Michigan Life practice 2

An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?

$50,000

A credit insurance policy must be delivered to the debtor within how many days after the indebtedness is incurred?

30 Days

Which of the following is NOT typically excluded from life policies?

Death due to plane crash for a fare-paying passenger

When must an IRA be completely distributed when a beneficiary is not named?

December 31 of the year that contains the fifth anniversary of the owner's death.

Which of the following is NOT true about a group annuity?

It can be owned by individual employees.

Which statement is NOT true regarding a Straight Life policy?

Its premium steadily decreases over time, in response to its growing cash value.

Using a class designation for beneficiaries means

Naming beneficiaries as a group.

Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled?

Payor Benefit

hich type of life insurance policy generates immediate cash value?

Single Premium

In a fixed annuity, which of the following is true regarding the guaranteed interest rate on the investment?

The annuitant will receive the higher of either the guaranteed minimum rate or current rate.

An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective date?

The date of medical exam

An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT?

The insured may choose to convert to term or permanent individual coverage.

The Medical Information Bureau (MIB) was created to protect

Insurance companies from adverse selection by high risk persons.

The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose?

Interest only option

All of the following are characteristics of group life insurance EXCEPT

Premiums are determined by the age, sex and occupation of each individual certificate holder.

Which of the following are generally NOT considered when underwriting group insurance?

The insureds' medical history

What is the advantage of reinstating a policy instead of applying for a new one?

The original age is used for premium determination

Which of the following best describes what the annuity period is?

The period of time during which accumulated money is converted into income payments

Under an extended term nonforfeiture option, the policy cash value is converted to

The same face amount as in the whole life policy.

What kind of policy allows withdrawals or partial surrenders?

Universal life

Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?

Warranty

A banker is ready to close on a customer's loan. The bank is prepared to offer the loan but only if the customer purchases a life insurance policy from the bank in the amount of the loan. This is an example of

coerocion

Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income?

depreciation period

An employee quits her job where she has a balance of $10,000 in her qualified plan. The balance was paid out directly to the employee in order for her to move the funds to a new account. If she decides to rollover her plan to a Traditional IRA, how much will she receive from the plan administrator and how long does she have to complete the tax-free rollover?

$8,000, 60 days

For how many years is an insurer required to maintain a complete file of its advertisements?

4 years

Which of the following is NOT an allowable 1035 exchange?

A whole life insurance policy is exchanged for a term insurance policy.

All of the following are TRUE of the federal tax advantages of a qualified plan EXCEPT

At distribution, all amounts received by the employee are tax free.

All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT

Dividends from a mutual insurer.

Circulating deceptive sales material to the public is what type of Unfair Trade Practice?

False advertising

Which authority is NOT stated in an agent's contract but is required for the agent to conduct business?

Implied

Which of the following would be considered false advertising?

Implying that the agent is the insurer