Michigan Life and Health Actual Exam 2026/2027
MICHIGAN LIFE AND HEALTH
FINAL EXAM
2026/2027 ACTUAL QUESTIONS
WITH VERIFIED SOLUTIONS
150 Questions | PSI Exam Format | Verified Answers with Rationales
Aligned with 2026/2027 Michigan DIFS and NAIC Guidelines
Michigan Department of Insurance and Financial Services (DIFS)
Life and Health Insurance Producer Licensing Examination
Page 1
, Michigan Life and Health Actual Exam 2026/2027
Key Features
✓ Life insurance policy provisions, riders, and beneficiary designations
✓ Health insurance policies including HMO, PPO, POS, Medicare, and Medicaid
✓ Annuities, retirement plans, and tax-advantaged accounts
✓ Michigan state-specific insurance regulations, licensing laws, and DIFS mandates
✓ Producer duties, ethics, claim procedures, and policy replacement rules
Updates for 2026
1. Updated NAIC model regulations regarding life insurance illustrations and suitability standards,
requiring enhanced disclosure and documentation for all life insurance and annuity recommendations.
2. Revised Michigan DIFS guidelines on producer licensing, continuing education, and digital
appointments, streamlining the electronic submission and processing of producer appointments
through NIPR.
3. New state and federal mandates regarding telehealth coverage parity and mental health benefits in
health insurance policies, ensuring equitable coverage for virtual care and behavioral health services.
Abstract
This document presents 150 actual exam questions with verified solutions for the Michigan Life and
Health Insurance Producer licensing examination as administered by PSI Services under the authority
of the Michigan Department of Insurance and Financial Services (DIFS). The content is meticulously
aligned with the 2026/2027 examination content outline, incorporating foundational principles of life
and health insurance, annuity and retirement plan mechanics, Michigan state-specific insurance
regulations and licensing laws, and the ethical standards and consumer protection mandates that
govern producer conduct. Each question reflects the scope and depth of the official examination
blueprint, addressing policy provisions, riders, beneficiary designations, group and individual health
plan structures, Medicare and Medicaid frameworks, annuity suitability requirements, DIFS
regulatory mandates, unfair trade practice prohibitions, and the fiduciary and disclosure obligations of
licensed producers. The verified answers are accompanied by detailed rationales, distractor
explanations, and specific statutory or regulatory references to facilitate comprehensive understanding
of both the correct principles and the common misconceptions that characterize the examination.
Keywords
Michigan Life and Health, Insurance Producer, DIFS, Life Insurance, Health Insurance, Annuities,
Medicare, Medicaid, State Regulations, NAIC, Ethics
Content Area Overview
Content Area Questions Key Topics Weight
Life Insurance General Concepts 35 Policy types, riders, beneficiaries, 23.3%
& Policies underwriting
Health Insurance General 35 HMO, PPO, POS, Medicare, 23.3%
Concepts & Policies Medicaid, group health
Annuities & Retirement Plans 25 Fixed/variable annuities, 401(k), 16.7%
IRA, tax rules
Michigan State Specific Laws & 30 DIFS mandates, licensing, CE 20.0%
Regulations requirements, state codes
Policy Provisions, Clauses & 25 Grace period, incontestability, 16.7%
Ethics replacements, ethics
Page 2
, Michigan Life and Health Actual Exam 2026/2027
Examination Questions
Total: 150 Questions | 115 Scored | 35 Pretest | Passing Score: 70%
Domain 1: Life Insurance General Concepts & Policies
Q1. Which type of life insurance provides coverage for a specified period and pays a
death benefit only if the insured dies during that period?
A) Term life insurance
B) Whole life insurance
C) Universal life insurance
D) Variable life insurance
Correct Answer: A
Rationale: Term life insurance provides pure death benefit protection for a specified period (term)
with no cash value accumulation, making it the most affordable form of life insurance for a given
death benefit amount.
Why Wrong: B: Whole life builds cash value and covers the insured for their entire life. C: Universal
life offers flexible premiums and cash value. D: Variable life invests cash value in separate accounts.
Reference: Michigan Insurance Code, Chapter 12, Section 500.2202; NAIC Life Insurance Policy
Models
Q2. What is the primary characteristic of whole life insurance that distinguishes it from
term life insurance?
A) Lower premium payments
B) Cash value accumulation
C) Limited coverage period
D) No medical examination required
Correct Answer: B
Rationale: Whole life insurance features a cash value component that accumulates over time on a
tax-deferred basis, funded by level premiums that exceed the cost of insurance in early years,
creating a savings element alongside the death benefit.
