Maryland Life Insurance UPDATED Study
Guide QUESTIONS AND CORRECT
ANSWERS
Which of these statements is NOT true regarding a cash value loan against a life
insurance policy? - CORRECT ANSWERS Interest payments made by
policy owner are deductible
An applicant submits a life insurance application where an investigative
consumer report is used in the underwriting process.
Which of these statements is true? - CORRECT ANSWERS Applicant
has a right to receive a copy of the report
What is considered the collateral on a life insurance policy loan? - CORRECT
ANSWERS The policy's cash value
How many days notice must a producer be given prior to a scheduled hearing? -
CORRECT ANSWERS 10 Days
The Medical Information Bureau consist of members from which group? -
CORRECT ANSWERS insurance companies
Insurance crimes which affect interstate commerce are prosecuted - CORRECT
ANSWERS US Attorney General
How long can an insurer legally defer paying the cash value of a surrendered
life insurance policy? - CORRECT ANSWERS 4 Months
When an individual is planning to protect his family with life insurance, one
method of doing so is called needs analysis. What exactly does needs analysis
,involve? - CORRECT ANSWERS Identifies the needs of an individual
and the individual's dependents
Which statement is INCORRECT concerning a tax-sheltered annuity (TSA)? -
CORRECT ANSWERS Annual investment gains are included in
participant's gross income
Which of the following is NOT a valid reason for revoking a Maryland
producer's license? - CORRECT ANSWERS Having no insurance
appointment in effect for 10 days
Why do insurers require a minimum number of employees participate in a group
insurance plan? - CORRECT ANSWERS Minimize adverse selection
How long does one premium payment cover in a single premium whole life
policy? - CORRECT ANSWERS Full life of the policy
Which tax would an IRA participant be subjected to on distributions received
prior to age 59 1/2? - CORRECT ANSWERS Income tax and penalty tax
An insurable risk requires - CORRECT ANSWERS that the chance of
loss be calculable
Insurable interest in one's own life is legally considered as - CORRECT
ANSWERS generally unlimited
Which of these is NOT an Unfair Claims Settlement Practice? - CORRECT
ANSWERS Refusing to pay persons bringing false or fraudulent claims
, Dividends from a mutual insurance company are paid to whom? - CORRECT
ANSWERS Policyholders
How long must a life insurance policy be in effect before the policyowner may
use the nonforfeiture provision? - CORRECT ANSWERS 3 years
Which statement regarding a fixed period settlement option is correct? -
CORRECT ANSWERS The installment payment amount is determined
by the total number of installments
Interest on death benefits are NOT required to be paid by an insurance company
as long as proceeds are paid within _____ after the date of the death of the
insured. - CORRECT ANSWERS 30 days
A life annuity with period certain is characterized as - CORRECT ANSWERS
guaranteeing benefit payments for a stated minimum number of years
When does interest income for a flexible premium deferred annuity get reported
for federal income taxes? - CORRECT ANSWERS Upon receiving
distributions from the contract
ERISA requires that a Summary Plan Description must be provided to a new
plan member within how many days following the new member's eligibility
date? - CORRECT ANSWERS 90
Which life insurance clause prohibits an insurance company from questioning
the validity of the contract after a stated period of time has passed? - CORRECT
ANSWERS Incontestable clause
Guide QUESTIONS AND CORRECT
ANSWERS
Which of these statements is NOT true regarding a cash value loan against a life
insurance policy? - CORRECT ANSWERS Interest payments made by
policy owner are deductible
An applicant submits a life insurance application where an investigative
consumer report is used in the underwriting process.
Which of these statements is true? - CORRECT ANSWERS Applicant
has a right to receive a copy of the report
What is considered the collateral on a life insurance policy loan? - CORRECT
ANSWERS The policy's cash value
How many days notice must a producer be given prior to a scheduled hearing? -
CORRECT ANSWERS 10 Days
The Medical Information Bureau consist of members from which group? -
CORRECT ANSWERS insurance companies
Insurance crimes which affect interstate commerce are prosecuted - CORRECT
ANSWERS US Attorney General
How long can an insurer legally defer paying the cash value of a surrendered
life insurance policy? - CORRECT ANSWERS 4 Months
When an individual is planning to protect his family with life insurance, one
method of doing so is called needs analysis. What exactly does needs analysis
,involve? - CORRECT ANSWERS Identifies the needs of an individual
and the individual's dependents
Which statement is INCORRECT concerning a tax-sheltered annuity (TSA)? -
CORRECT ANSWERS Annual investment gains are included in
participant's gross income
Which of the following is NOT a valid reason for revoking a Maryland
producer's license? - CORRECT ANSWERS Having no insurance
appointment in effect for 10 days
Why do insurers require a minimum number of employees participate in a group
insurance plan? - CORRECT ANSWERS Minimize adverse selection
How long does one premium payment cover in a single premium whole life
policy? - CORRECT ANSWERS Full life of the policy
Which tax would an IRA participant be subjected to on distributions received
prior to age 59 1/2? - CORRECT ANSWERS Income tax and penalty tax
An insurable risk requires - CORRECT ANSWERS that the chance of
loss be calculable
Insurable interest in one's own life is legally considered as - CORRECT
ANSWERS generally unlimited
Which of these is NOT an Unfair Claims Settlement Practice? - CORRECT
ANSWERS Refusing to pay persons bringing false or fraudulent claims
, Dividends from a mutual insurance company are paid to whom? - CORRECT
ANSWERS Policyholders
How long must a life insurance policy be in effect before the policyowner may
use the nonforfeiture provision? - CORRECT ANSWERS 3 years
Which statement regarding a fixed period settlement option is correct? -
CORRECT ANSWERS The installment payment amount is determined
by the total number of installments
Interest on death benefits are NOT required to be paid by an insurance company
as long as proceeds are paid within _____ after the date of the death of the
insured. - CORRECT ANSWERS 30 days
A life annuity with period certain is characterized as - CORRECT ANSWERS
guaranteeing benefit payments for a stated minimum number of years
When does interest income for a flexible premium deferred annuity get reported
for federal income taxes? - CORRECT ANSWERS Upon receiving
distributions from the contract
ERISA requires that a Summary Plan Description must be provided to a new
plan member within how many days following the new member's eligibility
date? - CORRECT ANSWERS 90
Which life insurance clause prohibits an insurance company from questioning
the validity of the contract after a stated period of time has passed? - CORRECT
ANSWERS Incontestable clause
