Insurance Licensing Updated Life-Producer Exam Questions and Answers by sierra

Comprehensive and Detailed Step by Step Explanation:Allowing an applicant to sign a blank or incomplete application (B) violates ethical and legal standards, as it undermines transparency and could lead to disputes about coverage or claims.

Selling insurance to family members (A):Permitted as long as the transactions areconducted ethically and comply with Maryland laws.

Countersigning policies (C):Required in certain situations to validate contracts in Maryland.

Splitting commissions with nonresident producers (D):Permissible under Maryland law, provided both producers are licensed and involved in the transaction.

References:Maryland Insurance Administration Producer Conduct Rules, COMAR 31.03.13, and Ethical Standards for Insurance Producers.

Comprehensive and Detailed Step by Step Explanation:Thefixed amount installment optionprovides for a predetermined monthly benefit to the policy beneficiary. Payments continue until the principal (death benefit) and accumulated interest are fully paid out.

Fixed amount installment option (A):Ensures consistent payment amounts until the death benefit and interest are exhausted. This option is often used when beneficiaries want a steady income.

Accelerated endowment option (B):Not relevant as it refers to early payouts for policies reaching maturity.

Interest-only option (C):Only pays interest earned on the death benefit, leaving the principal untouched.

Fixed period installment option (D):Guarantees payments for a specific period, regardless of whether the principal or interest is depleted.

References: Maryland Life Insurance Policy Payout Regulations and Settlement Options Guidelines.

Comprehensive and Detailed Step by Step Explanation:A life annuity with aten years certainprovision guarantees payments for at least ten years. If theannuitant dies before the end of ten years, payments continue to the beneficiary for the remainder of the period.

Until the annuitant dies, or for ten years, whichever is longer (A):Ensures payments for life with a minimum ten-year guarantee.

Until the annuitant dies, and for an additional ten years (B):Incorrect; payments cease after the guaranteed period or the annuitant’s lifetime.

Only until the annuitant dies (C):Incorrect; the ten-year guarantee applies.

Only for ten years (D):Incorrect; payments continue if the annuitant outlives the guaranteed period.

References:Maryland Annuity Payout Options Guidelines, COMAR 31.09.08.

Comprehensive and Detailed Step by Step Explanation:

Insurance licensing ensures agents meet professional standards:

Licensure demonstrates qualifications (B) to act ethically and competently on behalf of insurers.

It does not limit the number of agents (A).

Sales activity monitoring (C) and rate regulation (D) are separate regulatory functions.

References: Maryland Insurance Administration Licensing Standards.