FINAL EXAM-MICHIGAN LIFE AND HEALTH / / LATEST VERSION 2025-2026 /QUESTIONS AND CORRECT ANSWERS / A GRADE SCORE
SOLUTION
What amount will be paid under a policy where the insured misstated his/her age? ✔️an amount the premium would have purchased at the
correct age
the acceptance of a credit life application requires the submission of a certificate of insurance to the insured within_____ days ✔️30 days
which of these is considered to be a Living benefit option in a life insurance policy ✔️Accelerated death benefit
loans obtained by a policy owner against the cash value of a life insurance policy ✔️would not be treated as taxable income
A long term care policy typically provides all of the following levels of care EXCEPT ✔️acute care
the elimination period under a hospital indemnity plan is ✔️the specific # of days an insured must wait before becoming eligible to receive
benefits for each hospitalization
what is an insurance policy's grace period? ✔️Period of time after the premium is due but the policy remains in force
How do interest earnings accumulate in a deferred annuity ✔️On a tax-deferred basis
a licensee who is required to take continuing education Must include how many ethics coursework hours ✔️3
the automatic premium loan provision authorizes an insurer to withdraw from a policy's cash value the amount of ✔️Past due premiums that
have not been paid by the end of the grace period
health insurance involves two perils, accident and ______ ✔️sickness
Who is responsible for assembling the policy forms for insureds ✔️Insurance carriers
a securities license is required for a life insurance producer to sell ✔️variable life insurance
Which of the following is NOT an illegal inducement ✔️giving the insured an article of merchandise printed with the producers name costing 5$
Which of the following is NOT a federal requirement of a qualified plan? ✔️employee must be able to make unlimited contributions
Which dividend option would an insurer invest the policy owner's money and add any interest earnings as the dividends accrue?
✔️Accumulation at interest option
a health insurance policy will typically cover ✔️preventative health services
a life insurance policy owner was injured in a car accident which results in a total and permanent disability. which rider would pay a monthly
amount because of this disability? ✔️Disability income rider
in addition to the actual policy, an entire contract includes which of the following? ✔️the application
field underwriting preformed by the producer involves ✔️completing the application and collecting initial premium
Kathy pays a monthly premium on her health insurance policy. How long is her grace period? ✔️10 days
Pierre is covered by his employer's group major medical plan. His employer pays for 75% of the premium and he pays for 25%. How much
would a $10,000 benefit be taxable as income under this plan? ✔️0$
-benefits that fall under a major medical plan are considered to be a reimbursement for a loss, and is not taxable as income
After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms? ✔️file a written proof of loss
Under long term care insurance, which of the following MUST an insurer offer to each policy owner at the time of purchase? ✔️An inflation
protection feature
What is the primary factor that determines the benefits paid under a disability income policy? ✔️Wages
, What is the tax liability for employer contributions in Health Savings Accounts (HSA's)? ✔️No tax payment needed
-Employer paid contributions to HSA's are tax free to the employee
In the state of MI, properly filed health claims are not timely paid require the insurer to pay simple interest from a date 60 days from
satisfactory proof of loss at the rate of? ✔️12% annum
In MI, legal action can be taken against an insurer for failure to pay HEALTH insurance claims for a period not to exceed ✔️3 years
Donald is the primary insured of life insurance policy and adds a children's term rider. What is the advantage of adding this rider? ✔️Can be
converted to permanent coverage without evidence of insurability
-An advantage of a children's term rider is the ability to convert to permanent insurance without evidence of insurability
When an insured changes to a more hazardous occupation, which disability policy provision allows an insurer to adjust policy benefits and
rates? ✔️Change of occupation provision
The unfair trade practice of replacing an insurance policy from one insurer to another based on misrepresentation is called? ✔️Twisting
Which type of coverage pays an amount per day for hospitalization directly to the insured regardless of the insured's other health insurance?
✔️Hospital Indemnity
What kind of life insurance policy covers two or more people with the death benefit payable upon the last person's death? ✔️Last Survivor Life
Insurance
Which of these premium payment frequencies is not typically available to a policyowner? ✔️Bi-weekly
Variable life insurance and Universal life insurance are very similar. Which of these features are held exclusively by variable universal life
insurance? ✔️Policyowner has the right to select the investment which will provide the greatest return
Consumer privacy regulations permit the release of an insured's financial information when? ✔️An authorized agency makes a written request
to the insurer during an insurance fraud investigation
Which type of life insurance policy pays the face amount at the end of the specified period if the insured is still alive? ✔️Endowment Policy
According to the Michigan Insurance Code, which of the following MUST a producer do when replacing a Life Insurance Policy? ✔️Submit to the
replacing insurer a list of all Life Insurance policies or annuity contracts proposed to be replaced
A policy owner suffers an injury the renders him incapable of performing one or more important job duties. Any decrease in income resulting
from this injury would make him eligible for benefits under which provision? ✔️Partial Disability
A pharmacy benefit covers prescription drugs derived from list called a(n) ✔️Drug Formulary
All of the following are examples of a Business Continuation Plan except ✔️Deferred Compensation
Which of the following actions MUST be taken by producers ✔️Pay premiums due to insurers on a timely basis
Rob has a benefit at work which enables him to defer his current receipt of income and have it paid at a later date, when he will probably be in
a lower tax bracket. Which benefit fits his description? ✔️Deferred Compensation Option
What does the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 allow an employee to do? ✔️In the event of employment
termination, group health insurance can be kept if the employee pays the premiums
Distribution from a Health Savings Account (HSA) for qualified medical expenses are ✔️Tax Free
An indemnity plan limitation that will pay the dental bills after a small amount is paid by the insured is called ✔️Coinsurance
A notice of cash surrender value must be sent to a Universal Life policy owner ✔️At least Annually
The term which describes the fact that both parties of a contract may NOT receive the same value is referred to as ✔️Aleatory
SOLUTION
What amount will be paid under a policy where the insured misstated his/her age? ✔️an amount the premium would have purchased at the
correct age
the acceptance of a credit life application requires the submission of a certificate of insurance to the insured within_____ days ✔️30 days
which of these is considered to be a Living benefit option in a life insurance policy ✔️Accelerated death benefit
loans obtained by a policy owner against the cash value of a life insurance policy ✔️would not be treated as taxable income
A long term care policy typically provides all of the following levels of care EXCEPT ✔️acute care
the elimination period under a hospital indemnity plan is ✔️the specific # of days an insured must wait before becoming eligible to receive
benefits for each hospitalization
what is an insurance policy's grace period? ✔️Period of time after the premium is due but the policy remains in force
How do interest earnings accumulate in a deferred annuity ✔️On a tax-deferred basis
a licensee who is required to take continuing education Must include how many ethics coursework hours ✔️3
the automatic premium loan provision authorizes an insurer to withdraw from a policy's cash value the amount of ✔️Past due premiums that
have not been paid by the end of the grace period
health insurance involves two perils, accident and ______ ✔️sickness
Who is responsible for assembling the policy forms for insureds ✔️Insurance carriers
a securities license is required for a life insurance producer to sell ✔️variable life insurance
Which of the following is NOT an illegal inducement ✔️giving the insured an article of merchandise printed with the producers name costing 5$
Which of the following is NOT a federal requirement of a qualified plan? ✔️employee must be able to make unlimited contributions
Which dividend option would an insurer invest the policy owner's money and add any interest earnings as the dividends accrue?
