FINAL EXAM MICHIGAN LIFE AND HEALTH
EXAM SCRIPT 2026 FULL SOLUTION PRACTICE
◉ Business overhead expense policy. Answer: Which type of
business insurance is meant to cover the costs of continuing to do
business while the owner is disabled?
◉ the protection ends. Answer: Dorian exercised a nonforfeiture
option by using his life policy's cash value to purchase an extended
term insurance option. When the term insurance expires,
◉ must have an appointed guardian. Answer: To receive proceeds
from a death benefit, a minor
◉ The insurer's obligation to pay a death benefit upon an approved
death claim. Answer: Under a life insurance policy, what does the
insuring clause state?
◉ When contribution or participation rules have been violated.
Answer: When can a group health policy renewal be denied
according to the Health Insurance Portability and Accountability Act
(HIPAA)?
,◉ It allows for cash advances to be paid against the death benefit if
the insured becomes terminally ill. Answer: What is the purpose for
having an accelerated death benefit on a life insurance policy?
◉ Variable universal policy. Answer: Which type of life insurance
offers flexible premiums, a flexible death benefit, and the choice of
how the cash value will be invested?
◉ 1 month. Answer: An immediate annuity has been purchased with
a single premium. When does the annuitant typically begin receiving
benefit payments?
◉ an authorized agency makes a written request to the insurer
during an insurance fraud investigation. Answer: Consumer privacy
regulations permit the release of an insured's financial information
when
◉ the right to return the policy for a full refund within a specified
number of days. Answer: The free-look provision gives the
policyowner
◉ Net death benefit will be reduced if the loan is not repaid. Answer:
Joanne has a $100,000 whole life policy with an accumulated
$25,000 of cash value. She would like to borrow $15,000 against the
cash value. Which of the following statements is TRUE?
,◉ modified application with a new signature. Answer: Tara the
producer is delivering a specified disease insurance policy to a new
policyowner. Upon delivery, she may be expected to collect all of the
following EXCEPT a(n)
◉ Annuitization phase. Answer: Which of the following is
considered to be the period when the accumulated value in an
annuity is paid out?
◉ Department of Insurance and Financial Services (DIFS). Answer:
The entity that has the power to revoke a producer's insurance
license is the
◉ The shorter the payment period, the higher the premium. Answer:
The statement which best describes the relationship between the
premiums of a whole life policy and the premium payment period is
◉ universal life. Answer: A life insurance policy that is subject to a
contract interest rate is referred to as
◉ Average age. Answer: Which of these factors would an insurer
consider when determining whether to accept a group life plan?
, ◉ is eligible for coverage upon hire. Answer: According to HIPAA,
when an insured individual leaves an employer and immediately
begins working for a new company that offers group health
insurance, the individual
◉ $5,000. Answer: An insured has a stop-loss limit of $5,000, a
deductible of $500, and an 80/20 coinsurance. The insured incurs
$25,000 of covered losses. How much will the insured have to pay?
◉ Guaranteed insurability rider. Answer: Barbara's policy includes a
rider which allows her to purchase additional insurance at specific
dates or events without evidence of insurability. This rider is called
a(n)
◉ Pay age-corrected benefits. Answer: What is an insurer required
to do when faced with an error made under the Misstatement of Age
provision?
◉ twisting. Answer: The unfair trade practice of replacing an
insurance policy from one insurer to another based on
misrepresentation is called
◉ Life annuity. Answer: Which type of annuity stops all payments
upon the death of the annuitant?
EXAM SCRIPT 2026 FULL SOLUTION PRACTICE
◉ Business overhead expense policy. Answer: Which type of
business insurance is meant to cover the costs of continuing to do
business while the owner is disabled?
◉ the protection ends. Answer: Dorian exercised a nonforfeiture
option by using his life policy's cash value to purchase an extended
term insurance option. When the term insurance expires,
◉ must have an appointed guardian. Answer: To receive proceeds
from a death benefit, a minor
◉ The insurer's obligation to pay a death benefit upon an approved
death claim. Answer: Under a life insurance policy, what does the
insuring clause state?
◉ When contribution or participation rules have been violated.
Answer: When can a group health policy renewal be denied
according to the Health Insurance Portability and Accountability Act
(HIPAA)?
,◉ It allows for cash advances to be paid against the death benefit if
the insured becomes terminally ill. Answer: What is the purpose for
having an accelerated death benefit on a life insurance policy?
◉ Variable universal policy. Answer: Which type of life insurance
offers flexible premiums, a flexible death benefit, and the choice of
how the cash value will be invested?
◉ 1 month. Answer: An immediate annuity has been purchased with
a single premium. When does the annuitant typically begin receiving
benefit payments?
◉ an authorized agency makes a written request to the insurer
during an insurance fraud investigation. Answer: Consumer privacy
regulations permit the release of an insured's financial information
when
◉ the right to return the policy for a full refund within a specified
number of days. Answer: The free-look provision gives the
policyowner
◉ Net death benefit will be reduced if the loan is not repaid. Answer:
Joanne has a $100,000 whole life policy with an accumulated
$25,000 of cash value. She would like to borrow $15,000 against the
cash value. Which of the following statements is TRUE?
,◉ modified application with a new signature. Answer: Tara the
producer is delivering a specified disease insurance policy to a new
policyowner. Upon delivery, she may be expected to collect all of the
following EXCEPT a(n)
◉ Annuitization phase. Answer: Which of the following is
considered to be the period when the accumulated value in an
annuity is paid out?
◉ Department of Insurance and Financial Services (DIFS). Answer:
The entity that has the power to revoke a producer's insurance
license is the
◉ The shorter the payment period, the higher the premium. Answer:
The statement which best describes the relationship between the
premiums of a whole life policy and the premium payment period is
◉ universal life. Answer: A life insurance policy that is subject to a
contract interest rate is referred to as
◉ Average age. Answer: Which of these factors would an insurer
consider when determining whether to accept a group life plan?
, ◉ is eligible for coverage upon hire. Answer: According to HIPAA,
when an insured individual leaves an employer and immediately
begins working for a new company that offers group health
insurance, the individual
◉ $5,000. Answer: An insured has a stop-loss limit of $5,000, a
deductible of $500, and an 80/20 coinsurance. The insured incurs
$25,000 of covered losses. How much will the insured have to pay?
◉ Guaranteed insurability rider. Answer: Barbara's policy includes a
rider which allows her to purchase additional insurance at specific
dates or events without evidence of insurability. This rider is called
a(n)
◉ Pay age-corrected benefits. Answer: What is an insurer required
to do when faced with an error made under the Misstatement of Age
provision?
◉ twisting. Answer: The unfair trade practice of replacing an
insurance policy from one insurer to another based on
misrepresentation is called
◉ Life annuity. Answer: Which type of annuity stops all payments
upon the death of the annuitant?
