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

Comprehensive and Detailed Step by Step Explanation:

Applicant: The person who applies for the policy. Here, Kim applies → Kim is the applicant.

Insured: The person whose life is covered. It says “on Kim’s own life” → Kim is the insured.

Beneficiary: The person who receives the death benefit. Kim names Chris to receive it → Chris is the beneficiary.

Policyowner: Usually the applicant/insured when you buy insurance on yourself (unless ownership is assigned differently). Here, Kim applies on Kim’s life → Kim is typically the policyowner.

Why B is correct: Kim is the policyowner and applicant.

Maryland reference (communication / misrepresentation): Producers must accurately describe roles/rights (owner rights, beneficiary rights). Misstating who controls the policy could be misleading disclosure (misrepresentation).

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Purpose of a deferred annuity.

A deferred annuity is designed primarily for long-term accumulation, most commonly for retirement income planning.

Two phases of a deferred annuity.

Accumulation period: Premiums are paid and interest accumulates on a tax-deferred basis.

Annuity (payout) period: Income payments begin.

Timing of income benefits.

Unlike immediate annuities, deferred annuities are intended to begin income at a future date chosen by the owner, often many years later (e.g., at retirement age).

Evaluate each option.

A. Upon death

Incorrect. Death benefits may be paid, but this is not the intent of income benefits.

B. Upon beneficiary request

Incorrect. Beneficiaries receive death benefits, not scheduled annuity income.

C. Within several weeks

This describes immediate annuities, not deferred annuities.

D. On a specified date often years after issuance

Correct. This reflects the core purpose of a deferred annuity.

Maryland suitability relevance.

Maryland requires producers to recommend annuities consistent with the consumer’s time horizon and income needs, which is why deferred annuities are matched to future income goals.

Conclusion.

Deferred annuity income is intended to begin on a specified future date, often years later.

Cash values in whole life insurance are a key feature, and they:

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

Are guaranteed in 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.