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Michigan Life Insurance State Exam: Questions and Answers, Exercises of Insurance law

Northern Michigan UniversityInsurance law

A comprehensive set of questions and answers for the michigan life insurance state exam. it covers various aspects of life insurance, including annuities, policy types, insurable interest, and producer responsibilities. The questions are multiple-choice, allowing for self-assessment and preparation for the exam. This resource is valuable for those studying for the licensing exam.

Typology: Exercises

2024/2025

Available from 04/22/2025

brian-muchemi
brian-muchemi 🇺🇸

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Mi
Michigan Life Insurance State Exam
Answer Key Questions And Answers
100% Solved
LATEST 2025 UPDATE
Which is TRUE regarding the annuitant, when the annuitant is NOT the policy owner?
1. The annuitant has the right to name the beneficiary
2. The annuitant is the person paying the premiums
3. The cash value is available to the annuitant for withdrawals
4.
Annuity payments will be based on the annuitants life expectancy
✔️✔️
Annuity payments
will be
based on the annuitants life expectancy
Signing an applicants name for insurance is known as...?
1. Concealment
2. Defamation
3. Coercion
4.
Forgery
✔️✔️
4.
Forgery
Failure to pay a penalty assessed by the commissioner may result in...?
1. Revoked or suspended license
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Download Michigan Life Insurance State Exam: Questions and Answers and more Exercises Insurance law in PDF only on Docsity!

MiMichigan Life Insurance State Exam

Answer Key Questions And Answers

100% Solved

LATEST 2025 UPDATE

Which is TRUE regarding the annuitant, when the annuitant is NOT the policy owner?

  1. The annuitant has the right to name the beneficiary
  2. The annuitant is the person paying the premiums
  3. The cash value is available to the annuitant for withdrawals
  4. Annuity payments will be based on the annuitants life expectancy✔️ ✔️ Annuity payments will be based on the annuitants life expectancy Signing an applicants name for insurance is known as...?
  5. Concealment
  6. Defamation
  7. Coercion
  8. Forgery✔️ ✔️ 4. Forgery Failure to pay a penalty assessed by the commissioner may result in...?
  9. Revoked or suspended license
  1. Require the license to retake the examination
  2. Complete 5 extra hours of continuing education
  3. Pay a late charge of 1.5%✔️ ✔️ 1. Revoked or suspended license Two business business partners own life insurance, which or the following allows the surviving partner to use death benefit to purchase the deceased owners share?
  4. Buy-sell agreement
  5. Key employee life insurance
  6. Business continuation
  7. Accidental death✔️ ✔️ 1. Buy-sell agreement Policy owner surrenders a policy for its cash value, when is tax liability incurred?
  8. The cash value exceeds all premiums paid
  9. The cash value is less than premiums paid
  10. The policy is exchanged for a policy of equal value
  11. The party is transferred to a third party✔️ ✔️ 1. The cash value exceeds all premiums paid When is insurable interest required?
  12. At time of claim
  1. It increase the premium annually for the duration of the policy
  2. It increases the premium once during the duration of the policy
  3. It has lower premium for the duration of the policy✔️ ✔️ 1. It has a lower premium for the duration of the policy Which of the following is NOT true about converting a group policy into an individual policy?
  4. The converted policy must be the same amount as the group coverage
  5. Group policies must include a guarantee of conversion
  6. Coverage continues during the conversion period
  7. Proof of insurability must be required✔️ ✔️ 4. Proof of insurability must be required Before doing business under an assumed name, who must the producer first notify?
  8. Insured
  9. insurer
  10. Commissioner
  11. Insurance agency✔️ ✔️ 3. Commissioner Which writer allows you to purchase additional insurance without underwriting or specific dates?
  12. Guaranteed renewability
  1. Guaranteed insurability
  2. Cost of living
  3. Disability income✔️ ✔️ 2. Guaranteed insurability Which of the following is a life insurance contract written on the life of an individual?
  4. Insurance
  5. Survivorship policy
  6. Joint life contract
  7. Single life insurance✔️ ✔️ 4. Single life Insurance An Insurance policy lapsed due to nonpayment of premium to activate the reinstatement clause...
  8. Play the premium within 15 days of the grace period.
  9. Provide the insurer with the evidence of insurability
  10. Apply for a new life insurance policy
  11. Demonstrate the incontestable clause can be invoked✔️ ✔️ 2. Provide the insurer with the evidence of insurability Term life insurance differs from permanent life insurance in that MOST often, term life insurance...✔️ ✔️ Remains in force for a specific period of time

