Michigan Life Insurance State Exam | 150 Questions and Answers 100% Correct Question : Under a traditional IRA, interest is taxed: Only if withdrawn prior to age 59 1/2 According to the capital gains rate Upon distribution During the accumulation phase
Correct answer: Upon distribution
Question : Which of these statements concerning Traditional
IRAs is CORRECT?Earnings are not taxable when withdrawn Earnings are taxable when withdrawn Contribution are never tax deductible Contributions are always made by the employer
Correct answer: Earnings are taxable when withdrawn
Question : Which of these describes the result of a modified
endowment contract that failed to meet the seven- pay test?Policy loans are disallowed The premium payments will be tax deductible Pre- death distributions are typically taxable Withdrawals will be prohibited
Correct answer: Pre- death distributions are typically taxable
Question : In order for a contract to be valid, it must
be filled with the state be signing and witnessed by an attorney be in writing contain offer and acceptance
Correct answer: Contain offer and acceptance
Question : Which of the following actions is REQUIRED by
a producer who is replacing an existing life insurance policy?Keep replacement records on file for at least 10 years Notify the existing insurer of the proposed replacement
Submit to the replacing insurer a list of the policies to be replaced Offer the insured a 60- day free- look period
Correct answer: Submit to the replacing insurer a list of the
policies to be replaced
Question : Who were Keogh plans designed to provide
pension benefits for?Corporate officers Public school employees The self-employed Government employees
Correct answer: The self emplyed
Question : A producer's fiduciary duty requires that
premiums are maintained in a personal bank account until remittance to insurer premiums be deposited in an interest bearing account premiums are forwarded to the insurer on a timely basis
premiums be commingled
Correct answer: Premiums are forwarded on a timely basis
Question : 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
Correct answer: Risk avoidance
Question : A type of group that has a constitution and has
been organized for purposes other than obtaining insurance is called a(n) employer group employee group association or labor group multiple coalition