Michigan Life and Health

Which of the following giraffe from a producer would NOT be considering rebating?

$5 pen

All of the following are examples of flexible life insurance policies EXCEPT...? 1. Whole life 2. Variable life 3. Universal life 4. Adjustable life

1. Whole life

When is insurable interest required? 1. At time of claim 2. At time of application 3. In event of a policy loan 4. Within the first year of death

2. At the time of application

Insurer's intentional relinquishment of a known right is...? 1. An estoppel 2. A privilege 3. A wavier 4. A choice

3. A waiver

Before doing business under an assumed name, who must a producer first notify? 1. Insured 2. Insurer 3. Commissioner 4. Insurance agency

3. Commissioner

Which statement is not a characteristic of a group life insurance plan? 1. A master contract 2. Probationary period 3. Individual underwriting 4. Certificate of insurance

3. Individual underwriting

Which type of annuity guarantees a level benefit payment? 1. Variable 2. Universal 3. Limited life 4. Fixed

4. Fixed

Earnings in a Roth IRA are taxed...

At non-qualified distribution

Failure of an insurance producer to timely remit premiums to an insurer? 1. A fiduciary violation 2. Material misrepresentation 3. Illegal inducement 4. A debating violation

1. A fiduciary violation

Which of following statement is NOT true regards to the waiver of premium rider? 1. An additional premium is charged for this rider 2. The face amount is reduced by the amount of premiums paid 3. The policy remains in force exactly as if premiums are being paid 4. There is a waiting period of 6 months before premiums are paid

1. An additional premium is charged for this rider

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? 1. Buy-sell agreement 2. Key employee life insurance 3. Business continuation 4. Accidental death

1. Buy-sell agreement

If an annuitant is making premium payments on a periodic which type of annuity? 1. Deferred 2. Immediate 3. Fixed period 4. Fixed amount

1. Deferred

Which of the following is an example of an unfair claim settlement practice? 1. Delaying the settlement of claims in which liability has become clear 2. Replacing a policy when it is in the best interest of the insured 3. Adopting and implementing standards te settle claims in a timely matter 4. Disclosing the settlement terms and provisions of the contract of the insured

1. Delaying the settlement of claims in which liability has become clear

Which approach considers the future needs of the survivors in determining amounts of life insurance? 1. Human life approach 2. Cost of comparison approach 3. Living benefits approach 4. Needs approach

1. Human life approach

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 ...? 1. Illegal inducement 2. False advertising 3. Concealment 4. Fraud

1. Illegal inducement

Option that allows proceeds to remain with the insured and earnings to be paid to a beneficiary on a monthly basis...? 1. Interest only 2. Lump sum 3. Fixed period 4. Fixed amount

1. Interest only

How does a graded premium whole life policy differ from a modified premium? 1. It increase the premium annually during the first several years of the policy 2. It increase the premium annually for the duration of the policy 3. It increases the premium once during the duration of the policy 4. 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 best describes a single premium cash policy? 1. It requires only one payment to make the policy paid up 2. It provides for only one premium to be paid without evidence of insurability 3. It waives one future premium of the owner becomes disabled 4. It requires the policy owner to pay one premium annually

1. It requires only one payment to make the policy paid up

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? 1. Whole life insurance 2. Level term life insurance 3. Variable term life insurance 4. Ordinary life insurance

1. Level term life insurance

Which of the following is a provision is an interest- sensitive life policy which allows the policy owner to withdraw the policies cash value interest fee? 1. Partial surrender 2. Automatic premium waiver 3. Waiver of premium 4. Spendthrift clause

1. Partial surrender

When life insurance is funded by contributions to a qualified retirement... 1. Premiums are taxable 2. Death benefits are taxable 3. The insurance must be incidental to the plan 4. Death benefits are paid to the employer

1. Premiums are taxable

Which nonforfeiture option allows the policy owner to purchase less coverage for life? 1. Reduced paid-up insurance 2. Cash surrender value 3. Settlement value 4. Extended term

1. Reduced paid-up insurance

Failure to pay a penalty assessed by the commissioner may result in...? 1. Revoked or suspended license 2. Require the license to retake the examination 3. Complete 5 extra hours of continuing education 4. Pay a late charge of 1.5%

1. Revoked or suspended license

If the annuitant dies before the annuity start date, the interest earned is... 1. Taxable 2. Nontaxable 3. Never taxed 4. Taxed if the beneficiary is a spouse

1. Taxable

Policy owner surrenders a policy for its cash value, when is tax liability incurred? 1. The cash value exceeds all premiums paid 2. The cash value is less than premiums paid 3. The policy is exchanged for a policy of equal value 4. The party is transferred to a third party

1. The cash value exceeds all premiums paid

When if ever are the earnings on a non-qualified annuity taxed... 1. Upon withdrawals of the contract value 2. Upon the death of the beneficiary 3. As payments are contributed 4. Earnings are not taxable

1. Upon withdrawals of the contract value

Which of the following is true of a payor benefit rider... 1. Waives premiums on a juvenile policy if the policy owner becomes disabled or dies 2. Pays a monthly income to the policy owner if the insured is totally disabled 3. Waives policy premiums if the insured become totally disabled 4. Increases the value of the policy if the policy owner dies

1. Waives premiums on a juvenile policy if the policy owner becomes disabled or dies

It early withdrawal before age 59 1/2 from a qualified plan is taxed in additional...?

