Accident, Health And Life Md Law Practice Exam

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| By Vivian Tayor
Vivian Tayor, Insurance & Finance
Vivian, with over a decade of financial and insurance leadership, founded Celevi CE, an elite continuing education organization, aiming to empower industry experts with trust and respect.
Quizzes Created: 19 | Total Attempts: 40,785
Questions: 20 | Attempts: 1,986

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Accident, Health And Life Md Law Practice Exam - Quiz


Questions and Answers
  • 1. 

    Dan’s policy was reinstated on March 15th. On March 29th he was involved in an accident, and seriously injured. When would his injuries be covered from his accident?

    • A.

      Never

    • B.

      On March 25th, 10 days after his policy was reinstated

    • C.

      Immediately

    • D.

      In 30 days

    Correct Answer
    C. Immediately
    Explanation
    Dan's injuries would be covered immediately from his accident because his policy was reinstated on March 15th and the accident occurred on March 29th. Since the policy was active at the time of the accident, the coverage would apply without any waiting period.

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  • 2. 

    What is Maryland’s premium tax rate?  

    • A.

      6%

    • B.

      7%

    • C.

      5%

    • D.

      2%

    Correct Answer
    A. 6%
    Explanation
    Maryland's premium tax rate is 6%. This means that insurance companies operating in Maryland are required to pay a tax of 6% on the premiums they collect from policyholders. This tax helps generate revenue for the state and is a common practice in many states to fund various government programs and services.

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  • 3. 

    Carl’s policy lapsed. Which of the following would reinstate his policy?  

    • A.

      Carl’s insurance company accepted his late payment

    • B.

      Carl sent a written noticed regarding his late payment

    • C.

      Carl was issued a reinstatement application

    • D.

      Carl contacted his agent

    Correct Answer
    A. Carl’s insurance company accepted his late payment
    Explanation
    Carl's policy lapsed, which means it was no longer in effect. To reinstate his policy, Carl would need to take some action to bring it back into effect. Out of the given options, the only action that would reinstate his policy is if his insurance company accepted his late payment. By accepting the payment, the insurance company would consider the policy as active again.

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  • 4. 

    Which of the following is a unique characteristic of a Non Profit Health Service?  

    • A.

      It provides services to individuals in need of medicare

    • B.

      It is exempt from State taxes

    • C.

      It is an HMO

    • D.

      It may issue a policy that covers Disability Income Benefits

    Correct Answer
    B. It is exempt from State taxes
    Explanation
    A unique characteristic of a Non Profit Health Service is that it is exempt from State taxes. This means that the organization does not have to pay taxes to the state government, which allows them to allocate more funds towards providing healthcare services to individuals in need of medicare. This exemption from state taxes is a distinct feature that sets Non Profit Health Services apart from other types of healthcare organizations.

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  • 5. 

    When can a patient be a dependent on a policy?  

    • A.

      Always

    • B.

      Never

    • C.

      If the parent was claimed on an insured’s Income Tax return

    • D.

      After the 30 days waiting period has been satisfied

    Correct Answer
    C. If the parent was claimed on an insured’s Income Tax return
    Explanation
    A patient can be a dependent on a policy if the parent was claimed on an insured's Income Tax return. This means that the patient is financially dependent on the insured and is eligible for coverage under the policy.

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  • 6. 

     Jim pays his premium monthly. What is his Grace Period?  

    • A.

      7 days

    • B.

      30 days

    • C.

      31 days

    • D.

      10 days

    Correct Answer
    D. 10 days
    Explanation
    Jim's grace period is 10 days. The grace period refers to the additional time given to policyholders to pay their premium after the due date without incurring any penalty or losing coverage. In this case, Jim has 10 days from the due date to make his payment before any consequences occur.

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  • 7. 

     Mr. Jones answered questions on his application. What are they called?  

    • A.

      Warranties

    • B.

      Responses

    • C.

      Representations

    • D.

      Perils

    Correct Answer
    C. Representations
    Explanation
    Mr. Jones answered questions on his application, which are called representations. Representations are statements made by an applicant on an application form that provide information about themselves or their circumstances. These statements are used by the organization or institution to assess the applicant's eligibility or suitability for a particular purpose, such as a job or a loan.

