Maryland Life Producer Final Exam Questions
and Answers
All of the following actions are considered rebating EXCEPT
1. sharing commissions with other licensed and appointed agents
2.refunding part of the premium as an inducement for purchase
3.offering special dividends
4. offering anything of value not specified in the policy - ANSWER-1. sharing
commissions with other licensed and appointed agents
Peter has a policy where 80% to 90% of the premium is invested in traditional fixed
income securities and the remainder of the premium is invested in contracts tied to
a stipulated stock index. What kind of policy is this?
1. Modified Endowment Contract
2. Current assumptive whole life
3.Credit life insurance
4. Equity index whole life - ANSWER-4."Equity index whole life". The type of policy
where 80% to 90% of the premium is invested in traditional fixed income securities
and the remainder of the premium is invested in contracts tied to a stipulated stock
index is equity index whole life.
A tax-free Section 1035 Exchange of a life insurance policy to a different policy is
permitted if it occurs
1. in the same state as the original transaction
2. within a 12 month period
3. from insurer to insurer and no cash is received by the policyowner
4. from agent to agent as long as the agents are licensed in the same line -
ANSWER-3. from insurer to insurer and no cash is received by the policyowner
*The Internal Revenue Code (IRC) enables a tax-free Section 1035 Exchange of a
life insurance policy to a different policy if it occurs from insurer to insurer and the
policyowner does not receive any cash.
According to life insurance contract law, insurable interest exists
1.when any business relationship exists
2. at the time of application
3. at the time of death
4. only when determined by a judge - ANSWER-2.at the time of application
*According to life insurance in contract law, a person most likely will have an
insurable interest in insuring a person's life if at the time of application
,An example of replacement is
1.canceling disability policy to buy a term life policy
2. canceling a term life policy to buy a whole life policy
3. canceling a long-term care policy to buy a whole life policy
4. canceling a whole life policy to buy a major medical policy - ANSWER-2.canceling
a term life policy to buy a whole life policy
When must a claim on a life insurance policy be paid after proof of loss has been
received by the insurer?
1. Promptly
2.Within 10 days
3. Within 20 days
4. Within 30 days - ANSWER-1. Promptly
Variable life insurance and Universal life insurance are very similar. Which of these
features are held exclusively by variable universal life insurance?
1. Policyowner may increase or decrease the premium payments
2.Policyowner may increase or decrease the face amount
3.Policyowner can contribute large sums of money
4.Policyowner has the right to select the investment which will provide the greatest
return - ANSWER-4.Policyowner has the right to select the investment which will
provide the greatest return
Which of these is affected by the frequency of an insurance policy's premium
payments?
1.Settlement options
2.Cash value
3.Death benefit
4. Cost - ANSWER-4. Cost
Which type of life insurance is normally associated with a Payor Benefit rider?
1.Juvenile insurance
2.Family income insurance
3. Spouse insurance
4. Term rider - ANSWER-1. Juvenile insurance
*A Payor Benefit rider waives the premium ONLY in connection with juvenile
, insurance.
Under a group life policy, the insurer will issue an individual _____ to the
policyowner for delivery to each person insured.
1.policy
2. certificate
3. application
4. rider - ANSWER-2. certificate
Term insurance is appropriate for someone who
1.seeks living benefits for themselves
2.seeks a policy that builds cash value
3. seeks temporary protection and lower premiums
4.seeks permanent protection and higher premiums - ANSWER-3. seeks temporary
protection and lower premiums
Which type of life insurance offers flexible premiums, a flexible death benefit, and
the choice of how the cash value will be invested?
1. Adjustable life policy
2.Variable universal policy
3. Universal policy
4. Modified whole life policy - ANSWER-2.Variable universal policy
*A variable universal life policy has three key elements- flexible premium, death
benefit, and the choice of how the cash value will be invested.
A person who, for a fee, gives advice or recommendations on benefits provided by
an insurance contract is called
1.a broker
2.a producer
3.an advisor
4.a navigator - ANSWER-3.an advisor
*An insurance adviser is any person who, for a fee, offers to examine any policy for
the purpose of giving advice or recommendations with respect to the benefits
provided by the contract. An adviser must be licensed in the State of Maryland.
