MICHIGAN LIFE INSURANCE STATE
COMPREHENSIVE EXAMINATION TEST 2026
QUESTIONS WITH ANSWERS 100% CORRECT
◉ Bob and Tom start a business. Since each partner contributes an
important element to the success of the business, they decide to take
life insurance policies out on each other, and name each other as
beneficiaries. Eventually, they retire and dissolve the business. Bob
dies 12 months later. The policies continue in force with no change.
Both partners are still married at the time of Bob's death. In this
situation, who will receive Bob's policy proceeds?
Toms estate
Bobs estate
Bobs spouse
Tom. Answer: Tom
◉ Michigan requires that a licensee complete __ hours of continuing
education on the subject of ethics every reporting period
1
,2
3
4. Answer: 3
◉ What kind of insurance policy issued by a mutual insurer provides
a return of divisible surplus?
Nonparticipating life insurance policy
participating life insurance policy
divisible surplus life insurance policy
straight life insurance policy. Answer: Participating life insurance
policy
◉ Which of these would limit a company's liability to provide
insurance coverage?
Waiver
Exclusion
Rider
,Provision. Answer: Exclsuion
◉ How do insurers predict the increase of individual risks?
Law of large numbers
U.S. Census
Average mortality incidents
Experience of morbidity. Answer: Law of large numbers
◉ Pre-death distributions from a modified endowment contract
(MEC) receive different tax treatment than other life insurance
policies because
the MEC has tax deductible premiums
the MEC is considered an illegal product
the MEC tends to be an investment vehicle
, the MEC does not accumulate cash value. Answer: the MEC tends to
be an investment vehicle
◉ Peter has a policy where 80% to 90% of the premium is invested
in traditional fixed income securities and the remainder of the
premium is invested in contracts tied to a stipulated stock index.
What kind of policy is this?
Modified Endowment Contract
Current assumptive whole life
Credit life insurance
Equity index whole life. Answer: Equity index whole life
◉ A life insurance rider that allows an individual to purchase
insurance as they grow older, regardless of insurability is called a(n)
guaranteed term rider
guaranteed insurability rider
accelerated benefit rider
cost of living rider. Answer: guaranteed insurability rider
COMPREHENSIVE EXAMINATION TEST 2026
QUESTIONS WITH ANSWERS 100% CORRECT
◉ Bob and Tom start a business. Since each partner contributes an
important element to the success of the business, they decide to take
life insurance policies out on each other, and name each other as
beneficiaries. Eventually, they retire and dissolve the business. Bob
dies 12 months later. The policies continue in force with no change.
Both partners are still married at the time of Bob's death. In this
situation, who will receive Bob's policy proceeds?
Toms estate
Bobs estate
Bobs spouse
Tom. Answer: Tom
◉ Michigan requires that a licensee complete __ hours of continuing
education on the subject of ethics every reporting period
1
,2
3
4. Answer: 3
◉ What kind of insurance policy issued by a mutual insurer provides
a return of divisible surplus?
Nonparticipating life insurance policy
participating life insurance policy
divisible surplus life insurance policy
straight life insurance policy. Answer: Participating life insurance
policy
◉ Which of these would limit a company's liability to provide
insurance coverage?
Waiver
Exclusion
Rider
,Provision. Answer: Exclsuion
◉ How do insurers predict the increase of individual risks?
Law of large numbers
U.S. Census
Average mortality incidents
Experience of morbidity. Answer: Law of large numbers
◉ Pre-death distributions from a modified endowment contract
(MEC) receive different tax treatment than other life insurance
policies because
the MEC has tax deductible premiums
the MEC is considered an illegal product
the MEC tends to be an investment vehicle
, the MEC does not accumulate cash value. Answer: the MEC tends to
be an investment vehicle
◉ Peter has a policy where 80% to 90% of the premium is invested
in traditional fixed income securities and the remainder of the
premium is invested in contracts tied to a stipulated stock index.
What kind of policy is this?
Modified Endowment Contract
Current assumptive whole life
Credit life insurance
Equity index whole life. Answer: Equity index whole life
◉ A life insurance rider that allows an individual to purchase
insurance as they grow older, regardless of insurability is called a(n)
guaranteed term rider
guaranteed insurability rider
accelerated benefit rider
cost of living rider. Answer: guaranteed insurability rider
