MICHIGAN LIFE INSURANCE STATE EXAM

PDF Download

MICHIGAN LIFE INSURANCE STATE EXAM

Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -100 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: Pre-death distributions from a modified endowment contract (MEC) receive different tax treatment than other life insurance policies because the MEC has tax deductible premiums the MEC is considered an illegal product the MEC tends to be an investment vehicle the MEC does not accumulate cash value

Answer:

the MEC tends to be an investment vehicle

Question 2: An insurance producer licenses required for which of the following?

An office manager who sets sales appointments for an agency's producers An officer of a Fortune 500 Insurance company A business entity soliciting insurance The head underwriter of a large insurer

Answer:

A business entity soliciting insurance Question 3: What does the Group Life underwriting risk selection process help protect insurance companies from?Risk aversion Natural selection Adverse selection Risk Management

Answer:

Adverse Selection

Question 4: Which of the following is present when an applicant stands to lose value if the insured dies?Insurability Offer and acceptance Insurable interest Consideration

Answer:

Insurable interest Question 5: What happens to the coverage under a children's term rider when that child reaches a certain specified age?Coverage decreases automatically Coverage increases automatically Coverage remains as long as proof of insurability is provided Coverage is eliminated

Answer:

Coverage is eliminated Question 6: Which of these factors would an insurer consider when determining whether to accept a group life plan?Number of dependents Incontestable period Average age Grace period

Answer:

Average age Question 7: Which of the following annuity payout makes no additional payments regardless of when the annuitant dies?Life only Life with period certain Cash refund Installment refund

Answer:

Life only

Question 8: Which of the following is NOT a federal requirement of a qualified plan?Must benefit a broad cross-section of employees Employee must be able to make unlimited contributions Vesting schedule must be defined Employer establishes the plan

Answer:

Employee must be able to make unlimited contributions Question 9: Which of the following is an example of the illegal act of defamation?Offering premium rebate gift, or a special advantage of any kind to consumers as an inducement to purchase a contract of insurance Making a statement that is false or maliciously critical of the financial condition of an insurer Replacing an insurance policy from one insurer to another based on misrepresentation Using threat or force to restrict fair trade in the transaction of insurance

Answer:

Making a statement that is false or maliciously critical of the financial condition of an insurer Question 10: A Universal Life policyowner must receive a notice of cash surrender value at LEAST every

• months

year

• years
• years

Answer:

year Question 11: Which of these would limit a company's liability to provide insurance coverage?Waiver Exclusion Rider Provision

Answer:

Exclsuion Question 12: The period in which there are no Social Security benefits for the surviving spouse is called the blackout period elimination period ineligible period dependency period

Answer:

Blackout period Question 13: a life insurance policy that contains a guaranteed interest rate with the chance to earn a rate that is higher than the guaranteed rate is called whole life group life credit life universal life

Answer:

universal life Question 14: Which of the following is considered to be an act of misrepresentation?Sharing commissions with other licensed producers Replacing an existing policy with a new one Giving back part of a producers commission as an incentive for a sale Falsifying the terms, benefits, advantages, or conditions of an insurance policy

Answer:

Falsifying the terms, benefits, advantages, or conditions of an insurance policy Question 15: An individual who removes the risk of losing money in the stock market by never purchasing stocks is said to be engaging in Risk reduction Risk Transference Risk avoidance Risk retention

Answer:

Risk avoidance Question 16: 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

Answer:

Determine financial strength of an insurance company