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Maryland Insurance Administration Maryland Life Producer Exam (Series 20-27) Sample Questions:
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
B) A capital gain
C) Ordinary income plus a 10% surcharge
D) A deferred capital gain
2. When a wage earner dies, the surviving family members may have all of the following expenses EXCEPT:
A) Final expenses
B) Death taxes
C) Family living expenses
D) Unemployment tax liabilities
3. When an individual replaces a life insurance policy, the form entitled "Important Notice Replacement of Life Insurance or Annuities" is REQUIRED to be signed by:
A) Both the applicant and the insurance producer
B) The applicant only
C) The insurance producer only
D) An officer of the insurer
4. The annual addition to an employee's account in a qualified retirement plan:
A) Must be the same dollar amount for every full-time employee
B) Cannot exceed maximum limits set by the Internal Revenue Service
C) Can be any amount as determined by the employer from year to year
D) Usually reflects the employee's individual work performance each year
5. Which life annuity contract feature provides that benefit payments will continue for a minimum number of years regardless of when the annuitant dies?
A) Cash refund
B) Installment refund
C) Period certain
D) Cost recovery
Solutions:
| Question # 1 Answer: A | Question # 2 Answer: D | Question # 3 Answer: A | Question # 4 Answer: B | Question # 5 Answer: C |



