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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
- A business entity must meet all of the following qualifications EXCEPT (A)Designate a licensed insurance producer to act on their behalf. (B)Be appointed by an insurer. (C)Have a board of directors. (D)Be licensed for the type of insurance the entity will be transacting. Answer> Have a board of directors
- Events or conditions that increase the chances of an insured loss occurring are referred to as (A)Hazards. (B)Perils. (C)Risks. (D)Exposures. Answer> Hazards
- An applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of (A)Breach of warranty. (B)Fraud.
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(C)Waiver. (D)Concealment. Answer> Concealment
- Which of the following is a required provision for Medicare supplement policies? (A)They may not apply pre-existing conditions exclusions. (B)They may contain special exclusions and limitations as compared with Medicare plans. (C)They may not duplicate Medicare benefits. (D)They may not be cancelled for any reason. Answer> They may not duplicate Medicare benefits
- All of the following are requirements of eligibility for Social Security disabil- ity income benefits EXCEPT (A)Waiting period of 5 months. (B)Fully insured status. (C) Inability to perform any gainful work. (D)Being age 65. Answer> Being age 65
- Which of the following factors about the insured determines the amount of disability benefit that the insured will receive? (A)Gender (B)Income (C)Marital status (D)Age Answer> Income
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(B)Acute. (C)Skilled. (D)Intermediate. Answer> Acute
- What type of information is NOT included in a certificate of insurance? (A)The procedures for filing a claim (B)The length of coverage (C)The policy benefits and exclusions (D)The cost the company is paying for monthly premiums Answer> The cost the com- pany is paying for monthly premiums
- Insurance that would pay for hiring a replacement for an important employ- ee who becomes disabled is called (A)Key employee disability insurance. (B)Business overhead expense disability insurance. (C)Blanket disability insurance. (D)Long-term disability. Answer> Key employee disability insurance
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- Under the Affordable Care Act, health insurance cannot be underwritten based on which of the following factors about the applicant? (A)Tobacco use (B)Age (C)Family composition (D)Health condition Answer> Health condition
- The insured's health policy only pays for medical costs related to acci- dents. Which of the following types of policies does the insured have? (A)Accident-only (B)Accidental Death (C)Comprehensive (D)Restrictive Answer> Accident-only
- In Maryland, all of the following are continuing education (CE) require- ments EXCEPT (A)Completion of 3 hours in ethics. (B)Completing CE hours every 2 years. (C)Keeping CE completion records for 4 years. (D)Carrying over excess credit hours to the next reporting period. Answer> Carrying over excess credit hours to the next reporting period
- If an insured changes the premium payment mode from monthly to annu- ally, what happens to the total premium? (A)Doubles (B)Decreases (C)Stays
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(D)Medicare SELECT Answer> Medicare SELECT
- Which of the following CANNOT insurance companies do when creating advertisements for their products issued in this state? (A)Eliminate footnotes (B)Describe terms in simple language (C)Use illustrations (D)Use footnotes as often as needed Answer> Use footnotes as often as needed
- After a client leaves his office, an agent makes corrections to the client's application, but forgets to tell her. Two weeks later, the client is in an accident. The insurer will be settling the claim based on the corrected form. This is (A)Allowed, provided the insurer explains the situation to the client. (B)Legal.The client and the agent should have double checked the application before the client left the office. (C)Allowed if the Commissioner is apprised of the discrepancy. (D)A violation of the Insurance Code. Answer> A violation of the Insurance Code.
- All of the following information about a customer must be used in deter- mining annuity suitability EXCEPT (A)Beneficiary's age. (B)Financial experience. (C)Annual income. (D)Tax status. Answer> Beneficiary's age
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- An IRA purchased by a small employer to cover employees is known as a (A)401(k) plan. (B)Defined contribution plan. (C)Simplified Employee Pension plan. (D)403(b) plan. Answer> Simplified Employee Pension plan
- Under which of the following organizations are the practicing providers compensated on a fee-for-service basis? (A)Blue Cross/Blue Shield (B)Open panel (C)PPO (D)HMO
Answer> PPO
- An insured is involved in an accident that renders him permanently deaf, although he does not sustain any other major injuries. The insured is still able to perform his current job. To what extent will he receive Presumptive Disability benefits? (A)Full benefits for 2 years (B)Partial benefits (C)Full benefits (D)No benefits Answer> Full benefits
- The interest earned on policy dividends is (A)Tax deductible. (B)Taxable. (C)40% taxable, similar to a capital gain.