For a contract to be valid it MUST...✔️ ✔️ Include an offer and acceptance Which of the following not an example of a producer duties?

  1. Selling insurance
  2. Issuing and countersigning policies
  3. Collecting premiums
  4. Represent the insured✔️ ✔️ 4. Represent the insured If a producer is found guilty of signing an applications name, the commissioner can do all of the following EXCEPT...
  5. Place the producer on probation
  6. Levy a civil fine on the producer
  7. Suspend or revoke license
  8. Require the producer to tell the client✔️ ✔️ 4. Require the producer to tell the client If an annuitant is making premium payments on a periodic which type of annuity?
  9. Deferred
  10. Immediate
  11. Fixed period
  1. Fixed amount✔️ ✔️ 1. Deferred Generally If an application is not prepaid, the effective date of begins on the date the...
  2. Application is signed
  3. Application is postmarked and mailed to the insurer
  4. Company underwriter approves the risk
  5. Producer delivers the policy and collects the premium✔️ ✔️ 4. Producer delivers the policy and collects the premium Policy owner's future earning potential and determining how much of that amount would be devoted to his dependents...
  6. Loss exposure report
  7. Salary projection approach
  8. At distribution
  9. Only if there is a premature distribution✔️ ✔️ 3. At distribution What info is NOT required for a credit life insurance contract?
  10. Charge for each type of insurance being purchased
  11. Type of insurance being purchased
  1. Rebating
  2. Redlining
  3. Twisting✔️ ✔️ 2. Rebating Statement by an applicant concerning personal health history, occupation, and hobbies are referred to as?
  4. Depictions
  5. Certification
  6. Representation
  7. Personal characteristics✔️ ✔️ 4. Personal characteristics A license who informs an insurance fan inaccurate terms, benefits, or advantages of any policy is committing which of the following...?
  8. Discrimination
  9. Misrepresentation
  10. Fraud
  11. Defamation✔️ ✔️ 2. Misrepresentation Insurer's intentional relinquishment of a known right is...?
  12. An estoppel
  1. A privilege
  2. A wavier
  3. A choice✔️ ✔️ 3. A waiver Which type of life insurance policy is characterized by premiums that are fully paid within a stated period, after which no further premiums are REQUIRED...
  4. Vanishing premium
  5. Continues premium
  6. Endowment insurance
  7. Limited payment insurance✔️ ✔️ 4. Limited payment insurance Human life value approach measures which of the following...?
  8. Total lifetime earnings
  9. Total lifetime benefits
  10. Total lifetime family needs
  11. Total lifetime dividends✔️ ✔️ 3. Total lifetime family needs If a premium is NOT submitted with a life insurance application producer MUST have the applicant sign which of the following when delivering a policy?✔️ ✔️ A replacement form

Insurance applicants with an average life expectancy who represent the same risk classification as the majority of people with similar lifestyles are considered which type of risk?

