MARYLAND LIFE AND HEALTH GENERAL EXAM SIMULATOR |
284 QUESTIONS AND ANSWERS | 2026 UPDATE | WITH
COMPLETE SOLUTION.
If a disability income policy contains a cost-of-living adjustment rider, benefits
must typically be increased Answer - at least once per year from when benefits
begin
Which of these statements regarding the extended term insurance
nonforfeiture option in a life policy is accurate? Answer - the premium to
purchase the coverage comes from the policy's cash value
Which of the following is not a reason for a business to buy key person life
insurance? Answer - an increased pension liability if the key employee dies
Qualified long-term care premiums are treated for tax purposes as Answer - ...
Individuals covered with employer-paid group health plans will normally
receive tax-free benefits under all of these plans EXCEPT Answer - disability
income
A life insurance policy's contingent beneficiary is the Answer - person who
receives the death benefits if the primary beneficiary dies before the insured
Ken is age 65 and has 2 years until he receives Social Security retirement
benefits. At his current age, which is true about Medicare Part A Hospital
,Insurance coverage? Answer - It is available through application to Social
Security
When does the insured stop making payments under a thirty-payment whole
life policy? Answer - At the time of death or 30 years after the policy's
inception, whichever comes first
The powers directly given to a producer in an agency contract are called
Answer - express
Which of the following relationships demonstrates insurable interest in the
absence of economic interest? Answer - marriage partners
An accident and health insurance policy's premium requirements are set forth
in which of the following provisions? Answer - Consideration clause
Sarah, age 88, is a life annuitant who has lived beyond her life expectancy. The
funds for additional benefit payments will be derived primarily from funds that
were Answer - not distributed to life annuitants who died before life
expectancy
Under HIPAA requirements, eligibility for the pre-existing conditions exclusion
waiver under new coverage is lost if Answer - there is a break in coverage of
more than 63 days
The health insurance premiums paid for by each partner in a partnership is
considered to be Answer - 100% tax deductible
An annuity which starts paying monthly benefits within a month after issuance
is called a(n) Answer - immediate annuity
,Which of the following best describes the tax treatment of medical expense
policies for the self-employed? Answer - 100% of medical expense plan
premiums are tax deductible
What is the insurer responsible for when a producer is acting within the scope
of authority granted in the agency contract? Answer - responsible for acts by
the producer that are authority only
What does a fixed life annuity offer protect against? Answer - savings
depletion due to longevity
Which of the following types of insurers limits the exposures it writes to those
of its owners? Answer - captive insurer
An agent whose actions exceed the authority granted by contract is Answer -
not backed by the insurer
Use of XYZ Insurance Company brochures, business cards, and rating guides is
an example of Answer - apparent authority
What kind of arrangement gives the policyowner the right to change the
beneficiary? Answer - Revocable designation
Which of these procedures is NOT designed for ambulatory care centers?
Answer - inpatient surgery
What is the guaranteed cash value of a whole life insurance policy when the
insured turns 65 years old? Answer - less than the policy's face amount
, Alan is an enrollee of a health maintenance organization (HMO) which uses a
gatekeeper system. If there ever comes a time when he needs emergency
health services, what should he do? Answer - proceed to the nearest
emergency room
Which statement is INCORRECT about the interest-only settlement option in a
life insurance policy? Answer - interest on proceeds must be paid by the
beneficiary
What happens to a life insurance policy when the policy loan balance exceeds
the cash value? Answer - policy will no longer be in force
When using the needs approach for life insurance planning, a lump sum may
be created to provide for all of the following EXCEPT Answer - employee
benefits
Which of the following would permit an insurer to delay a covered disability
policy claim? Answer - elimination period
Emily is disabled. In order to become eligible for Social Security disability
income benefits, she must be Answer - Fully insured, according to Social
Security
An agent gives a conditional receipt to a client for an insurance policy after
collecting the initial premium. When will the policy become effective? Answer
- When the conditions of the receipt are met.(A conditional receipt indicates
that certain conditions must be met in order for the insurance coverage to go
into effect)
Short-term group disability income benefits are Answer - a percentage of
weekly earnings up to a stated maximum
284 QUESTIONS AND ANSWERS | 2026 UPDATE | WITH
COMPLETE SOLUTION.
