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Life Insurance > Sos > Flashcards

Sos Flashcards

1
Q

What are reasons the Maryland Insurance Administration may suspend an agent’s license?

A

a) Engaging in fraudulent or dishonest practices
b) Mishandling premium payments
c) Sharing commissions with agents holding the same license type
d) Violating a regulation or order of the Maryland Insurance Administration

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2
Q

What is a requirement of an insurable risk?

A

c) The chance of loss must be calculable
d) There must be a large number of different loss exposures

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3
Q

Which of the following could be considered unfair trade practices EXCEPT?

A

a) Selling insurance at cheaper rates than competitors

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4
Q

When are life insurance policy dividends normally subject to federal income tax?

A

b) When the total of dividends received exceeds the total of premiums paid

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5
Q

What happens when the insured’s willful failure to disclose a material fact is discovered shortly after the policy is issued?

A

d) The policy is voidable at the insurer’s option

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6
Q

Who must provide written consent to the viatication?

A

The insured and beneficiary, the viator and beneficiary, the insured and viator, or the beneficiary, insured and viator.

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7
Q

Who has the power to examine an insurer’s books and records to determine unfair trade practices?

A

The Maryland Insurance Administration, the National Association of Insurance Commissioners, the Federal Deposit Insurance Corporation, or the Maryland Property & Casualty Insurance Guaranty Corporation (PCIGC).

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8
Q

How often must insurance licensees subject to continuing education meet the educational requirements?

A

Each year, every two years, every three years, or there is no requirement.

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9
Q

Which of the following is NOT considered an unfair trade practice?

A

Sharing commissions with agents who have equivalent licenses.

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10
Q

What must an insurance producer who conducts business under an assumed or fictitious name do?

A

File the name with the Insurance Administration, apply for an additional license, apply for an additional appointment, or post a $10,000 bond.

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11
Q

In Maryland, insurance companies must charge the same rate for life insurance for individuals of what criteria?

A

Individuals of the same class and equal life expectancy.

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12
Q

How often is a policy given?

A

a) Every year
b) Every two years
c) Every three years
d) Every five years

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13
Q

What is a premium receipt that may provide immediate protection called?

A

a) An approval receipt
b) A conditional receipt
c) A binding receipt
d) An application receipt

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14
Q

When does coverage under a life insurance policy normally begin if the initial premium is not paid with the application?

A

a) At 12:01 a.m. on the first day of the month
b) When the application is completed and signed
c) When the producer delivers the policy to the insured and collects the required premium
d) One week following submission of the inspection report

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15
Q

What is the unfair trade practice known as when splitting the commission with the buyer on a sale of insurance?

A

a) Twisting
b) Binding
c) Soliciting
d) Rebating

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16
Q

Which table shows the rate of death by age for given groups of people?

A

a) Mortality table
b) Morbidity table
c) Premium rate table
d) Dividend table

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17
Q

Under a joint and survivor annuity, when do benefit payments normally continue?

A

a) Until the death of both annuitants
b) Until the death of one annuitant
c) Until the death of all beneficiaries
d) Until the death of one beneficiary

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18
Q

How many hours of continuing education are required each biennium for a producer who holds more than one major line of authority?

A

16 hours

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19
Q

What is the MAXIMUM amount of protection provided by the Maryland Life & Health Insurance Guaranty Corporation should an insurance company become financially unable to meet its obligations to the policyholder?

A

$100,000 in cash surrender or withdrawal values

This includes $150,000 in death benefits and $200,000 in death benefits.

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20
Q

Which financial services product creates an instant estate, regardless of when death occurs?

A

Life Insurance

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21
Q

All of the following normally indicate the presence of insurable interest in the life of another person EXCEPT?

A

Maintaining a lasting friendship with the other person

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22
Q

A universal life insurance policy can be described most accurately as a combination of?

A

A flexible premium deposit fund and a monthly renewable term insurance policy

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23
Q

If a producer misleads or fails to adequately disclose the title and true nature of a policy offered to a potential insured, it may be considered?

A

Misrepresentation

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24
Q

How many lives are normally insured by a survivorship life insurance policy?

