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

Comprehensive and Detailed Step by Step Explanation:Cash values in whole life insurance are a key feature, and they:

Accumulate as a result of thelevel premium concept (A), where excess premiums in the early years of the policy build the cash value.

Are guaranteedin whole life policies, contrary to option B.

Do not equal the face value at age 65 (C) unless specifically structured for that purpose.

Continue to grow beyond age 65 as long as the policy remains active, invalidating option D.

References: Maryland Insurance Guidelines on Whole Life Policies, Cash Value, and Premium Structures.

Comprehensive and Detailed Step by Step Explanation:Universal life insurance policies offer flexibility and adaptability, but they also have specific rules:

Minimum cash value vs. death benefit (A):Correct. IRS rules require a minimum difference to maintain tax-advantaged status.

Level or increasing death benefits (B):Correct. Policyholders can choose based on their needs.

Cash value withdrawals (C):Correct. Withdrawals are allowed but may incur surrender charges.

Automatic lapse (D):Incorrect. Universal life does not immediately lapse due to missed payments; instead, costs are deducted from the cash value, and the policy remains in force until the cash value is depleted.

References:Maryland Insurance Administration Policy Lapse Guidelines, IRS Tax Code §7702, and COMAR 31.09.13.

Comprehensive and Detailed Step by Step Explanation:Aflexible premium fixed annuityis designed to allow policyholders flexibility in premium payments while providing guaranteed growth.

Flexible deposits:Policyholders can make variable contributions based on their financial situation.

Deferred taxation:Earnings grow tax-deferred until withdrawal.

Guaranteed minimum interest rate:Fixed annuities offer this feature to protect against market downturns.

Death proceeds equal to cash value:Upon death, beneficiaries typically receive the accumulated cash value.

Other Options:

Adjustable whole life policy (A):Features adjustable premiums but lacks deferred taxation and guaranteed rates.

Deferred annuity (B):Generic and does not specify the features of fixed annuities.

Universal life (D):Provides more flexibility but differs in guaranteed returns.

References:Maryland Annuity Guidelines, COMAR 31.09.08, and Tax-Deferred Financial Product Regulations.