Maryland Life Insurance Producer Final Exam

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Maryland Life Insurance Producer Final Exam Questions with Verified Answers

Guarantee Passing score: 85% or higher

Consist of 90 multiple choices Questions and Answers

• What kind of life insurance policy allows a policyowner the choice of invest-

ments along with flexible premium payments?

• Variable universal life
• Modified endowment contract
• Adjustable life
• Graded premium whole life

Answer> A. Variable universal life

• All of these statements concerning universal life insurance are false EX-

CEPT

• Death benefits are normally taxable
• Policy loans are not permitted
• Premiums or face amount cannot be changed
• 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 expenses

• How does the cost for a survivorship life policy compare to the cost of

combining two separate life insurance policies?

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• Survivorship life policy is lower
• Survivorship life policy is higher
• Depends on the investment performance of the underlying accounts
• Both have the same actuarial costs

Answer> A. Survivorship life policy is lower

• Which statement regarding universal life insurance is correct?

• Cash value accumulations have a guaranteed minimum interest rate
• Policyowner can change the face amount but not the premium
• Policyowner can change the premium but not the face amount
• Partial withdrawals cannot be made from the policy's cash value

Answer> A. Cash value accumulations have a guaranteed minimum interest rate

• Which statement regarding whole life insurance is accurate?

• Cash value loans are not permitted
• Insurance coverage can continue for life
• Policy normally matures at retirement
• No cash value accumulations

Answer> B. Insurance coverage can continue for life

• How does a continuous premium whole life policy differ from a limited pay

whole life policy?

• The time period in which premiums will be paid
• The availability of cash value loans
• The availability of nonforfeiture options
• The settlement options

Answer> A. The time period in which premiums will be paid

• What type of premiums are associated with individual mortgage protection

life insurance policies?

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• Level premiums
• Flexible premiums
• Modified premiums
• Decreasing premiums

Answer> A. Level premiums

• Taxable income may be the result from all of these modified endowment

contract (MEC) transactions EXCEPT for

• A cash value loan is taken out
• Automatic premium loan provision is utilized
• The policy is surrendered for less than what was paid into it
• Dividend is issued

Answer> C. The policy is surrendered for less than what was paid into it

• All of these are considered features of whole life insurance EXCEPT

• Cash value accumulation
• Permanent coverage
• Initial premium is lower than for an equivalent amount of term insurance
• Policy loans are allowed

Answer> C. Initial premium is lower than for an equivalent amount of term insurance

• Which of these policies is considered a whole life policy?

• Credit life
• Single premium life
• Renewable life
• Convertible life

Answer> B. Single premium life

• What type of life insurance policy covers two or more persons and pays 3 / 4

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the face amount upon the death of the first insured?

• Joint and survivorship
• Survivorship life
• Universal life
• Joint life

Answer> D. Joint life

• 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?

• Remain the same
• Decrease but never increase
• Increase but never decrease
• Fluctuate with changes in the cash account

Answer> D. Fluctuate with changes in the cash account

• An individual who purchases a modified life insurance policy expects

• a higher rate of return
• coverage for two people
• an improvement in future income
• a flexible face amount

Answer> C. an improvement in future income

• Assets that back the non-guaranteed values of variable life insurance

products are held in which account?

• Trust account set up by the insured
• Separate account set up by the insurer
• General account of the insurer
• Money market account
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