Why Wrong: A: Whole life premiums are higher, not lower, than term. C: Whole life covers the insured
for their entire life, not a limited period. D: Whole life typically requires medical underwriting.
Reference: Michigan Insurance Code, MCL 500.2202; Fundamentals of Financial Planning, Ch. 7
Q3. Which life insurance policy type allows the policyowner to adjust the premium
payments and death benefit amount after policy issuance?
A) Term life insurance
B) Whole life insurance
C) Universal life insurance
D) Endowment insurance
Correct Answer: C
Rationale: Universal life insurance provides flexibility for the policyowner to increase or decrease
premium payments and adjust the death benefit within policy limits, subject to maintaining
sufficient cash value to cover monthly deductions.
Why Wrong: A: Term life has fixed premiums and death benefit. B: Whole life has fixed premiums and
guaranteed death benefit. D: Endowment policies have fixed premiums and pay at a specified age or
death.
Reference: NAIC Universal Life Insurance Model Regulation; Fundamentals of Financial Planning, Ch.
7
Q4. In a variable life insurance policy, who bears the investment risk of the cash value?
A) The insurance company
B) The policyowner
C) The beneficiary
D) The state guaranty association
Correct Answer: B
Rationale: In variable life insurance, the cash value is invested in separate accounts similar to
mutual funds, and the policyowner assumes all investment risk since the cash value fluctuates with
market performance.
Page 3
, Michigan Life and Health Actual Exam 2026/2027
Why Wrong: A: The insurer does not guarantee cash value in variable life. C: The beneficiary only
receives the death benefit. D: The guaranty association covers insurer insolvency, not investment
losses.
Reference: NAIC Variable Contracts Model Regulation; SEC/FINRA regulations on variable products
Q5. What does the waiver of premium rider provide in a life insurance policy?
A) Refund of all premiums paid if the insured becomes disabled
B) Waiver of future premium payments if the insured becomes totally disabled
C) Reduction of premium payments during periods of unemployment
D) Temporary suspension of premium payments for any reason
Correct Answer: B
Rationale: The waiver of premium rider stipulates that if the insured becomes totally disabled for a
specified waiting period (typically 6 months), the insurance company will waive all future premium
payments while keeping the policy in force.
Why Wrong: A: It does not refund past premiums, only waives future ones. C: Unemployment is not a
trigger for this rider. D: The waiver applies only to total disability, not voluntary premium suspension.
Reference: NAIC Life Insurance Policy Rider Models; Fundamentals of Financial Planning, Ch. 8
Q6. Which rider allows the policyowner to purchase additional life insurance at
specified dates without evidence of insurability?
A) Waiver of premium rider
B) Accidental death benefit rider
C) Guaranteed insurability rider
D) Term conversion rider
Correct Answer: C
Rationale: The guaranteed insurability rider (also called guaranteed purchase option) permits the
policyowner to buy additional coverage at specified option dates or life events (marriage, birth of
child) without providing evidence of insurability or undergoing medical underwriting.
Why Wrong: A: Waiver of premium relates to disability, not purchasing additional coverage. B:
Accidental death benefit pays an additional benefit for accidental death. D: Term conversion allows
converting term to permanent insurance.
Reference: NAIC Life Insurance Policy Rider Models; Fundamentals of Financial Planning, Ch. 8
Q7. What is the purpose of the accidental death benefit rider?
A) Waives premiums if death occurs accidentally
B) Pays an additional death benefit if death results from an accident
C) Provides coverage only for accidental deaths and nothing else
D) Returns all premiums paid if death is accidental
Correct Answer: B
Rationale: The accidental death benefit rider (double indemnity) pays an additional amount,
typically equal to the face amount of the policy, if the insured's death results from an accidental
cause, effectively doubling the death benefit in such circumstances.
Why Wrong: A: Premium waiver is handled by the waiver of premium rider. C: The base policy still
covers all causes of death; this rider adds extra benefit for accidental death. D: It does not return
premiums; it adds an extra death benefit.
Reference: NAIC Life Insurance Policy Rider Models; Michigan Insurance Code, MCL 500.2206
Q8. Under which beneficiary designation does the policyowner need the beneficiary's
consent to change the designation?
A) Revocable beneficiary
B) Contingent beneficiary
C) Irrevocable beneficiary
D) Primary beneficiary
Correct Answer: C
Rationale: An irrevocable beneficiary has vested rights in the policy, meaning the policyowner
cannot change the beneficiary designation or exercise certain policy rights (such as taking policy
loans) without the irrevocable beneficiary's written consent.
Why Wrong: A: A revocable beneficiary can be changed by the policyowner at any time without
consent. B: A contingent beneficiary is a backup beneficiary and can be either revocable or irrevocable.