10%

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 is TRUE regarding 1035 exchange? 1. Because of complexity, 1035 exchanges are seldom 2. An exchange for another policy or annuity generally voids taxes 3. An exchange for lesser value policy or annuity generally avoids any taxes 4. Whether or not life insurance premiums are deductible depends on the income of the place holder

2. An exchange for another policy or annuity generally avoids any taxes

What is insurable interest required? 1. At the time of a claim 2. At time of application 3. In the event of a policy loan 4. Within the first year of death

2. At time of application

How can the insured prevent the face amount of a life insurance policy from being subjected to the federal estate tax? 1. By assigning the policy at least 3 years before death 2. By naming the insured estate as the beneficiary 3. By remaining the policy holder until death 4. By taking policy loans from cash value

2. By naming the insured estate as the beneficiary

Term life insurance offers pure protection...? 1. Until the insurance policy matures 2. For a specific period of time 3. For the life of the policy 4. At the highest cost of insurance

2. For a specific period of time

Which writer allows you to purchase additional insurance without underwriting or specific dates? 1. Guaranteed renewability 2. Guaranteed insurability 3. Cost of living 4. Disability income

2. Guaranteed insurability

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

A license who informs an insurance fan inaccurate terms, benefits, or advantages of any policy is committing which of the following...? 1. Discrimination 2. Misrepresentation 3. Fraud 4. Defamation

2. Misrepresentation

An insurer that is owned by their policyholder and can pay annual dividends to them..? 1. Stock company 2. Mutual company 3. Fraternal insurer 4. Lloyd's of income

2. Mutual company

Which of the following is the time period which is life insurance policy is considered incontestable, assuming otherwise in good standing...? 1. Period ends after 3 years 2. Period ends after 2 years 3. Period ends after 2 months 4. For majority of the policies there is no contestability period

2. Period ends after 2 years

A document that specifies the critical segments of a purchased policy is known as...? 1. Buyers guide 2. Policy summary 3. Conditional receipt 4. Underwriters report

2. Policy summary

An Insurance policy lapsed due to nonpayment of premium to activate the reinstatement clause... 1. Play the premium within 15 days of the grace period. 2. Provide the insurer with the evidence of insurability 3. Apply for a new life insurance policy 4. Demonstrate the incontestable clause can be invoked

2. Provide the insurer with the evidence of insurability

A producer offers a potential insured 5% of their commission as an incentive to buy insurance is guilty of.... 1. Coercion 2. Rebating 3. Redlining 4. Twisting

2. Rebating

Which of the following is the time period after which a life insurance policy is considered incontestable? 1. The contestability period ends after 3 years 2. The contestability period ends after 2 years 3. The contestability period ends after 2 months 4. For the majority of policies there is no contestability period

2. The contestability period ends after 2 years

Which statement is NOT true about the waiver of premium rider? 1. An additional premium is charged for the rider 2. The face amount is reduced by the amount of premium paid 3. The policy remains in force exactly as if premiums are being paid 4. There is a waiting period of 6 months before premiums are waived

2. The face amount is reduced by the amount of premium paid

Not required for credit insurance? 1. Charge for each type of insurance being purchased 2. Type of insurance being purchased 3. Post claim underwriting date 4. Insurer name

2. Type of insurance being purchased

What info is NOT required for a credit life insurance contract? 1. Charge for each type of insurance being purchased 2. Type of insurance being purchased 3. Post claim underwriting date 4. Insurer name

2. Type of insurance being purchased

Differed commissions may be paid to a person who sold an insurance policy when the person...? 1. Was a licensed broker at the time of the sale 2. Was a licensed producer at the time of the sale 3. Passed the examination and applied for a producer license at the time of the sale 4. Passed the examination and applied for a solicitor license at the time of the sale

2. Was a licensed producer at the time of the sale

Maximum penalty commissioner can fine a producer? 1. 2,500 2. 5,000 3. 10,000 4. 7,500

3. 10,000

Which of the following individuals is REQUIRED to be licensed as an insurance counselor in the state of Michigan...? 1. An insurer officer or director 2. An individual selling insurance policies 3. A person providing insurance advice to a person of business for a fee 4. An employee working for an independent insurance agency performing non-insurance duties

