanged for another annuity. However, an annuity cannot be exchanged for a life insurance policy under Section 1035, so such a transaction would not qualify for tax-free exchange treatment.

An information security program is the organized set of administrative, technical, and physical safeguards used throughout the handling of nonpublic information. It governs access, collection, protection, storage, use, and disposal. A risk assessment may inform that program, but it is only an evaluation rather than the complete safeguarding framework.

The owner holds the contractual rights in a life insurance policy, including the right to name the beneficiary who will receive the death proceeds. The insured is the person whose life is covered, but that status alone does not confer ownership rights. A producer facilitates the insurance transaction and does not control the beneficiary designation.

Adjustable life is designed to let the policyowner modify important policy features as needs change, including the premium arrangement and amount of coverage within the policy's terms. That flexibility distinguishes it from policies built around a fixed structure. The ability to adjust these two features identifies adjustable life.

Insurance is designed to transfer the financial impact of a fortuitous loss, meaning an event that may or may not occur. If the loss is expected, it is no longer an accidental risk; the policyholder would be seeking payment for a known or intended cost rather than protection against chance. Therefore, an expected loss is generally not insurable.

Single-life insurance is written on one individual's life and pays according to the death of that one insured. Joint life and survivorship policies involve two or more insured lives and use different death triggers. Because the contract described covers only an individual, the single-life structure matches its defining scope.

Variable universal life combines flexible universal life features with policyowner-directed investment choices. Its distinctive feature is the right to select among the available investments in pursuit of the desired return. The policyowner bears the consequences of those selections, so the right concerns choosing the investment rather than receiving a guaranteed greatest return.

Key person insurance protects a business against financial harm caused by the death of an employee whose services are especially important. The employer purchases the policy, pays the premiums, and is the beneficiary entitled to the proceeds. The key employee is the insured person, so the employee, spouse, or a business partner does not receive the benefit merely because of that role.

Straight life bases payments on one annuitant's lifetime and adds no guaranteed period, refund feature, or second life that could extend the insurer's payment obligation. With the same value available at annuitization, removing those additional guarantees permits the largest monthly amount. Joint or guaranteed-payment arrangements spread the value across a potentially longer payout period.