Page 4
MICHIGAN LIFE AND HEALTH
FINAL EXAM
2026/2027 ACTUAL QUESTIONS
WITH VERIFIED SOLUTIONS
150 Questions | PSI Exam Format | Verified Answers with Rationales
Aligned with 2026/2027 Michigan DIFS and NAIC Guidelines
Michigan Department of Insurance and Financial Services (DIFS)
Life and Health Insurance Producer Licensing Examination
Page 1
, Michigan Life and Health Actual Exam 2026/2027
Key Features
✓ Life insurance policy provisions, riders, and beneficiary designations
✓ Health insurance policies including HMO, PPO, POS, Medicare, and Medicaid
✓ Annuities, retirement plans, and tax-advantaged accounts
✓ Michigan state-specific insurance regulations, licensing laws, and DIFS mandates
✓ Producer duties, ethics, claim procedures, and policy replacement rules
Updates for 2026
1. Updated NAIC model regulations regarding life insurance illustrations and suitability standards,
requiring enhanced disclosure and documentation for all life insurance and annuity recommendations.
2. Revised Michigan DIFS guidelines on producer licensing, continuing education, and digital
appointments, streamlining the electronic submission and processing of producer appointments
through NIPR.
3. New state and federal mandates regarding telehealth coverage parity and mental health benefits in
health insurance policies, ensuring equitable coverage for virtual care and behavioral health services.
Abstract
This document presents 150 actual exam questions with verified solutions for the Michigan Life and
Health Insurance Producer licensing examination as administered by PSI Services under the authority
of the Michigan Department of Insurance and Financial Services (DIFS). The content is meticulously
aligned with the 2026/2027 examination content outline, incorporating foundational principles of life
and health insurance, annuity and retirement plan mechanics, Michigan state-specific insurance
regulations and licensing laws, and the ethical standards and consumer protection mandates that
govern producer conduct. Each question reflects the scope and depth of the official examination
blueprint, addressing policy provisions, riders, beneficiary designations, group and individual health
plan structures, Medicare and Medicaid frameworks, annuity suitability requirements, DIFS
regulatory mandates, unfair trade practice prohibitions, and the fiduciary and disclosure obligations of
licensed producers. The verified answers are accompanied by detailed rationales, distractor
explanations, and specific statutory or regulatory references to facilitate comprehensive understanding
of both the correct principles and the common misconceptions that characterize the examination.
Keywords
Michigan Life and Health, Insurance Producer, DIFS, Life Insurance, Health Insurance, Annuities,
Medicare, Medicaid, State Regulations, NAIC, Ethics
Content Area Overview
Content Area Questions Key Topics Weight
Life Insurance General Concepts 35 Policy types, riders, beneficiaries, 23.3%
& Policies underwriting
Health Insurance General 35 HMO, PPO, POS, Medicare, 23.3%
Concepts & Policies Medicaid, group health
Annuities & Retirement Plans 25 Fixed/variable annuities, 401(k), 16.7%
IRA, tax rules
Michigan State Specific Laws & 30 DIFS mandates, licensing, CE 20.0%
Regulations requirements, state codes
Policy Provisions, Clauses & 25 Grace period, incontestability, 16.7%
Ethics replacements, ethics
Page 2
, Michigan Life and Health Actual Exam 2026/2027
Examination Questions
Total: 150 Questions | 115 Scored | 35 Pretest | Passing Score: 70%
Domain 1: Life Insurance General Concepts & Policies
Q1. Which type of life insurance provides coverage for a specified period and pays a
death benefit only if the insured dies during that period?
A) Term life insurance
B) Whole life insurance
C) Universal life insurance
D) Variable life insurance
Correct Answer: A
Rationale: Term life insurance provides pure death benefit protection for a specified period (term)
with no cash value accumulation, making it the most affordable form of life insurance for a given
death benefit amount.
Why Wrong: B: Whole life builds cash value and covers the insured for their entire life. C: Universal
life offers flexible premiums and cash value. D: Variable life invests cash value in separate accounts.
Reference: Michigan Insurance Code, Chapter 12, Section 500.2202; NAIC Life Insurance Policy
Models
Q2. What is the primary characteristic of whole life insurance that distinguishes it from
term life insurance?
A) Lower premium payments
B) Cash value accumulation
C) Limited coverage period
D) No medical examination required
Correct Answer: B
Rationale: Whole life insurance features a cash value component that accumulates over time on a
tax-deferred basis, funded by level premiums that exceed the cost of insurance in early years,
creating a savings element alongside the death benefit.
Why Wrong: A: Whole life premiums are higher, not lower, than term. C: Whole life covers the insured
for their entire life, not a limited period. D: Whole life typically requires medical underwriting.
