Get Life-Producer Dumps : Verified Maryland Life Producer Exam (Series 20-27)

Comprehensive and Detailed Step by Step Explanation:Ethical responsibilities and state laws mandate that insurance producers act in good faith when handling applications.

Reporting material facts to the insurer (D):Producers must disclose any information that could impact underwriting decisions. Transparency ensures that policies are accurately priced and legally enforceable.

Denying knowledge (A):Violates ethical and legal obligations.

Acknowledging facts only if asked (B):Demonstrates bad faith and can lead to legal penalties.

Advising applicants to amend (C):While this helps, it does not fulfill the producer’s duty to inform the insurer.

References: Maryland Insurance Administration Producer Code of Ethics, COMAR 31.03.13.

Comprehensive and Detailed Step by Step Explanation:To be legally enforceable, a contract must meet the following requirements:

Offer and acceptance (A):One party must propose terms, and the other must agree to them.

Competent parties (B):Individuals must have the legal capacity to enter a contract (e.g., not minors or mentally incapacitated).

Consideration (C):Each party must provide something of value (e.g., money, services, or promises).

Written evidence (D)is not required for all contracts, as some verbal agreements are enforceable depending on the type of contract (except for specific cases like real estate).

References: Maryland Contract Law Principles.

Comprehensive and Detailed Step by Step Explanation:Thecost basisis the total of all premiums paid minus dividends received or used to offset premiums. This figure is used to calculate the taxable portion of the cash value upon surrender.

Cost basis (D):Represents the non-taxable portion of the surrender value; any amount exceeding this is considered taxable income.

Cash value (A):The policy’s accumulated value, which may include taxable gains.

Loan value (B):Refers to the amount available for borrowing against the policy.

Gross proceeds (C):The full amount received upon surrender, not accounting for cost basis deductions.

References:IRS Guidance on Life Insurance Taxation, Maryland Life Insurance Surrender Rules, and COMAR 31.09.14.

Comprehensive and Detailed Step by Step Explanation:Under Maryland insurance law, a terminated employee has31 days (D)to convert a group term life insurance policy into an individual policy without providing evidence of insurability.

This grace period allows individuals to maintain coverage while securing individual insurance.

10 (A), 20 (B), or 30 days (C)are incorrect, as Maryland mandates a specific 31-day window.

References: Maryland Conversion Rights in Group Life Insurance Policies, Section 15-401 of the Insurance Article.

Comprehensive and Detailed Step by Step Explanation:In astock insurance company, dividends are distributed to shareholders, who are the owners of the company.

Shareholders (B):Receive dividends based on the company’s profitability, as determined by the board of directors.

Members of the board of directors (A):May also be shareholders, but their role as directors does not entitle them to dividends.

Beneficiaries (C):Receive death benefits, not company dividends.

Producers (D):Earn commissions or fees, not dividends.

References:Maryland Corporate Insurance Guidelines, Stock vs. Mutual Insurer Framework, and COMAR 31.05.03.