Maryland Life Producer Exam (Series 20-27) (Life-Producer) Free Practice Test

Question 1

A transaction in which a new life insurance policy is purchased, and an existing life insurance policy is surrendered is called:

A. Reinvestment

B. Rollover

C. Nonforfeiture

D. Replacement

Correct Answer: D

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Question 2

Publishing a derogatory article about the financial condition of an insurer that is false and calculated to injure the insurer is an example of:

A. Coercion

B. Defamation

C. Extortion

D. Intimidation

Correct Answer: B

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Question 3

A policyholder uses a Section 1035 exchange to replace an existing life insurance policy. If the new policy is later surrendered, the gain realized on termination is taxed as:

A. A capital gain

B. Ordinary income

C. A deferred capital gain

D. Ordinary income plus a 10% surcharge

Correct Answer: B

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Question 4

How does the payment of an accelerated benefit affect a life insurance policy?

A. It increases the policy premium.

B. It decreases the grace period.

C. It decreases the death benefit.

D. It increases the cash value.

Correct Answer: C

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Question 5

A life insurance producer is normally responsible for all of the following EXCEPT:

A. Delivering newly issued policies to applicants

B. Notifying the company if a new policy will replace an existing policy

C. Collecting the initial premium from the applicant

D. Approving policies for issue on behalf of the insurer

Correct Answer: D

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Question 6

Which activity is an unfair claims settlement practice?

A. Offering settlements that are less than the fair value to offset insurer expenses

B. Negotiating the payment of claims where coverage or liability is in question

C. Including an arbitration provision in the insurer's policies

D. Denying claims on the basis of specific policy provisions

Correct Answer: A

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Question 7

The Medical Information Bureau may release information in the proposed insured's file to:

A. Member insurance companies

B. The insured's employer

C. Any physician

D. Employment agencies

Correct Answer: A

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Question 8

If an insurer knowingly fails to enforce a policy provision on one occasion, the insurer may be prevented from enforcing it on a subsequent occasion by the principle of:

A. Adhesion

B. Waiver

C. Estoppel

D. Subrogation

Correct Answer: C

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Question 9

A policy of life insurance may NOT be delivered unless the policy has a:

A. Premium coupon book

B. Notary seal

C. Legible and brief description of the policy on the first page

D. Financial statement of the life insurance company

Correct Answer: C

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Maryland Insurance Administration Maryland Life Producer Exam (Series 20-27) (Life-Producer) Free Practice Test