Reference: Michigan Insurance Code, MCL 500.2202; Fundamentals of Financial Planning, Ch. 7
Q3. Which life insurance policy type allows the policyowner to adjust the premium
payments and death benefit amount after policy issuance?
A) Term life insurance
B) Whole life insurance
C) Universal life insurance
D) Endowment insurance
Correct Answer: C
Rationale: Universal life insurance provides flexibility for the policyowner to increase or decrease
premium payments and adjust the death benefit within policy limits, subject to maintaining
sufficient cash value to cover monthly deductions.
Why Wrong: A: Term life has fixed premiums and death benefit. B: Whole life has fixed premiums and
guaranteed death benefit. D: Endowment policies have fixed premiums and pay at a specified age or
death.
Reference: NAIC Universal Life Insurance Model Regulation; Fundamentals of Financial Planning, Ch.
7
Q4. In a variable life insurance policy, who bears the investment risk of the cash value?
A) The insurance company
B) The policyowner
C) The beneficiary
D) The state guaranty association
Correct Answer: B
Rationale: In variable life insurance, the cash value is invested in separate accounts similar to
mutual funds, and the policyowner assumes all investment risk since the cash value fluctuates with
market performance.
Page 3
, Michigan Life and Health Actual Exam 2026/2027
Why Wrong: A: The insurer does not guarantee cash value in variable life. C: The beneficiary only
receives the death benefit. D: The guaranty association covers insurer insolvency, not investment
losses.
Reference: NAIC Variable Contracts Model Regulation; SEC/FINRA regulations on variable products
Q5. What does the waiver of premium rider provide in a life insurance policy?
A) Refund of all premiums paid if the insured becomes disabled
B) Waiver of future premium payments if the insured becomes totally disabled
C) Reduction of premium payments during periods of unemployment
D) Temporary suspension of premium payments for any reason
Correct Answer: B
Rationale: The waiver of premium rider stipulates that if the insured becomes totally disabled for a
specified waiting period (typically 6 months), the insurance company will waive all future premium
payments while keeping the policy in force.
Why Wrong: A: It does not refund past premiums, only waives future ones. C: Unemployment is not a
trigger for this rider. D: The waiver applies only to total disability, not voluntary premium suspension.
Reference: NAIC Life Insurance Policy Rider Models; Fundamentals of Financial Planning, Ch. 8
Q6. Which rider allows the policyowner to purchase additional life insurance at
specified dates without evidence of insurability?
A) Waiver of premium rider
B) Accidental death benefit rider
C) Guaranteed insurability rider
D) Term conversion rider
Correct Answer: C
Rationale: The guaranteed insurability rider (also called guaranteed purchase option) permits the
policyowner to buy additional coverage at specified option dates or life events (marriage, birth of
child) without providing evidence of insurability or undergoing medical underwriting.
Why Wrong: A: Waiver of premium relates to disability, not purchasing additional coverage. B:
Accidental death benefit pays an additional benefit for accidental death. D: Term conversion allows
converting term to permanent insurance.
Reference: NAIC Life Insurance Policy Rider Models; Fundamentals of Financial Planning, Ch. 8
Q7. What is the purpose of the accidental death benefit rider?
A) Waives premiums if death occurs accidentally
B) Pays an additional death benefit if death results from an accident
C) Provides coverage only for accidental deaths and nothing else
D) Returns all premiums paid if death is accidental
Correct Answer: B
Rationale: The accidental death benefit rider (double indemnity) pays an additional amount,
typically equal to the face amount of the policy, if the insured's death results from an accidental
cause, effectively doubling the death benefit in such circumstances.
Why Wrong: A: Premium waiver is handled by the waiver of premium rider. C: The base policy still
covers all causes of death; this rider adds extra benefit for accidental death. D: It does not return
premiums; it adds an extra death benefit.
Reference: NAIC Life Insurance Policy Rider Models; Michigan Insurance Code, MCL 500.2206
Q8. Under which beneficiary designation does the policyowner need the beneficiary's
consent to change the designation?
A) Revocable beneficiary
B) Contingent beneficiary
C) Irrevocable beneficiary
D) Primary beneficiary
Correct Answer: C
Rationale: An irrevocable beneficiary has vested rights in the policy, meaning the policyowner
cannot change the beneficiary designation or exercise certain policy rights (such as taking policy
loans) without the irrevocable beneficiary's written consent.
Why Wrong: A: A revocable beneficiary can be changed by the policyowner at any time without
consent. B: A contingent beneficiary is a backup beneficiary and can be either revocable or irrevocable.
Page 4
