MICHIGAN LIFE INSURA NCE STATE
EXAM ANSWER KEY
Question :1) Which is TRUE regarding the annuitant, when
the annuitant is NOT the policy owner?(a) The annuitant has the right to name the beneficiary (b) The annuitant is the person paying the premiums (c) The cash value is available to the annuitant for withdrawals (d) Annuity payments will be based on the annuitants life expectancy
Correct answer:Annuity payments will be based on the
annuitants life expectancy
Question :2) Signing an applicants name for insurance is
known as...?(a) Concealment (b) Defamation (c) Coercion (d) Forgery
Correct answer:4. Forgery
Question :3) Failure to pay a penalty assessed by the
commissioner may result in...?(a) Revoked or suspended license
(b) Require the license to retake the examination (c) Complete 5 extra hours of continuing education (d) Pay a late charge of 1.5%
Correct answer:1. Revoked or suspended license
Question :4) 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?(a) Buy-sell agreement (b) Key employee life insurance (c) Business continuation (d) Accidental death
Correct answer:1. Buy-sell agreement
Question :5) Policy owner surrenders a policy for its cash
value, when is tax liability incurred?(a) The cash value exceeds all premiums paid (b) The cash value is less than premiums paid (c) The policy is exchanged for a policy of equal value (d) The party is transferred to a third party
Correct answer:1. The cash value exceeds all premiums paid
Question :6) When is insurable interest required?
(a) At time of claim (b) At time of application
(c) In event of a policy loan (d) Within the first year of death
Correct answer:2. At time of application
Question :7) Which of the following best describes a single
premium cash policy?(a) It requires only one payment to make the policy paid up (b) It provides for only one premium to be paid without evidence of insurability (c) It waives one future premium of the owner becomes disabled (d) It requires the policy owner to pay one premium annually
Correct answer:1. It requires only one payment to make the
policy paid up
Question :8) When life insurance is funded by contributions
to a qualified retirement...(a) Premiums are taxable (b) Death benefits are taxable (c) The insurance must be incidental to the plan (d) Death benefits are paid to the employer
Correct answer:1. Premiums are taxable
Question :9) How does a graded premium whole life policy
differ from a modified premium?
(a) It increase the premium annually during the first several years of the policy (b) It increase the premium annually for the duration of the policy (c) It increases the premium once during the duration of the policy (d) It has lower premium for the duration of the policy
Correct answer:1. It increase the premium annually during
the first several years of the policy
Question :10) Which of the following is NOT true about
converting a group policy into an individual policy?(a) The converted policy must be the same amount as the group coverage (b) Group policies must include a guarantee of conversion (c) Coverage continues during the conversion period (d) Proof of insurability must be required
Correct answer:4. Proof of insurability must be required
Question :11) Before doing business under an assumed name,
who must the producer first notify?(a) Insured (b) insurer (c) Commissioner (d) Insurance agency