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(A)The proposed insured. (B)The spouse of the policyowner. (C)The agent. (D)The policyowner. Answer> The spouse of the policyowner
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- The following are all causes for the Insurance Commissioner to suspend or impose conditions upon the continuance of a producer's license EXCEPT (A)Misappropriation or illegal withholding of the policyholder's money. (B)Obtaining a license through fraud. (C)Conviction of a felony involving moral turpitude. (D)The applicant has been shown to be a poor personal credit risk. Answer> The applicant has been shown to be a poor personal credit risk
- Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract? (A)Concealment (B)Indemnity (C)Warranty (D)Representation Answer> Warranty
- Which of the following would describe a legal document which would dictate who can buy a deceased partner's share of a business and for what amount? (A)Split dollar agreement (B)Profit and loss agreement (C)Buy-sell agreement (D)Key person agreement Answer> Buy-sell agreement
- Which of the following features of the Indexed Whole Life policy is NOT fixed? (A)Policy period (B)Cash value growth (C)Premium (D)Death benefit
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- Which of the following statements is TRUE concerning whole life insur- ance? (A)Lump-sum death benefits are not taxable. (B)Policy loans are tax deductible. (C)Premiums are tax deductible. (D)Dividend interest is not taxable. Answer> Lump-sum death benefits are not taxable
- Which of the following is NOT a service providers plan? (A)Blue Cross (B)PPO (C)Medicare (D)HMO Answer> Medicare
- In a noncontributory health insurance plan, what percentage of eligible employees must participate in the plan before the plan can become effective? (A)100% (B)50% (C)25% (D)75% Answer> 100%
- Who makes up the Medical Information Bureau? (A)Hospitals (B)Insurers (C)Physicians and paramedics (D)Former insured Answer> Insurers
- Which renewability provision are you most likely to see on a travel accident policy? (A)Optionally renewable
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(B)Period of time (C)Conditionally renewable (D)Noncancellable Answer> Period of time
- An insured decides to surrender his $100,000 Whole Life policy. The pre- miums paid into the policy added up to $15,000. At policy surrender, the cash surrender value was $18,000. What part of the surrender value would be income taxable? (A)$50, (B)$15, (C)$18, (D)$3, Answer> $3,000 surrender value minus premiums paid
- According to the PPACA metal levels classification, if a health plan is ex- pected to cover 90% of the cost for an average population, and the participants would cover the remaining 10%, what type of plan is that?
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insurance premiums and benefits? (A)Premiums are tax deductible, but benefits are not taxable. (B)Premiums are not tax deductible, and benefits are not taxable. (C)Premiums are tax deductible, and benefits are taxable. (D)Premiums are not tax deductible, but benefits are taxable. Answer> Premiums are not tax deductible, and benefits are not taxable
- The accelerated benefits provision will provide for an early payment of the death benefit when the insured (A)Needs to borrow money. (B)Becomes terminally ill. (C)Becomes disabled. (D)Has earned enough credits. Answer> Becomes terminally ill
- In Maryland, applicants for an insurance producer license must do all of the following EXCEPT (A)File an application with the Commissioner.
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(B)Meet the education and experience requirements. (C)Have a college education. (D)Be found trustworthy and of good character. Answer> Have a college education
- Who would be eligible to obtain SGLI? (A)Small employers (B)The elderly (C)Military personnel (D)Low-income individuals and families Answer> Military personnel
- When is the open enrollment period through Maryland Health Connection? (A)January 1 through March 31 (B)November 1 through January 31 (C)November 1 through March 1 (D)December 1 through December 31 Answer> January 1 through March 31
- How is the Commissioner selected for the office? (A)Public election (B)Appointment by the Department of Insurance (C)Election by authorized insurers (D)Appointment by the Governor Answer> Appointment by the Governor
- An insurance producer has taken 5 more continuing education credit hours than needed for this reporting period. How many of these hours can be transferred to the next reporting period? (A) (B) (C)1 (D)
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(B) Interest-sensitive term. (C)Age-sensitive term. (D)Increasing term. Answer> Increasing term
- Which of the following best describes a misrepresentation? (A)Making a deceptive or untrue statement about a person engaged in the insurance business (B)Making a maliciously critical statement that is intended to injure another person (C) Issuing sales material with exaggerated statements about policy benefits (D)Discriminating among individuals of the same insuring class Answer> Making a deceptive or untrue statement about a person engaged in the insurance business
- Which type of misrepresentation persuades an insured, to their detriment, to cancel, lapse, or switch policies from one to another? (A)False advertising (B)Rebating (C)Switching (D)Twisting Answer> Twisting
- Which of the following statements is NOT true concerning Medicaid? (A)It is a state program. (B) It is funded by state and federal taxes. (C) It consists of 3 parts Answer> Part A Answer> hospitalization, Part B Answer> doctor's services, Part C Answer> disability income.
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(D) It is intended to provide medical assistance for certain categories of people who are needy. Answer> It is a state program
- When an employee is still employed upon reaching age 65 and eligible for Medicare, which of the following is the employee's option? (A)Enroll in Medicare when eligible; otherwise, Medicare benefits will be for- feited. (B)Remain on the group health insurance plan and defer eligibility for Medicare until retirement (C)Enroll in Medicare, while the company must provide additional retirement benefits (D)Wait until the next birthday to enroll Answer> Remain on the group health insurance plan and defer eligibility for Medicare until retirement
- Insurance companies in Maryland must submit forms to the Insurance Commissioner in duplicate. What is the one exception to this rule? (A)If the Commissioner approved a previous version of the form (B)If the forms are filed electronically