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  • 8. 

    An insurer who issued a policy to be replaced is which of the following?  

    • A.

      Existing Insurer

    • B.

      Replacing Insurer

    • C.

      Conservation

    • D.

      Primary Insurer

    Correct Answer
    A. Existing Insurer
    Explanation
    The correct answer is "Existing Insurer." This means that the insurer who issued the policy that is being replaced is considered the "existing insurer." This implies that there is a new insurer who will be taking over the policy.

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  • 9. 

     What are issued to employees under a Master Policy?  

    • A.

      Certificates of Qualification

    • B.

      Certificates of participation

    • C.

      Certificates of Authority

    • D.

      Certificates of Insurance

    Correct Answer
    D. Certificates of Insurance
    Explanation
    Certificates of Insurance are issued to employees under a Master Policy. These certificates serve as proof that the employee is covered by the insurance policy. They provide details about the coverage, such as the policy number, effective dates, and limits of coverage. Certificates of Insurance are important documents that employees may need to present to third parties, such as clients or vendors, to show that they have the necessary insurance coverage.

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  • 10. 

    What is required if an employee joins a group plan after an Enrollment Period?  

    • A.

      Evidence of insurability

    • B.

      Evidence of payment

    • C.

      Evidence of conversion

    • D.

      Evidence of incontestability

    Correct Answer
    A. Evidence of insurability
    Explanation
    If an employee joins a group plan after an Enrollment Period, they would need to provide evidence of insurability. This means that they would need to provide proof or documentation that shows they are in good health and eligible for coverage under the group plan. This is necessary because joining the plan after the Enrollment Period may indicate a change in health status or eligibility, and the insurance company needs to assess the risk involved in providing coverage to the employee.

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  • 11. 

    All insurance companies must participate and fund which of the following?  

    • A.

      Life Association

    • B.

      Life and Annuity Association

    • C.

      Life and Health Guaranty Association

    • D.

      Insurance Association

    Correct Answer
    C. Life and Health Guaranty Association
    Explanation
    All insurance companies are required to participate in and fund the Life and Health Guaranty Association. This association provides protection to policyholders in the event that an insurance company becomes insolvent or is unable to fulfill its obligations. By participating and funding this association, insurance companies ensure that their policyholders are protected and their claims will be paid even in the case of financial difficulties faced by the company.

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  • 12. 

    Who pays for a Noncontributory Plan?  

    • A.

      Employee

    • B.

      Employer

    • C.

      Both the employer and employee

    • D.

      Executive Officer

    Correct Answer
    B. Employer
    Explanation
    In a noncontributory plan, the employer pays for the plan entirely. This means that the employee does not have to contribute any portion of their salary towards the plan. The employer bears the full cost of providing the benefits under the noncontributory plan.

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  • 13. 

    One Unfair Trade practice is defamation, which is described in which fo the following?  

    • A.

      Misrepresenting the terms and coverage of a policy

    • B.

      Attempting to harm the reputation of a producer or insurer by making false accusations pertaining to solvency

    • C.

      Giving Super bowl tickets to an applicant as an inducement to purchase insurance

    • D.

      Charging different rates for separate persons in the same classification

    Correct Answer
    B. Attempting to harm the reputation of a producer or insurer by making false accusations pertaining to solvency
    Explanation
    Defamation is a form of unfair trade practice that involves making false accusations to harm the reputation of a producer or insurer regarding their solvency. This can be done in an attempt to discredit the producer or insurer and negatively impact their business. It is considered unfair because it involves spreading false information with the intention of causing harm to the reputation of the producer or insurer.

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  • 14. 

    When making a loan on a life insurance policy’s cash value, the insurer may deduct from the loan value all of the following EXCEPT:

    • A.

      Any unpaid balance of the premium for the current policy year

    • B.

      Interest on the loan to the end of the current policy year

    • C.

      Any existing indebtedness to the insurer not already deducted.

    • D.

      Future years premiums that are not yet due

    Correct Answer
    D. Future years premiums that are not yet due
    Explanation
    When making a loan on a life insurance policy's cash value, the insurer may deduct from the loan value the unpaid balance of the premium for the current policy year, interest on the loan to the end of the current policy year, and any existing indebtedness to the insurer not already deducted. However, future years premiums that are not yet due cannot be deducted from the loan value.

