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

The beneficiary is the individual or entity named in the life insurance policy to receive the death benefit upon the insured’s death.

Designated recipient of proceeds (B): The policyholder nominates this party in the policy documents.

Ownership interest in the policy (A): Refers to the policyowner, who controls and funds the policy but may not be the beneficiary.

Insurer (C): Issues and administers the policy but is not a recipient.

Owner of the cash value fund (D): This pertains to cash value accumulation, separate from death benefit designation.

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.

Beneficiary designation concepts.

Life insurance policies allow the owner to name beneficiaries who receive proceeds at death.

Revocable vs. irrevocable designations.

A revocable beneficiary can be changed by the policyowner at any time without the beneficiary’s consent.

An irrevocable beneficiary cannot be changed without the beneficiary’s written consent.

Evaluate each option.

A. Contingent designation

Refers to a secondary beneficiary, not the right to change.

B. Irrevocable designation

Opposite of the described situation.

C. Contestable designation

Not a valid beneficiary term.

D. Revocable designation

Correct. This allows the policyowner to change beneficiaries.

Maryland relevance.

Maryland recognizes revocable beneficiary designations unless the policy specifically states otherwise.

Conclusion.

Reserving the right to change beneficiaries is a revocable designation.