  1. Declined
  2. Preferred
  3. Standard
  4. Substandard ✔️ ✔️ 3. Standard It early withdrawal before age 59 1/2 from a qualified plan is taxed in additional...?✔️ ✔️ 10% ABC insurance agency is entering each applicant who purchases insurance through their agent into a drawing to win a free trip. This is an example of ...?
  5. Illegal inducement
  6. False advertising
  7. Concealment
  8. Fraud✔️ ✔️ 1. Illegal inducement A method of handling risk such as having a sprinkler system installed in a building, is an example of...?
  9. Transfer
  10. Loss retention
  1. Risk reduction
  2. Avoidance✔️ ✔️ 3. Risk reduction In addition to the actual policy, an entire contract includes which of the following?
  3. Clauses
  4. Credit report
  5. Provisions
  6. The application✔️ ✔️ 4. The application Earnings in a Roth IRA are taxed...✔️ ✔️ At non-qualified distribution Applicant concerning personal health history, family health history, occupation referred to as...?
  7. Depictions
  8. Certifications
  9. Representations
  10. Personal characteristics✔️ ✔️ 4. Personal characteristics The grace period is a period of time...
  11. Between the death of the insured individual and the payment of benefits
  12. After the premium is paid and policy is issued
  1. Human life approach
  2. Cost of comparison approach
  3. Living benefits approach
  4. Needs approach✔️ ✔️ 1. Human life approach What is insurable interest required?
  5. At the time of a claim
  6. At time of application
  7. In the event of a policy loan
  8. Within the first year of death✔️ ✔️ 2. At time of application Which of the following is NOT an illegal inducement?
  9. Giving the insured tickets to a sporting event valued at $
  10. Giving the insured a return of a premium excess of $
  11. Giving the insured an article of merchandise printed with the producers name costing $
  12. Giving the insured a free policy of insurance resulting from the resulting sale of a related policy of insurance✔️ ✔️ 3. Giving the insured an article of merchandise printed with the producers name costing $ Which of the following is NOT true about converting a group policy to an individual policy...?
  1. The conversion amount must be the same amount as the group policy
  2. Group policies must include a guaranteed of conversion period
  3. Coverage continues during the conversion period
  4. Proof of insurability will be required✔️ ✔️ 4. Proof of insurability will be required The period during which an annuitant begins to receive income payments from an insurer is known as...?✔️ ✔️ Annuitization period All of the following are examples of flexible life insurance policies EXCEPT...?
  5. Whole life
  6. Variable life
  7. Universal life
  8. Adjustable life✔️ ✔️ 1. Whole life Which is the simplest type of life insurance plan that provides protection for a specific period of time and pays a benefit only if the insured dies during that period?
  9. Whole life insurance
  10. Level term life insurance
  11. Variable term life insurance

Upon the death of an insured individual, what does life insurance guarantee to deliver to the beneficiary?

  1. An annuity
  2. A specific sum of money
  3. A dividend
  4. A final expense fund✔️ ✔️ 2. A specific sum of money Which of the following policies has a guaranteed interest rate with the possibility to earn an interest rate higher than the guarantee rate?
  5. Renewable term
  6. Credit life
  7. Term insurance
  8. Universal life✔️ ✔️ 4. Universal life Which statement is not a characteristic of a group life insurance plan?
  9. A master contract
  10. Probationary period
  11. Individual underwriting
  12. Certificate of insurance✔️ ✔️ 3. Individual underwriting

What type of authority is given by an insurer to a provider but NOT formally communicated?

  1. Express
  2. Implied
  3. Written
  4. Apparent✔️ ✔️ 2. Implied Which of the following is an example of an unfair claim settlement practice?
  5. Delaying the settlement of claims in which liability has become clear
  6. Replacing a policy when it is in the best interest of the insured
  7. Adopting and implementing standards te settle claims in a timely matter
  8. Disclosing the settlement terms and provisions of the contract of the insured✔️ ✔️ 1. Delaying the settlement of claims in which liability has become clear Term life insurance offers pure protection...?
  9. Until the insurance policy matures
  10. For a specific period of time
  11. For the life of the policy
  12. At the highest cost of insurance✔️ ✔️ 2. For a specific period of time