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  • 15. 

    An insurance producer’s license can be renewed for an additional:  

    • A.

      1 year

    • B.

      2 Years

    • C.

      3 years

    • D.

      4 years

    Correct Answer
    B. 2 Years
    Explanation
    An insurance producer's license can be renewed for an additional 2 years. This means that after the initial license period expires, the producer has the option to renew their license for an additional 2 years. This allows them to continue working as an insurance producer without having to go through the process of obtaining a new license. It provides convenience and continuity for the producer and ensures that they meet the necessary requirements to maintain their license.

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  • 16. 

    If a lender refuses to extend a loan unless the applicant also purchases insurance, this is considered to be:

    • A.

      Aggressive sales practices

    • B.

      Leverage

    • C.

      Coercion

    • D.

      Twisting

    Correct Answer
    C. Coercion
    Explanation
    Coercion refers to the act of forcing or compelling someone to do something against their will. In this scenario, the lender is refusing to extend a loan unless the applicant also purchases insurance. By making the loan conditional on the purchase of insurance, the lender is using coercion to pressure the applicant into buying a product they may not necessarily want or need. This practice is considered unethical and coercive because it limits the applicant's choices and forces them into a transaction they may not have otherwise agreed to.

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  • 17. 

    In replacement, an existing insurer must provide policyowners with a policy summary for existing Life Insurance within how many days of receiving the written communication and replacement?

    • A.

      31 days

    • B.

      5 days

    • C.

      60 days

    • D.

      15 days

    Correct Answer
    B. 5 days
    Explanation
    The correct answer is 5 days. When an existing insurer receives a written communication and replacement for life insurance, they are required to provide policyowners with a policy summary within 5 days. This ensures that policyowners have access to important information about their insurance policy in a timely manner.

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  • 18. 

    Twisting involves:  

    • A.

      Defamation

    • B.

      Discrimination

    • C.

      Misrepresentation

    • D.

      Rebating

    Correct Answer
    C. Misrepresentation
    Explanation
    Twisting refers to the act of misrepresenting or distorting information in order to deceive or manipulate someone. It involves presenting false or misleading facts or statements to mislead or deceive others. This can be done for various purposes, such as gaining an advantage in a negotiation or transaction. Misrepresentation is the correct answer because it accurately describes the act of twisting and its implications.

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  • 19. 

    The insurance laws in this state prohibit all of these acts, except:  

    • A.

      The replacement of policies in force

    • B.

      Receiving commissions without a valid insurance license

    • C.

      Obtaining an insurance license for the purpose of writing controlled business

    • D.

      The commingling of your funds with the insured’s premiums

    Correct Answer
    A. The replacement of policies in force
    Explanation
    The insurance laws in this state allow for the replacement of policies in force. This means that policyholders have the option to replace their existing insurance policies with new ones. However, the other acts mentioned in the question are prohibited by the insurance laws. Receiving commissions without a valid insurance license is illegal, as individuals must have a valid license to earn commissions in the insurance industry. Obtaining an insurance license for the purpose of writing controlled business is also prohibited, as it implies fraudulent intent. Additionally, the commingling of funds with the insured's premiums is not allowed, as it violates the principle of keeping the insured's premiums separate from the insurer's funds.

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  • 20. 

     The Commissioner must examine the affairs, transactions, accounts, records, and assets of each domestic insurer at least every:

    • A.

      3 years

    • B.

      5 years

    • C.

      2 years

    • D.

      1 year

    Correct Answer
    B. 5 years
    Explanation
    The correct answer is 5 years. The Commissioner is required to examine the affairs, transactions, accounts, records, and assets of each domestic insurer at least every 5 years. This examination is important to ensure that the insurer is operating in compliance with the regulations and to assess its financial health. By conducting these regular examinations, the Commissioner can identify any potential issues or risks and take appropriate actions to protect policyholders and maintain the stability of the insurance market.

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Quiz Review Timeline +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Jun 03, 2024
    Quiz Edited by
    ProProfs Editorial Team
  • Mar 25, 2012
    Quiz Created by
    Vivian Tayor

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