Maryland Life Insurance Producer Final Exam
Questions with Verified Answers
Guarantee Passing score: 85% or higher
Consist of 90 multiple choices Questions and Answers
1. What kind of life insurance policy allows a policyowner the choice of invest-
ments along with flexible premium payments?
A. Variable universal life
B. Modified endowment contract
C. Adjustable life
D. Graded premium whole life
Answer> A. Variable universal life
2. All of these statements concerning universal life insurance are false EX-
CEPT
A. Death benefits are normally taxable
B. Policy loans are not permitted
C. Premiums or face amount cannot be1 /changed
32
D. Policy indicates how much of the premium is used toward company expens- es
Answer> D. Policy indicates how much of the premium is used toward company
,A. Survivorship life policy is lower
B. Survivorship life policy is higher
C. Depends on the investment performance of the underlying accounts
D. Both have the same actuarial costs
Answer> A. Survivorship life policy is lower
4. Which statement regarding universal life insurance is correct?
A. Cash value accumulations have a guaranteed minimum interest rate
B. Policyowner can change the face amount but not the premium
C. Policyowner can change the premium but not the face amount
D. Partial withdrawals cannot be made from the policy's cash value
Answer> A. Cash value accumulations have a guaranteed minimum interest rate
5. Which statement regarding whole life insurance is accurate?
A. Cash value loans are not permitted
B. Insurance coverage can continue for life
C. Policy normally matures at retirement
D. No cash value accumulations
Answer> B. Insurance coverage can continue for life
6. How does a continuous premium whole life policy differ from a limited pay
whole life policy?
A. The time period in which premiums will be paid
B. The availability of cash value loans
C. The availability of nonforfeiture options
D. The settlement options
,A. Level premiums
B. Flexible premiums
C. Modified premiums
D. Decreasing premiums
Answer> A. Level premiums
8. Taxable income may be the result from all of these modified endowment
contract (MEC) transactions EXCEPT for
A. A cash value loan is taken out
B. Automatic premium loan provision is utilized
C. The policy is surrendered for less than what was paid into it
D. Dividend is issued
Answer> C. The policy is surrendered for less than what was paid into it
9. All of these are considered features of whole life insurance EXCEPT
A. Cash value accumulation
B. Permanent coverage
C. Initial premium is lower than for an equivalent amount of term insurance
D. Policy loans are allowed
Answer> C. Initial premium is lower than for an equivalent amount of term
insurance
10. Which of these policies is considered a whole life policy?
A. Credit life
B. Single premium life
, the face amount upon the death of the first insured?
A. Joint and survivorship
B. Survivorship life
C. Universal life
D. Joint life
Answer> D. Joint life
12. Rick owns a variable universal life policy and chooses a variable death
benefit option. What will typically happen to the death benefit as a result of this
selection?
A. Remain the same
B. Decrease but never increase
C. Increase but never decrease
D. Fluctuate with changes in the cash account
Answer> D. Fluctuate with changes in the cash account
13. An individual who purchases a modified life insurance policy expects
A. a higher rate of return
B. coverage for two people
C. an improvement in future income
D. a flexible face amount
Answer> C. an improvement in future income
14. Assets that back the non-guaranteed values of variable life insurance
products are held in which account?
Questions with Verified Answers
Guarantee Passing score: 85% or higher
Consist of 90 multiple choices Questions and Answers
1. What kind of life insurance policy allows a policyowner the choice of invest-
ments along with flexible premium payments?
A. Variable universal life
B. Modified endowment contract
C. Adjustable life
D. Graded premium whole life
Answer> A. Variable universal life
2. All of these statements concerning universal life insurance are false EX-
CEPT
A. Death benefits are normally taxable
B. Policy loans are not permitted
C. Premiums or face amount cannot be1 /changed
32
D. Policy indicates how much of the premium is used toward company expens- es
Answer> D. Policy indicates how much of the premium is used toward company
,A. Survivorship life policy is lower
B. Survivorship life policy is higher
C. Depends on the investment performance of the underlying accounts
D. Both have the same actuarial costs
Answer> A. Survivorship life policy is lower
4. Which statement regarding universal life insurance is correct?
A. Cash value accumulations have a guaranteed minimum interest rate
B. Policyowner can change the face amount but not the premium
C. Policyowner can change the premium but not the face amount
D. Partial withdrawals cannot be made from the policy's cash value
Answer> A. Cash value accumulations have a guaranteed minimum interest rate
5. Which statement regarding whole life insurance is accurate?
A. Cash value loans are not permitted
B. Insurance coverage can continue for life
C. Policy normally matures at retirement
D. No cash value accumulations
Answer> B. Insurance coverage can continue for life
6. How does a continuous premium whole life policy differ from a limited pay
whole life policy?
A. The time period in which premiums will be paid
B. The availability of cash value loans
C. The availability of nonforfeiture options
D. The settlement options
,A. Level premiums
B. Flexible premiums
C. Modified premiums
D. Decreasing premiums
Answer> A. Level premiums
8. Taxable income may be the result from all of these modified endowment
contract (MEC) transactions EXCEPT for
A. A cash value loan is taken out
B. Automatic premium loan provision is utilized
C. The policy is surrendered for less than what was paid into it
D. Dividend is issued
Answer> C. The policy is surrendered for less than what was paid into it
9. All of these are considered features of whole life insurance EXCEPT
A. Cash value accumulation
B. Permanent coverage
C. Initial premium is lower than for an equivalent amount of term insurance
D. Policy loans are allowed
Answer> C. Initial premium is lower than for an equivalent amount of term
insurance
10. Which of these policies is considered a whole life policy?
A. Credit life
B. Single premium life
, the face amount upon the death of the first insured?
A. Joint and survivorship
B. Survivorship life
C. Universal life
D. Joint life
Answer> D. Joint life
12. Rick owns a variable universal life policy and chooses a variable death
benefit option. What will typically happen to the death benefit as a result of this
selection?
A. Remain the same
B. Decrease but never increase
C. Increase but never decrease
D. Fluctuate with changes in the cash account
Answer> D. Fluctuate with changes in the cash account
13. An individual who purchases a modified life insurance policy expects
A. a higher rate of return
B. coverage for two people
C. an improvement in future income
D. a flexible face amount
Answer> C. an improvement in future income
14. Assets that back the non-guaranteed values of variable life insurance
products are held in which account?
