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Maryland Insurance Administration Maryland Life Producer Exam (Series 20-27) Sample Questions (Q72-Q77):
NEW QUESTION # 72
If a life insurer denies a policy of life insurance, the insurer shall disclose the results of any medicalexamination administered to determine insurability to the:
Answer: B
Explanation:
Comprehensive and Detailed Step by Step Explanation:Maryland law requires that the results of medical examinations used to determine insurability:
* Be disclosed to thephysician of the applicant's choice (B), but only if the applicant requests it.
* This ensures privacy and confidentiality while giving the applicant access to critical information.
* Beneficiaries (A)andunderwriters (C)do not receive this information.
* Physicians furnishing information (D)already have access to their own submissions.
References: Maryland Insurance Code on Privacy and Disclosure of Medical Information.
NEW QUESTION # 73
In surrendering a life insurance contract for its cash value, the total of premiums paid less the total of any dividends received in cash or used to offset premiums is:
Answer: B
Explanation:
Comprehensive and Detailed Step by Step Explanation:Thecost basisis the total of all premiums paid minus dividends received or used to offset premiums. This figure is used to calculate the taxable portion of the cash value upon surrender.
* Cost basis (D):Represents the non-taxable portion of the surrender value; any amount exceeding this is considered taxable income.
* Cash value (A):The policy's accumulated value, which may include taxable gains.
* Loan value (B):Refers to the amount available for borrowing against the policy.
* Gross proceeds (C):The full amount received upon surrender, not accounting for cost basis deductions.
References:IRS Guidance on Life Insurance Taxation, Maryland Life Insurance Surrender Rules, and COMAR 31.09.14.
NEW QUESTION # 74
An insurable interest in each other's lives may exist in the absence of an economic interest when the individuals are:
Answer: C
Explanation:
Comprehensive and Detailed Step by Step Explanation:
For life insurance, an insurable interest exists when there is a legitimate interest in the continued life of another person:
Marriage partners (C) inherently have insurable interest due to emotional and legal ties.
Competitors (A) and traveling companions (D) do not usually meet the legal threshold.
Business associates (B) may have insurable interest, but only in specific agreements (e.g., buy-sell agreements).
References: Maryland Insurance Code and Insurable Interest Provisions.
NEW QUESTION # 75
How many days does a former employee have to convert a group term policy to an individual policy after employment is terminated?
Answer: D
Explanation:
Comprehensive and Detailed Step by Step Explanation:Under Maryland insurance law, a terminated employee has31 days (D)to convert a group term life insurance policy into an individual policy without providing evidence of insurability.
* This grace period allows individuals to maintain coverage while securing individual insurance.
* 10 (A), 20 (B), or 30 days (C)are incorrect, as Maryland mandates a specific 31-day window.
References: Maryland Conversion Rights in Group Life Insurance Policies, Section 15-401 of the Insurance Article.
NEW QUESTION # 76
The penalty tax incurred for premature distributions from an IRA is:
Answer: D
Explanation:
Comprehensive and Detailed Step by Step Explanation:Premature distributions from an IRA (withdrawals before age 59½) are subject to a10% penalty tax (B)unless certain exceptions apply (e.g., disability, qualified education expenses, or first-time homebuyer withdrawals).
* 5% (A):Does not apply to IRS penalties.
* 10% (B):Correct. This is the standard penalty for early withdrawals.
* 20% (C):Represents mandatory withholding for certain distributions, not the penalty.
* 50% (D):Applies only to Required Minimum Distribution (RMD) failures, not premature distributions.
References:IRS Publication 590-B, Maryland IRA Penalty Exceptions Guidelines, COMAR 31.09.11.
NEW QUESTION # 77
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