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| Section | Objectives |
|---|---|
| Topic 1: Annuities | - Annuity Principles
|
| Topic 2: Life Insurance Policy Riders and Provisions | - Policy Riders
|
| Topic 3: Federal Tax Considerations | - Qualified Plans
|
| Topic 4: Maryland Insurance Laws and Regulations | - Regulatory Practices
|
| Topic 5: Types of Policies | - Term Life Insurance
|
1. 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) Ordinary income plus a 10% surcharge
B) A capital gain
C) Ordinary income
D) A deferred capital gain
2. To have "an insurable interest" in the life of another person, an individual must have a reasonable expectation of:
A) Gaining economically by the death of the other person
B) Benefiting from the other person's continued life
C) Continuing on good terms with the other person
D) Seeing the other person survive to normal life expectancy
3. What does the annuitant usually receive during the liquidation phase of an annuity?
A) A lump sum
B) Nothing
C) Cash withdrawals upon request
D) Benefit payments at regular intervals
4. In general practice, can the Maryland Insurance Administration inspect the business records of an insurance company or agency?
A) No, because only an officer of the court can inspect these records
B) Yes, because all company and agency records are public domain
C) Yes, because of the powers defined by state laws
D) No, because of privacy considerations
5. A policy of life insurance may NOT be delivered unless the policy has a:
A) Legible and brief description of the policy on the first page
B) Financial statement of the life insurance company
C) Notary seal
D) Premium coupon book
Solutions:
| Question # 1 Answer: C | Question # 2 Answer: B | Question # 3 Answer: D | Question # 4 Answer: C | Question # 5 Answer: A |
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