3. A person providing insurance advice to a person of business for a fee

Group life underwriting protects from? 1. Risk selection 2. Medical underwriting 3. Adverse selection 4. Risk underwriting

3. Adverse selection

A type of life Insurance policy that offers the policy owner the options to adjust the policies face amount, and premium without having to complete a new application or have a new policy inssued? 1. A modified whole life policy 2. A modified term life policy 3. An adjustable life policy 4. A variable life policy

3. An adjustable life policy

A whole life policy that offers the policy owner ability to adjust face amount l, premium and length without having to complete a new application...? 1. A modified whole life policy 2. A modified term life policy 3. An adjustable life policy 4. A variable life policy

3. An adjustable life policy

Policy owner's future earning potential and determining how much of that amount would be devoted to his dependents... 1. Loss exposure report 2. Salary projection approach 3. At distribution 4. Only if there is a premature distribution

3. At distribution

Which term describes naming a contingent beneficiary as "all of my children"? 1. Successive beneficiary 2. Tertiary designation 3. Class designation 4. Trust arrangement

3. Class designation

Before doing business under an assumed name, who must the producer first notify? 1. Insured 2. insurer 3. Commissioner 4. Insurance agency

3. Commissioner

Which of the following is NOT an illegal inducement? 1. Giving the insured tickets to a sporting event valued at $100 2. Giving the insured a return of a premium excess of $25 3. Giving the insured an article of merchandise printed with the producers name costing $5 4. 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 $5

How data reported and maintained on applicants for life or health by medical information? 1. In code symbols to preserve confidentiality 2. In public database with meme er insurance companies reporting data 3. In physician maintained database accessible by insurance companies and medical practitioners 4. As secured historical data to be purchased by member insurance companies seeking to enforce adverse underwriting

3. In physician maintained database accessible by insurance companies and medical practitioners

An insurance policy is a on lateral contract because ONLY the...? 1. Insured pays the premium 2. Insured is legally bound 3. Insurer is legally bound 4. Insurer can cancel the policy

3. Insurer is legally bound

Following is a characteristic of a level premium term life insurance... 1. It provides for lower benefits 2. It can be used for cash value 3. It matches the level amount of protection on the insureds life expectancy 4. The cost of insurance is averaged throughout the life of the contract

3. It matches the level amount of protection on the insureds life expectancy

An insured had a 5-year renewable term life insurance policy. Upon exercising the renewable privilege, the insured MUST... 1. Provide evidence of insurability 2. Renew for at least 10 years 3. Pay an annual premium that may be higher 4. Convert to a whole life policy

3. Pay an annual premium that may be higher

A method of handling risk such as having a sprinkler system installed in a building, is an example of...? 1. Transfer 2. Loss retention 3. Risk reduction 4. Avoidance

3. Risk reduction

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

Which of the following is the concept of term life insurance? 1. Term life insurance accumulates cash value 2. Term life insurance pays an annual divided 3. Term life insurance provides low cost pure protection 4. Term life insurance provides for a permanent death benefit

3. Term life insurance provides low cost pure protection

In contract law, legal purposes refer to the fact that...? 1. The contract must be personal 2. There must be consideration on the part of both parties 3. The reason for entering into a contract must be lawful 4. The parties entering the contract must be competent

3. The reason for entering into a contract must be lawful

Human life value approach measures which of the following...? 1. Total lifetime earnings 2. Total lifetime benefits 3. Total lifetime family needs 4. Total lifetime dividends

3. Total lifetime family needs

A whole life policy is replaced with an annuity without incurring a tax penalty? 1. Cross purchase plan 2. An endowment contract 3. A transfer of value 4. A 1035 exchange

4. A 1035 exchange

The grace period is a period of time... 1. Between the death of the insured individual and the payment of benefits 2. After the premium is paid and policy is issued 3. After the premium is received and before the policy is based 4. After the premium is due but while policy remains in force

4. After the premium is due but while policy remains in force

Prior to annuitization what is the non-forfeiture value of an annuity? 1. Only premium vested in the account for 3 years 2. All premiums paid 3. As payments are contributed 4. Earnings are not taxable

4. All premiums paid minus any withdrawals and surrender charges

All of the following policies qualify for 1035 exchange EXCEPT? 1. A whole life policy to another whole life policy 2. A whole life policy to an annuity 3. An annuity to another annuity 4. An annuity to a whole life policy

4. An annuity to a whole life policy

Consumer privacy regulations permits the release of an insured's financial information when? 1. A distant relative requests financial info in writing 2. The depth of energy labor and economic growth makes a written request to the insurer for employment purposes 3. A creditor requests info in writing to approve a line of credit 4. An authorized agency makes a written request to the insurer during an insurance fraud investigation