✔️Accumulation at interest option
a health insurance policy will typically cover ✔️preventative health services
a life insurance policy owner was injured in a car accident which results in a total and permanent disability. which rider would pay a monthly
amount because of this disability? ✔️Disability income rider
in addition to the actual policy, an entire contract includes which of the following? ✔️the application
field underwriting preformed by the producer involves ✔️completing the application and collecting initial premium
Kathy pays a monthly premium on her health insurance policy. How long is her grace period? ✔️10 days
Pierre is covered by his employer's group major medical plan. His employer pays for 75% of the premium and he pays for 25%. How much
would a $10,000 benefit be taxable as income under this plan? ✔️0$
-benefits that fall under a major medical plan are considered to be a reimbursement for a loss, and is not taxable as income
After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms? ✔️file a written proof of loss
Under long term care insurance, which of the following MUST an insurer offer to each policy owner at the time of purchase? ✔️An inflation
protection feature
What is the primary factor that determines the benefits paid under a disability income policy? ✔️Wages
, What is the tax liability for employer contributions in Health Savings Accounts (HSA's)? ✔️No tax payment needed
-Employer paid contributions to HSA's are tax free to the employee
In the state of MI, properly filed health claims are not timely paid require the insurer to pay simple interest from a date 60 days from
satisfactory proof of loss at the rate of? ✔️12% annum
In MI, legal action can be taken against an insurer for failure to pay HEALTH insurance claims for a period not to exceed ✔️3 years
Donald is the primary insured of life insurance policy and adds a children's term rider. What is the advantage of adding this rider? ✔️Can be
converted to permanent coverage without evidence of insurability
-An advantage of a children's term rider is the ability to convert to permanent insurance without evidence of insurability
When an insured changes to a more hazardous occupation, which disability policy provision allows an insurer to adjust policy benefits and
rates? ✔️Change of occupation provision
The unfair trade practice of replacing an insurance policy from one insurer to another based on misrepresentation is called? ✔️Twisting
Which type of coverage pays an amount per day for hospitalization directly to the insured regardless of the insured's other health insurance?
✔️Hospital Indemnity
What kind of life insurance policy covers two or more people with the death benefit payable upon the last person's death? ✔️Last Survivor Life
Insurance
Which of these premium payment frequencies is not typically available to a policyowner? ✔️Bi-weekly
Variable life insurance and Universal life insurance are very similar. Which of these features are held exclusively by variable universal life
insurance? ✔️Policyowner has the right to select the investment which will provide the greatest return
Consumer privacy regulations permit the release of an insured's financial information when? ✔️An authorized agency makes a written request
to the insurer during an insurance fraud investigation
Which type of life insurance policy pays the face amount at the end of the specified period if the insured is still alive? ✔️Endowment Policy
According to the Michigan Insurance Code, which of the following MUST a producer do when replacing a Life Insurance Policy? ✔️Submit to the
replacing insurer a list of all Life Insurance policies or annuity contracts proposed to be replaced
A policy owner suffers an injury the renders him incapable of performing one or more important job duties. Any decrease in income resulting
from this injury would make him eligible for benefits under which provision? ✔️Partial Disability
A pharmacy benefit covers prescription drugs derived from list called a(n) ✔️Drug Formulary
All of the following are examples of a Business Continuation Plan except ✔️Deferred Compensation
Which of the following actions MUST be taken by producers ✔️Pay premiums due to insurers on a timely basis
Rob has a benefit at work which enables him to defer his current receipt of income and have it paid at a later date, when he will probably be in
a lower tax bracket. Which benefit fits his description? ✔️Deferred Compensation Option
What does the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 allow an employee to do? ✔️In the event of employment
termination, group health insurance can be kept if the employee pays the premiums
Distribution from a Health Savings Account (HSA) for qualified medical expenses are ✔️Tax Free
An indemnity plan limitation that will pay the dental bills after a small amount is paid by the insured is called ✔️Coinsurance
A notice of cash surrender value must be sent to a Universal Life policy owner ✔️At least Annually
The term which describes the fact that both parties of a contract may NOT receive the same value is referred to as ✔️Aleatory
