Free Life Insurance Basics Practice Questions
Maryland Life exam — 140 practice questions.
Subtopics: Insurable interest, Principle of indemnity, Human life value, Needs approach, Risk classification, Insurer types, Underwriting, Adverse selection, Policy summary title, In-force data fee, Illustration label, Prohibited illustration terms, Illustration signature, No illustration used, Buyer's guide purpose, Accelerated benefit marketing, Accelerated benefit tax disclosure, Viatical broker, Viatical rescission, Terminally ill definition, Viatical broker license, Chronically ill definition, Insurable interest parties, Personal uses, Liquidity, Buy-sell funding, Key person, Term vs permanent, Participating policies, Separate account, Variable products licensing, Premium factors, Mortality, Interest assumption, Premium mode, Advertising, Field underwriting, Application accuracy, Sources of underwriting, Substandard risk, Effective date, Statement of good health, Backdating, MIB, Unfair discrimination underwriting, Group vs individual, Warranties vs representations, Disclosure statement, Estate conservation, Executive compensation, Expense factor, Declined risk, Surrender comparison index, Net amount at risk, Legal reserve, CSO mortality table, Level premium funding, Cash value accumulation, Endowment maturity, Free look period, Policy replacement rules, Twisting, Churning, Rebating, Defamation, Binding receipt, Insuring clause, Consideration clause, Owner vs insured, Stranger-originated life insurance, Suitability, Sales illustration, Producer appointment, Paramedical exam, Inspection report, Nonmedical limit, Split-dollar plan, Section 162 executive bonus, Dependency period need, Social Security blackout period, Capital retention approach, Final expense need, Insurance age, Flat extra premium, Postponed risk, Agent's report, Policy summary, Material misrepresentation, Estate creation, Cash accumulation, Charitable giving, Buy-sell cross purchase, Buy-sell entity purchase, Cross purchase count, Key person beneficiary, Deferred compensation, Split dollar collateral assignment, Executive bonus taxation, Business overhead uses, Information for needs analysis, Group vs individual class, Nonparticipating policy, Fixed vs variable, Variable minimum death benefit, Gross vs net premium, Modal factors, Mortality table use, Gender and mortality, Producer delivery duties, Constructive delivery, Rated policy delivery, Conditional receipt insurability, No premium with application, Application signatures, Application corrections, Insurable interest third party, Self insurable interest, Attending physician statement, MIB adverse decisions, MIB pre-notice, HIV testing consent, Underwriting prohibited factor, Rated policy, Standard risk, Prescription database, Social Security fully insured, Currently insured, Survivor benefits children, Spouse caring for child, Blackout period end, Lump-sum death benefit, Full retirement age, Social Security disability, Social Security as offset, Producer report purpose
Read the Life Insurance Basics study guide
Sample questions & answers
1. When must insurable interest exist for a life insurance policy to be valid?
At the time of application
For life insurance, insurable interest must exist at policy inception (application); it need not exist at the time of death.
2. Life insurance differs from property insurance because it is generally:
A valued contract paying a stated sum
Life insurance is a valued contract paying a stated face amount, not an indemnity contract that measures actual loss.
3. The human life value approach estimates life insurance need based on:
The insured's future earning capacity
The human life value approach calculates the present value of the insured's expected future earnings to determine coverage need.
4. The needs approach to determining coverage focuses on:
The family's financial obligations and goals
The needs approach quantifies the family's obligations (debts, income replacement, education) to set an appropriate amount of coverage.
Practice: Life Insurance Basics
Answer choices are shuffled every time, and every question comes with an explanation.
Practice questions are study aids generated for exam preparation and are not actual exam questions. Content is provided for educational purposes and is not legal advice. Verify current statutes, rules, and exam specifications with the Insurance Department and the exam administrator before relying on it.
