Maryland Insurance Life-Producer Reddit Questions

Comprehensive and Detailed Step by Step Explanation:When a death claim is filed on a life insurance policy with an outstanding loan:

Deducted from the face amount (A):The death benefit is reduced by the loan balance plus any accrued interest, ensuring the insurer recovers the outstanding debt.

Beneficiary obligation (B):Incorrect. The beneficiary receives the adjusted benefit without personal liability for the loan.

Claim against the estate (C):Incorrect. The loan is tied to the policy, not the estate.

Canceled without adjustment (D):Incorrect, as insurers must recoup the loan amount from the death benefit.

References:Maryland Life Insurance Policy Loan Provisions, COMAR 31.09.03, and Standard Death Claim Settlement Practices.

Comprehensive and Detailed Step by Step Explanation:The licensing of insurance agents ensures professional competency and ethical conduct:

Licensuredemonstrates qualifications (B)required to represent insurers and serve clients.

Maryland does not impose limits on the number of licensed agents, invalidating (A).

Monitoring sales activity (C) and rate regulation (D) are distinct regulatory functions.

References: Maryland Insurance Administration Licensing Requirements.

Comprehensive and Detailed Step by Step Explanation:Underwriting involves evaluating risk factors that could influence the likelihood of claims and ensuring compliance with anti-discrimination laws.

Ethnic heritage (A):Incorrect. Using ethnic heritage as an underwriting factor violates anti-discrimination laws, including Maryland Insurance Article §27-501.

Amount of insurance applied for (B):Correct. Insurers consider coverage amounts to assess risk and pricing.

Driving record (C):Correct. Poor driving history, particularly DUI incidents, increases risk.

Family health history (D):Correct. Inherited conditions and family medical history help predict potential health risks.

References:Maryland Insurance Anti-Discrimination Laws, Life Insurance Underwriting Standards, and COMAR 31.08.07.

Comprehensive and Detailed Step by Step Explanation:A viatical settlement allows a policyowner (often with a terminal illness) to sell their life insurance policy for immediate cash, typically to a third party.

Less than the death benefit (D):The settlement amount is a fraction of the policy's face value, reflecting the buyer's expected profit after paying premiums and collecting the death benefit.

Equal to the sum of all premiums paid (A):This is incorrect as premiums paid do not determine the settlement amount.

Equal to the death benefit (B):The buyer profits from receiving the full death benefit upon the insured’s death, so they pay less upfront.

Greater than the death benefit (C):This would result in a financial loss for the buyer, which is not the case in viatical settlements.

References: Maryland Viatical Settlement Act, COMAR 31.09.10, and Terminal Illness Policyholder Assistance Guidelines.