Michigan Life Insurance State Exam Practice Test

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Michigan Life Insurance State Exam Practice Test with Answer Key | Latest

Question 1: Which is TRUE regarding the annuitant, when the

annuitant is NOT the policy owner?

• The annuitant has the right to name the beneficiary
• The annuitant is the person paying the premiums
• The cash value is available to the annuitant for withdrawals
• Annuity payments will be based on the annuitants life

expectancy

CORRECT ANSWER : 4. Annuity payments will be based on

the annuitants life expectancy

Question 2: Signing an applicants name for insurance is known

as...?

• Concealment
• Defamation
• Coercion
• Forgery

CORRECT ANSWER : 4. Forgery

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Question 3: Failure to pay a penalty assessed by the

commissioner may result in...?

• Revoked or suspended license
• Require the license to retake the examination
• Complete 5 extra hours of continuing education
• 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?

• Buy-sell agreement
• Key employee life insurance
• Business continuation
• Accidental death

CORRECT ANSWER : 1. Buy-sell agreement

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Question 5: Policy owner surrenders a policy for its cash value,

when is tax liability incurred?

• The cash value exceeds all premiums paid
• The cash value is less than premiums paid
• The policy is exchanged for a policy of equal value
• 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?

• At time of claim
• At time of application
• In event of a policy loan
• Within the first year of death

CORRECT ANSWER : 2. At the time of application

Question 7: Which of the following best describes a single

premium cash policy?

• It requires only one payment to make the policy paid up

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• It provides for only one premium to be paid without evidence

of insurability

• It waives one future premium of the owner becomes disabled
• 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...

• Premiums are taxable
• Death benefits are taxable
• The insurance must be incidental to the plan
• 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?

• It increase the premium annually during the first several years

of the policy