QUESTIONS AND CORRECT ANSERS -

Michigan Life Insurance ACTUAL EXAM 200

QUESTIONS AND CORRECT ANSERS -

LATEST COVERING MOST TESTED QUESTIONS

When the principal gives the agent authority in writing, it's referred to as?

• Imposed Authority
• Express Authority
• Implied Authority
• Apparent Authority - CORRECT ANSWER-B. Express Authority

Sharon is the policyowner of a $50,000 life insurance policy. Her son, Mike, is the beneficiary. If Sharon MUST obtain Mike's signature in order to change the beneficiary, what kind of beneficiary designation is this?

• Contingent
• Tertiary
• Revocable
• Irrevocable - CORRECT ANSWER-D. Irrevocable

Which of these factors would an insurer consider when determining whether to accept a group life plan?

• Average age
• Grace period
• Number of dependents
• Incontestable period - CORRECT ANSWER-A. Average age

The authority granted to a licensed producer is provided via the?

• Law of Agency
• Producer's apparent authority
• Principal Capacity
• Written contract - CORRECT ANSWER-A. Law of Agency B

The type of multiple protection coverage that pays on the death of the last person is called a(n)? 1 / 4

• Survivorship life policy
• Annuity joint policy
• Dual life policy
• Joint life policy - CORRECT ANSWER-A. Survivorship life policy B

An immediate annuity has been purchased with a single premium. When does the annuitant typically begin receiving benefit payments?

• 24 months
• 12 months
• 1 month
• 6 months - CORRECT ANSWER-C. 1 month

An employee under a group insurance policy has the right to name a beneficiary and the right to?

• Convert to an individual policy in the event of employment termination
• Remain on the group plan in the event of employment termination
• Cash surrender the existing policy
• Change the policy provisions - CORRECT ANSWER-A. Convert to an individual policy in the event of

employment termination

The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority?

• Implied
• Discreet
• Express
• Apparent - CORRECT ANSWER-A. Implied

What does the word "level" in Level Term describe?

• The cash value
• The face amount
• The period of coverage
• The premium payments - CORRECT ANSWER-B. The face amount plus interest
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Converting a group plan to permanent life insurance requires?

• Submitting proof of insurability
• Paying a lower premium
• The conversion being applied for within 31 days of termination
• Converting to term life insurance - CORRECT ANSWER-C. The conversion being applied for within

31 days of termination

What is the primary purpose of a rating service company such as A.M. Best?

• Determine which insurer offers the best rates
• Determine which insurer offers the best policies
• Determine financial strength of an insurance company
• Determine which agent to use locally - CORRECT ANSWER-C. Determine financial strength of an

insurance company

The term which describes the fact that both parties of a contract may NOT receive the same value is referred to as?

• Unilateral
• Estoppel
• Apparent
• Aleatory - CORRECT ANSWER-D. Aleatory

A nonparticipating company is sometimes called a(n)?

• Alien insurer
• Stock insurer
• Reinsurer
• Mutual insurer - CORRECT ANSWER-B. Stock insurer

A Modified Endowment Contract (MEC) is best described as?

• A life insurance contract which accumulates cash values higher than the IRS will allow
• A modified life contract which enjoys all the tax advantages of whole life insurance
• An annuity contract which was converted from a life insurance contract 3 / 4

• A life insurance contract where all withdrawals prior to age 65 are subject to a 10% penalty -

CORRECT ANSWER-A. A life insurance contract which accumulates cash values higher than the IRS will allow B

Under a contract of adhesion,

• There is potential for an unequal exchange of value
• The insurer's obligations are dependent upon certain acts of the insured individual
• The terms must be accepted or rejected in full
• Only one party makes any kind of enforceable promise - CORRECT ANSWER-C. The terms must be

accepted or rejected in full

The coverage, conditions, and limitations in the master policy of a group contract can be found in which document?

• Consumer report
• Coverage document
• Certificate of coverage and benefits
• Certificate of Authority - CORRECT ANSWER-C. Certificate of coverage and benefits D

What are an applicant's statements concerning occupation, hobbies, and personal health history regarded as?

• Representation
• Collateral
• Guarantee
• Warranty - CORRECT ANSWER-A. Representation

Which of the following is NOT a condition that must be met for an accidental death benefit to be paid?

• Death must occur within a stated number of days after the accident
• Accidental bodily injury must have been the cause of death
• Injury must have been suffered prior to a stated age
• Cause of death must be from a job-related injury - CORRECT ANSWER-D. Cause of death must be

from a job-related injury

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