Michigan Life and Health Final Exam Actual Questions
and Answers with complete 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?
and Answers with complete 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?
