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Free Insurance Licensing Life-Producer Practice Exam with Questions & Answers

Questions 1

In the event of a death claim under a life insurance policy, what happens to the amount of any existing policy loan?

Options:
A.

It is deducted from the face amount of the policy together with any interest due.

B.

The beneficiary has an obligation to pay the amount to the insurance company.

C.

It represents a primary claim against the estate of the insured.

D.

It is canceled, and the beneficiary receives the face amount of the policy.

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Questions 2

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

Options:
A.

Nonforfeiture

B.

Replacement

C.

Reinvestment

D.

Rollover

Questions 3

An insurance producer's license may be suspended or revoked by:

Options:
A.

The appointing insurer

B.

The continuing education course provider

C.

The Maryland Insurance Administration

D.

The Attorney General

Questions 4

To determine whether unfair trade practices have been violated, who has the power to examine an insurer's books and records?

Options:
A.

The Maryland Insurance Administration

B.

The National Association of Insurance Commissioners

C.

The Federal Deposit Insurance Corporation

D.

The Maryland Property & Casualty Insurance Guaranty Corporation (PCIGC)

Questions 5

Which contract offers flexible deposits, deferred taxation, a guaranteed minimum interest rate, and death proceeds equal to the cash value?

Options:
A.

An adjustable whole life insurance policy

B.

An available deferred annuity

C.

A flexible premium fixed annuity

D.

A universal life insurance policy

Questions 6

The Maryland Insurance Administration is an agency of the:

Options:
A.

Federal government

B.

State government

C.

National Association of Insurance Commissioners

D.

Maryland General Assembly

Questions 7

The Maryland Insurance Administration may suspend an agent’s license for all of the following reasons EXCEPT:

Options:
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

Questions 8

Which one of the following statements about participating life insurance is true?

Options:
A.

Policyowners may be entitled to receive dividends.

B.

Policyowners are assessed monthly for losses.

C.

The insured must be the policyowner.

D.

The insurer must be a stock company.

Questions 9

A life insurance policy becomes incontestable after it has been in force for:

Options:
A.

30 days

B.

6 months

C.

2 years

D.

3 years

Questions 10

Which amount may be deposited into a rollover individual retirement account (IRA) for the purpose of deferring income taxes?

Options:
A.

The proceeds of a life insurance policy paid to a beneficiary under age 70-1/2

B.

The refund received by the beneficiary under a refund life annuity

C.

The amount paid to the spouse of a deceased annuitant under a tax-sheltered annuity

D.

The value of an IRA established by the beneficiary’s deceased parent