If a disability income policy contains a cost-of-living adjustment rider, benefits
must typically be increased Answer - at least once per year from when benefits
begin
Which of these statements regarding the extended term insurance
nonforfeiture option in a life policy is accurate? Answer - the premium to
purchase the coverage comes from the policy's cash value
Which of the following is not a reason for a business to buy key person life
insurance? Answer - an increased pension liability if the key employee dies
Qualified long-term care premiums are treated for tax purposes as Answer - ...
Individuals covered with employer-paid group health plans will normally
receive tax-free benefits under all of these plans EXCEPT Answer - disability
income
A life insurance policy's contingent beneficiary is the Answer - person who
receives the death benefits if the primary beneficiary dies before the insured
Ken is age 65 and has 2 years until he receives Social Security retirement
benefits. At his current age, which is true about Medicare Part A Hospital
,Insurance coverage? Answer - It is available through application to Social
Security
When does the insured stop making payments under a thirty-payment whole
life policy? Answer - At the time of death or 30 years after the policy's
inception, whichever comes first
The powers directly given to a producer in an agency contract are called
Answer - express
Which of the following relationships demonstrates insurable interest in the
absence of economic interest? Answer - marriage partners
An accident and health insurance policy's premium requirements are set forth
in which of the following provisions? Answer - Consideration clause
Sarah, age 88, is a life annuitant who has lived beyond her life expectancy. The
funds for additional benefit payments will be derived primarily from funds that
were Answer - not distributed to life annuitants who died before life
expectancy
Under HIPAA requirements, eligibility for the pre-existing conditions exclusion
waiver under new coverage is lost if Answer - there is a break in coverage of
more than 63 days
The health insurance premiums paid for by each partner in a partnership is
considered to be Answer - 100% tax deductible
An annuity which starts paying monthly benefits within a month after issuance
is called a(n) Answer - immediate annuity
,Which of the following best describes the tax treatment of medical expense
policies for the self-employed? Answer - 100% of medical expense plan
premiums are tax deductible
What is the insurer responsible for when a producer is acting within the scope
of authority granted in the agency contract? Answer - responsible for acts by
the producer that are authority only
What does a fixed life annuity offer protect against? Answer - savings
depletion due to longevity
Which of the following types of insurers limits the exposures it writes to those
of its owners? Answer - captive insurer
An agent whose actions exceed the authority granted by contract is Answer -
not backed by the insurer
Use of XYZ Insurance Company brochures, business cards, and rating guides is
an example of Answer - apparent authority
What kind of arrangement gives the policyowner the right to change the
beneficiary? Answer - Revocable designation
Which of these procedures is NOT designed for ambulatory care centers?
Answer - inpatient surgery
What is the guaranteed cash value of a whole life insurance policy when the
insured turns 65 years old? Answer - less than the policy's face amount
, Alan is an enrollee of a health maintenance organization (HMO) which uses a
gatekeeper system. If there ever comes a time when he needs emergency
health services, what should he do? Answer - proceed to the nearest
emergency room
Which statement is INCORRECT about the interest-only settlement option in a
life insurance policy? Answer - interest on proceeds must be paid by the
beneficiary
What happens to a life insurance policy when the policy loan balance exceeds
the cash value? Answer - policy will no longer be in force
When using the needs approach for life insurance planning, a lump sum may
be created to provide for all of the following EXCEPT Answer - employee
benefits
Which of the following would permit an insurer to delay a covered disability
policy claim? Answer - elimination period
Emily is disabled. In order to become eligible for Social Security disability
income benefits, she must be Answer - Fully insured, according to Social
Security
An agent gives a conditional receipt to a client for an insurance policy after
collecting the initial premium. When will the policy become effective? Answer
- When the conditions of the receipt are met.(A conditional receipt indicates
that certain conditions must be met in order for the insurance coverage to go
into effect)
Short-term group disability income benefits are Answer - a percentage of
weekly earnings up to a stated maximum