A

Two

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25
What is an attending physician statement (APS) used for in life insurance underwriting?
Information provided by a physician on the applicant's medical history
26
Which of the following is NOT a reason for a business organization to purchase key person life insurance?
The increased pension liability resulting from the key person's death
27
When the business of insurance is no longer conducted under an assumed name, whom must a producer notify?
The Maryland Insurance Administration
28
Which annuity promises to make a specific number of benefit payments regardless of when the annuitant dies?
A fixed period annuity certain
29
What is publishing a derogatory article about the financial condition of an insurer, which is false and calculated to injure the insurer, an example of?
Defamation
30
What is the needs approach® in life insurance most useful for?
Determining the amount of life insurance to be recommended to a client.
31
What is the arrangement called when the owner of a life insurance policy reserves the right to change the beneficiary?
A revocable designation.
32
Why might someone name a trust rather than an individual as the beneficiary of a life insurance policy?
To provide management of the proceeds.
33
What is the tax status of interest credited to the cash values of personally owned non-qualified annuities?
Deferred.
34
What is the purpose of the Life and Health Insurance Guaranty Corporation?
To guarantee benefits if the insurer is unable to pay benefits due to impairment or insolvency.
35
Based on the law of large numbers, what happens if the number of similar insured units increases?
Predictability of losses improves.
36
Who is the head of the Maryland Insurance Administration?
Commissioner.
37
What happens to a producer who misrepresents a life insurance product in Maryland?
Has committed an illegal act.
38
What is the purpose of licensing insurance agents?
Demonstrate that the agent is qualified to act on behalf of insurers in Maryland.
39
What is unlawful for a person to provide in an advertisement?
Uses a policy title to misrepresent a coverage.
40
Which life insurance settlement option provides the highest monthly income guaranteed for the lifetime of the beneficiary?
Life income only.
41
What is the MAXIMUM amount of life insurance coverage an individual can purchase for a dependent without completing an Evidence of Insurability (EO) in Maryland?
$50,000.
42
What may a policy of individual life insurance include?
a) a rebate. b) a free policy for the insured's spouse c) hospital care benefits d) long-term care benefits
43
What is false advertising of an insurance policy an example of?
Misrepresentation ## Footnote Options include: a) Defamation, c) Coercion, d) Boycott
44
What is the tax status of a $10,001 withdrawal from a non-qualified single-premium deferred annuity after its cash value grew to $535,000?
Entirely taxable as ordinary income ## Footnote The individual paid $20,000 in 1980.
45
What is true about an immediate annuity?
c) Lacks an accumulation period ## Footnote Options include: a) May be purchased in installments, b) Pays a lump sum benefit to the annuitant, d) Normally permits tax-deductible contributions
46
An immediate annuity may be appropriate for all of the following EXCEPT?
a) The beneficiary of proceeds under a life insurance policy ## Footnote Options include: b) A parent saving for a child's education, c) A casualty insurer required to pay a large liability claim, d) A retired individual who inherits a large sum
47
What must a licensee report to the Maryland Insurance Administration EXCEPT?
c) Change in financial status ## Footnote Options include: a) Change of name, b) Change of residence address, d) Felony convictions
48
Which life insurance policy does NOT have policy loan provisions?
Five year term life
49
What is NOT required for a valid contract?
Written evidence
50
Which cause of death is EXCLUDED from coverage under an accidental death rider?
Injuries that are intentionally self-inflicted by the insured
51
Which annuity pays income benefits of $200 per month for the annuitant's lifetime?
A fixed life annuity with installment refund
52
What are Keogh plans also known as?
HR 10 plans
53
What is twisting in insurance?
Persuading an insured, to the insured's detriment, to switch policies
54
Which statement about the extended term insurance nonforfeiture option in a life insurance policy is true?
The cash value is used as a premium to purchase the coverage.
55
What is a life insurance producer normally responsible for, EXCEPT?
Approving policies for issue on behalf of the insurer.
56
Which statement about the income continuation option in a life insurance policy is true, EXCEPT?
Proceeds provide an income for the beneficiary's lifetime.
57
All of the following are exclusions or restrictions sometimes found in life insurance policies EXCEPT?
Accidental death.
58
What is the unfair trade practice known as when giving policyholders some part of the agent's commission as an inducement to purchase insurance?
Rebating.
59
What should an investor buy for maximum income for life and temporary income for a surviving spouse if the investor dies first?
A joint and survivor annuity with ten years certain.
60
During the first two years a life insurance policy is in force, the insurer may contest a policy for all of the following reasons EXCEPT?
Material concealment in the purchase of the policy.
61
Which is true about a universal life insurance policy?
The premium is flexible for the duration of the policy.
62
A definite and unqualified proposal of contract formed by one party to another is?
An offer.
63
Which one of the following statements about a decreasing term life insurance policy is true?
The face amount of the policy decreases throughout the policy period.
64
An insurance agent's license may be revoked for all of the following reasons EXCEPT?
Having no insurer appointment in effect for ten days.
65
Which is true about ownership of a deferred annuity contract?
An owner may be the annuitant or the beneficiary or neither.
66
What is the neede approach® in life insurance useful for?
Determining which types of individuals the producer should attempt to meet, the amount of life insurance to recommend, which companies offer the best products, and the most appropriate method for prospecting new clients.
67
What is it called when the owner of a life insurance policy reserves the right to change the beneficiary?
A revocable designation.
68
Why might a trust be named as the beneficiary of a life insurance policy?
To provide management of the proceeds and avoid probate.
69
What is the tax status of interest credited to the cash values of personally owned non-qualified annuities?
Deferred.
70
What is the purpose of the Life and Health Insurance Guaranty Corporation?
To guarantee benefits if the insurer is unable to pay benefits due to impairment or insolvency.
71
Based on the law of large numbers, what happens if the number of similar insured units increases?
Predictability of losses improves.

Life Insurance (1 decks)

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