4. An authorized agency makes a written request to the insurer during an insurance fraud investigation

If an applicant purchases a life insurance policy to avoid forced sale of his assets what is this called? 1. Buy-sell funding 2. Capital retention 3. Capital liquidation 4. Estate conservation

4. Estate conservation

Signing an applicants name for insurance is known as...? 1. Concealment 2. Defamation 3. Coercion 4. Forgery

4. Forgery

When a beneficiary inherits a traditional IRA, which of the following is TRUE about taxation when the money is withdrawn? The beneficiary pays...? 1. No tax 2. An estate tax 3. Capital gains tax 4. Income tax

4. Income tax

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... 1. Vanishing premium 2. Continues premium 3. Endowment insurance 4. Limited payment insurance

4. Limited payment insurance

Providing incorrect, misleading, incomplete, or materially untrue information... 1. Twisting 2. Redlining 3. Misappropriation 4. Misinterpretation

4. Misinterpretation

A license can disclose a consumer's policy account number to all of the following EXCEPT...? 1. Member in an affinity program that was identified to the consumers 2. Service provider marketing on behalf of the license 3. Consumer reporting cause 4. Nonaffiliated third party

4. Nonaffiliated third party

Applicant concerning personal health history, family health history, occupation referred to as...? 1. Depictions 2. Certifications 3. Representations 4. Personal characteristics

4. Personal characteristics

Statement by an applicant concerning personal health history, occupation, and hobbies are referred to as? 1. Depictions 2. Certification 3. Representation 4. Personal characteristics

4. Personal characteristics

Which of the following statements is TRUE concerning classification of risk? 1. Substandard applications are never issued policies 2. Rated policies merit lower premium 3. A preferred individual is issued a rated policy 4. Preferred risk pay a lower premium than standard risks

4. Preferred risk pay a lower premium than standard risks

Which of the following statements is TRUE concerning classifications of risk? 1. Substandard applicants are never issued policies 2. Rated policies merit lower terms 3. A preferred individual is issued a rated policy 4. Preferred risks pay a lower premium than standard risks

4. Preferred risks pay a lower premium than standard risks

Generally If an application is not prepaid, the effective date of begins on the date the... 1. Application is signed 2. Application is postmarked and mailed to the insurer 3. Company underwriter approves the risk 4. Producer delivers the policy and collects the premium

4. Producer delivers the policy and collects the premium

Which of the following is NOT true about converting a group policy into an individual policy? 1. The converted policy must be the same amount as the group coverage 2. Group policies must include a guarantee of conversion 3. Coverage continues during the conversion period 4. Proof of insurability must be required

4. Proof of insurability must be required

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

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... 1. Place the producer on probation 2. Levy a civil fine on the producer 3. Suspend or revoke license 4. Require the producer to tell the client

4. Require the producer to tell the client

Which of the following is NOT a right if the insurance policy owner? 1. Assign or transfer the policy 2. Borrow from the cash value 3. Select and chance a beneficiary 4. Revoke an absolute assignment

4. Revoke an absolute assignment

Premium payments for a universal life policy are NOT used for which of the following...? 1. Loading Cost 2. Death protection 3. Cash value accumulation 4. Separate account investments

4. Separate account investments

Which of the following is a life insurance contract written on the life of an individual? 1. Insurance 2. Survivorship policy 3. Joint life contract 4. Single life insurance

4. Single life Insurance

Which type of insurance is sometimes referred to as a non participating company? 1. Reciprocal insurer 2. Fraternal insurer 3. Mutual insurer 4. Stock insurer

4. Stock insurer

In addition to the actual policy, an entire contract includes which of the following? 1. Clauses 2. Credit report 3. Provisions 4. The application

4. The application

Which of the following does NOT describes a defining characteristics of a whole life policy? 1. The policy accumulates cash value 2. The policy is designed to provide coverage for life 3. The face amount of the policy remains the same over time 4. The death benefit is in force for a specific period of time

4. The death benefit is in force for a specific period of time

Who can surrender an annuity during the accumulation period? 1. The company 2. The beneficiary 3. The annuitant 4. The policy owner

4. The policy owner

When an insured desires to give specific directions on how proceeds are distributed including to minors most appropriate beneficiary? 1. Class 2. Estate 3. Individual 4. Trust

4. Trust

Which of the following policies has a guaranteed interest rate with the possibility to earn an interest rate higher than the guarantee rate? 1. Renewable term 2. Credit life 3. Term insurance 4. Universal life

4. Universal life

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

The period during which an annuitant begins to receive income payments from an insurer is known as...?

Annuitization period

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

For a contract to be valid it MUST...

Include an offer and acceptance

Which of the following statement BEST describes a single premium cash value policy?

It requires one payment to make the policy paid up

Term life insurance differs from permanent life insurance in that MOST often, term life insurance...

Remains in force for a specific period of time

Which activity does NOT require an insurance producer's license?

Underwriting