If an insured's age on a life insurance policy has been misstated, what is the
insurer's liability if the insured dies?
and Answers
All of the following actions are considered rebating EXCEPT
1. sharing commissions with other licensed and appointed agents
2.refunding part of the premium as an inducement for purchase
3.offering special dividends
4. offering anything of value not specified in the policy - ANSWER-1. sharing
commissions with other licensed and appointed agents
Peter has a policy where 80% to 90% of the premium is invested in traditional fixed
income securities and the remainder of the premium is invested in contracts tied to
a stipulated stock index. What kind of policy is this?
1. Modified Endowment Contract
2. Current assumptive whole life
3.Credit life insurance
4. Equity index whole life - ANSWER-4."Equity index whole life". The type of policy
where 80% to 90% of the premium is invested in traditional fixed income securities
and the remainder of the premium is invested in contracts tied to a stipulated stock
index is equity index whole life.
A tax-free Section 1035 Exchange of a life insurance policy to a different policy is
permitted if it occurs
1. in the same state as the original transaction
2. within a 12 month period
3. from insurer to insurer and no cash is received by the policyowner
4. from agent to agent as long as the agents are licensed in the same line -
ANSWER-3. from insurer to insurer and no cash is received by the policyowner
*The Internal Revenue Code (IRC) enables a tax-free Section 1035 Exchange of a
life insurance policy to a different policy if it occurs from insurer to insurer and the
policyowner does not receive any cash.
According to life insurance contract law, insurable interest exists
1.when any business relationship exists
2. at the time of application
3. at the time of death
4. only when determined by a judge - ANSWER-2.at the time of application
*According to life insurance in contract law, a person most likely will have an
insurable interest in insuring a person's life if at the time of application
,An example of replacement is
1.canceling disability policy to buy a term life policy
2. canceling a term life policy to buy a whole life policy
3. canceling a long-term care policy to buy a whole life policy
4. canceling a whole life policy to buy a major medical policy - ANSWER-2.canceling
a term life policy to buy a whole life policy
When must a claim on a life insurance policy be paid after proof of loss has been
received by the insurer?
1. Promptly
2.Within 10 days
3. Within 20 days
4. Within 30 days - ANSWER-1. Promptly
Variable life insurance and Universal life insurance are very similar. Which of these
features are held exclusively by variable universal life insurance?
1. Policyowner may increase or decrease the premium payments
2.Policyowner may increase or decrease the face amount
3.Policyowner can contribute large sums of money
4.Policyowner has the right to select the investment which will provide the greatest
return - ANSWER-4.Policyowner has the right to select the investment which will
provide the greatest return
Which of these is affected by the frequency of an insurance policy's premium
payments?
1.Settlement options
2.Cash value
3.Death benefit
4. Cost - ANSWER-4. Cost
Which type of life insurance is normally associated with a Payor Benefit rider?
1.Juvenile insurance
2.Family income insurance
3. Spouse insurance
4. Term rider - ANSWER-1. Juvenile insurance
*A Payor Benefit rider waives the premium ONLY in connection with juvenile
, insurance.
Under a group life policy, the insurer will issue an individual _____ to the
policyowner for delivery to each person insured.
1.policy
2. certificate
3. application
4. rider - ANSWER-2. certificate
Term insurance is appropriate for someone who
1.seeks living benefits for themselves
2.seeks a policy that builds cash value
3. seeks temporary protection and lower premiums
4.seeks permanent protection and higher premiums - ANSWER-3. seeks temporary
protection and lower premiums
Which type of life insurance offers flexible premiums, a flexible death benefit, and
the choice of how the cash value will be invested?
1. Adjustable life policy
2.Variable universal policy
3. Universal policy
4. Modified whole life policy - ANSWER-2.Variable universal policy
*A variable universal life policy has three key elements- flexible premium, death
benefit, and the choice of how the cash value will be invested.
A person who, for a fee, gives advice or recommendations on benefits provided by
an insurance contract is called
1.a broker
2.a producer
3.an advisor
4.a navigator - ANSWER-3.an advisor
*An insurance adviser is any person who, for a fee, offers to examine any policy for
the purpose of giving advice or recommendations with respect to the benefits
provided by the contract. An adviser must be licensed in the State of Maryland.
If an insured's age on a life insurance policy has been misstated, what is the
insurer's liability if the insured dies?
