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MICHIGAN LIFE INSURANCE STATE EXAM/
MOST
RECENT VERSION FOR MICHIGAN
INSURANCE
STATE EXAM ALL QUESTIONS AND CORRECT
ANSWERS/ BEST GRADED A+
Fair Credit Reporting Act main purpose is to protect consumers with guidelines regarding credit reporting and distribution Which of the following protects a policy owner from misrepresentation caused by an innocent mistake Incontestable clause A life insurance policy owner was injured in an automobile accident which results in a total and permanent disability. Which rider would pay a monthly amount because of this disability Disability income rider Which scenario would most life insurance policies exclude coverage for An individual who has a hobby racing cars once a month Dorian exercised a nonforfeiture option by using his life policy's cash value to purchase an extended term option. When the term insurance expires The protection ends What happens when an insurance policy is backdated? The policy's effective date is earlier than the present
Rob purchased a standard whole life policy with a $500,000 death benefit when he was age 30. His insurance agent told him the policy would be paid up if he reached age 100. The present cash value of the policy equals $250,000. Rob recently died at age 60. The death benefit would be 500, How is the cost of a policy affected when a policyowner pays premiums more frequently? Increases Intentional withholding of material facts that would affect an insurance policy's validity is called Concealment Under Michigan Law, which of the following would NOT be considered an illegal inducement? A promotional item with the producer's name and address valued at $ Which contract element is insurable interest a component of? legal purpose Which type of rider will waive the premium on a child's life insurance policy if the parent paying the premium dies? Payor benefit What is the nonforfeiture value of an annuity before annuitization? All premiums paid, plus interest, minus any withdrawals and surrender charges Who assumes the investment risk with fixed annuity The insurer
What is known as the immediate specific event causing loss and giving rise to risk peril The cause of a loss is referred to as a(n) Peril The term which describes the fact that both parties of a contract may NOT receive the same value is referred to as Aleatory In an insurance contract the insurer is the only party legally obligated to perform. Because of this an insurance contract is considered unilateral According to life insurance contract law, insurable interest exists At the time of application What is implied authority? authority not specifically defined in the contract but considered to be an extension of regular duties When the principal gives the agent authority in writing, it's referred to as express authority What makes a policy a unilateral contract Only the insurer is legally bound to
Under a contract of adhesion The terms must be accepted or rejected in full All of these are characteristics of a universal life insurance policy EXCEPT Fixed surrender value Which type of life insurance offers flexible premiums, a flexible death benefit and the choice of how the cash value will be invested? Variable universal policy A permanent life insurance policy where the policyowner pays premiums for a specified number years i called a Limited pay policy Which type of mutliple protection policy pays on the death of the last person Survivorship life policy A spouse and child cna be added to the primary insured's coverage as what kind of rider? Family term A business will typically use which type of life insurance to cover their employees? Group policy The type of policy which pays the death of the last person is called survivorship life What type of life insurance is normally associated with a Payer benefit rider Juvenile insurance All of these statements concerning whole life insurance are false EXCEPT
Which of these describes the result of a modified endowment contract that failed to meet the seven pay test? Pre death distributions are typically taxable The premium for a Modified whole life policy is lower than the typical whole life policy during the first few years and then higher than typical for the remainder A limited payment whole life policy provides lifetime protection A policyowner may change two policy feature on what type of life insurance Adjustable Life A MEC is best described as
A life insurance contract which accumulates cash values higher than the IRS will allow A renewable term life insurance policy can be renewed at a predetermined date or age, regardless of the insured's health A securities license is required for a life insurance producer to sell
Last survivor Life insurance What is created after policy proceeds are obtained in a lump sum and them immediately invested Estate An example of naming a beneficiary by class would be "to the children of my union with ned Jackson" A life insurance claim which involves a per capita distubution of policy proceeds would be payable to the "named living primary beneficiaries "
A policy owner prohibited from making any changes to the policy without the beneficiary's written consent under which beneficiary designation irrevocable beneficiary How is the cost of a policy affected when a policyowner pays premiums more frequently increases Naming a contigent beneficiary as "all surviving children" is described by which term Class designation Which of these is considered a major tax advantage of life insurance income tax is typically not wed on proceeds paid directly to a beneficary Purchasing a life insurance policy in order to avoid the forced sale of assets upon death is called estate conservation
The automatic premium loan provision authorizes an insurer to withdraw from a policy's cash value the amount of past due premiums that have not been paid by the end of the grace period What is the purpose for having an accelerated death benefit on a life insurance policy it allows for cash advances to be paid against the death benefit if the insured becomes terminally ill All of these are standard exclusions found in a life insurance policy except disability When a situation accurately describes a reduced paid-up non forfeiture option Policy has decreased face amount in what part of an insurance policy are policy benefits found
Declarations Which of these is NOT considered to be a common life insurance nonforfeiture option Life income annuity Which of these is considered to be a living benefit option in a life insurance policy Accelerated death benefit all of the following riders can increase the death benefit amount EXCEPT Waiver of Premium What is the name of the provision which states that a copy of the application must be attached to the policy when issued Entire Contract
In which of the following relationships would there NOT be an insurable interest Business owner to Business customer When does a life insurance policy typically become effective? When initial premium is collected and policy is issued Which of the following does a life insurance policy summary normally include The policy's cash value An insurance producer is often responsible for field underwriting during the application process. ALL of the these are possible filed underwriting roles EXCEPT providing commission information to the applicant 3 multiple choice options
In regards to a life insurance contract, which of the following statements is NOT true regarding the concept of insurable interest? insurable interest can be established sufficiently by sentimental attachment alone Preferred risk policies with reduced premiums are issued by insurance companies because the insured has better than average mortality or morbidity experience An employee under a group insurance policy has the right to name a beneficiary and right to convert to an individual policy in the event of employment termination The coverage, conditions, and limitation in the master policy of a group contract can be found in which document Certificate of coverage and benefits The conversion privilege under a group life plan allows an employee to convert to a(n) individual plan upon employment termination The coverage, conditions and limitations in the master policy of a group contract can be found in which document Certificate of coverage and benefits
What will the beneficiary receive if an annuitant dies during the accumulation period? The greater the accumulated cash value or the total premium paid What happens to interest earned if the annuitant dies before the payout start date it is taxable When does an immediate annuity begin making payments After the first premium has been paid Simon has purchased a fixed immediate annuity. His payment amount will be dependent upon principal, interest, and the contract's income period An immediate annuity has been purchased with a single premium. When does the annuitant typically begin receiving benefit payments
1 month The taxable portion of each annuity payment is c Exclusion ratio Maria would like an annuity that provides a guaranteed accumulation or payout. The type of annuity she is seeking is called annuity certain Kristi purchases an annuity that will pay her husband an income for 15 years. If he dies, this income will become payable to their children for the remainder of the period. Kristi has what kind of annuity? Temporary annuity certain Which of these statements regarding the annuitant is CORRECT?
