Life Insurance Final Exam
8. How long must a life insurance policy be in effect before the policy owner may use the nonforfeiture provision?
A: 3 years
10. A life insurance replacement gives the policyowner the right to return the policy for a 100% refund within ____ days of policy delivery
A: 30 days
14. The financial records of each domestic company must be inspected every ____ years by the commissioner
A: 5
4. Which of the following is a producer prohibited from doing?
A: Allowing an applicant to sign a blank or incomplete application
11. A ____ company is licensed by the commissioner to conduct insurance business in maryland.
A: Authorized
2. A 55 year old recently received a $30,000 distribution from a previous employers 401k plan, minus $6,000 for income tax withholding. Which federal taxes apply if non of the funds were rolled over.
A: Income taxes plus a 10% penalty tax on $30,000
1. The initial premium for a life insurance policy is typically paid in what way?
A: It is typically obtained by the producer and forwarded to the insurer
12. What is another term used for a "pure" life annuity?
A: Life income
7. An insured is entitled to coverage under a policy that a prudent person would expect it to provide. This principle is called
A: Reasonable expectations
13. Which of the following is NOT a valid reason for a producers license to be provoked?
A: Sharing commissions with a licensed agent
9. A producer has indicated to a potential client that the proposed life insurance policy is covered by the Maryland Life and Health Insurance Guaranty corporation. This action taken by the producer is.
A; Prohibited by law
6. Contributions made by an employee to a qualified retirement plan are required to be
A: Subject to a vesting schedule
3. What happens when a policy owner borrows against the cash value of his life insurance policy?
A: The policy proceeds would be reduced by the outstanding loan balance
5. A terminally ill policy owner decides to sell his life insurance policy at a discount to help support his family. This sale is called a
A: Viatical settlement
15. Which statement regarding an adjustable life insurance policy is NOT true?
A; Policy loans are not permitted
