MICHIGAN LIFE INSURANCE 2026 EVALUATION EXAM
QUESTIONS AND ANSWERS RATED A+
✔✔The acceptance of a credit life application requires the submission of a certificate of
insurance to the insured within __ days.
10
20
30
40 - ✔✔30
✔✔What does the Group Life underwriting risk selection process help protect insurance
companies from?
Risk aversion
Natural selection
Adverse selection
Risk Management - ✔✔Adverse Selection
✔✔A guaranteed issue insurance policy has no
initial premium requirement
incontestable period
waiting period
medical underwriting - ✔✔Medical Underwriting
✔✔A Universal Life policyowner must receive a notice of cash surrender value at
LEAST every
6 months
year
2 years
5 years - ✔✔year
,✔✔A Roth IRA owner must be at least what age in order to make tax free withdrawals?
59 1/2 and owned account for a minimum of 10 years
59 1/2 and owned account minimum of 5 years
70 1/2 and owned account for a minimum of 10 years
70 1/2 and owned account for a minimum of 5 years - ✔✔59 1/2 and owned the account
for 5 years
✔✔In Michigan, legal action may be taken against an insurer for up to ___ Years for
failing to pay a life insurance claim after proof of loss was submitted
4
5
6
7 - ✔✔6
✔✔Level premium permanent insurance accumulates a reserve that will eventually
equal the face amount of the policy
pay a dividend to the policyowner
require the policyowner to make periodic withdrawals
become larger than the face amount - ✔✔equal the face amount of the policy
✔✔Under a life insurance policy, what does the insuring clause state?
The agents obligation to provide the proper amount of coverage
The insurers obligation to return all premiums upon an approved death claim
The Insurers obligation to pay a death benefit upon an approved death claim
The agents obligation to pay a death benefit upon an approved death claim - ✔✔The
Insurers obligation to pay a death benefit upon an approved death claim
✔✔Term insurance is appropriate for someone who
seeks living benefits for themselves
seeks a policy that builds cash value
seeks temporary protection and lower premiums
,seeks permanent protection and higher premiums - ✔✔seeks temporary protection and
lower premiums
✔✔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 - ✔✔Tom
✔✔Michigan requires that a licensee complete __ hours of continuing education on the
subject of ethics every reporting period
1
2
3
4 - ✔✔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 - ✔✔Participating life insurance policy
✔✔Which of these would limit a company's liability to provide insurance coverage?
Waiver
Exclusion
Rider
Provision - ✔✔Exclsuion
✔✔How do insurers predict the increase of individual risks?
, Law of large numbers
U.S. Census
Average mortality incidents
Experience of morbidity - ✔✔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 - ✔✔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 - ✔✔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 - ✔✔guaranteed insurability rider
✔✔Which type of policy combines the flexibility of a universal life policy with investment
choices
Adjustable universal life policy
Flexible universal life policy
QUESTIONS AND ANSWERS RATED A+
✔✔The acceptance of a credit life application requires the submission of a certificate of
insurance to the insured within __ days.
10
20
30
40 - ✔✔30
✔✔What does the Group Life underwriting risk selection process help protect insurance
companies from?
Risk aversion
Natural selection
Adverse selection
Risk Management - ✔✔Adverse Selection
✔✔A guaranteed issue insurance policy has no
initial premium requirement
incontestable period
waiting period
medical underwriting - ✔✔Medical Underwriting
✔✔A Universal Life policyowner must receive a notice of cash surrender value at
LEAST every
6 months
year
2 years
5 years - ✔✔year
,✔✔A Roth IRA owner must be at least what age in order to make tax free withdrawals?
59 1/2 and owned account for a minimum of 10 years
59 1/2 and owned account minimum of 5 years
70 1/2 and owned account for a minimum of 10 years
70 1/2 and owned account for a minimum of 5 years - ✔✔59 1/2 and owned the account
for 5 years
✔✔In Michigan, legal action may be taken against an insurer for up to ___ Years for
failing to pay a life insurance claim after proof of loss was submitted
4
5
6
7 - ✔✔6
✔✔Level premium permanent insurance accumulates a reserve that will eventually
equal the face amount of the policy
pay a dividend to the policyowner
require the policyowner to make periodic withdrawals
become larger than the face amount - ✔✔equal the face amount of the policy
✔✔Under a life insurance policy, what does the insuring clause state?
The agents obligation to provide the proper amount of coverage
The insurers obligation to return all premiums upon an approved death claim
The Insurers obligation to pay a death benefit upon an approved death claim
The agents obligation to pay a death benefit upon an approved death claim - ✔✔The
Insurers obligation to pay a death benefit upon an approved death claim
✔✔Term insurance is appropriate for someone who
seeks living benefits for themselves
seeks a policy that builds cash value
seeks temporary protection and lower premiums
,seeks permanent protection and higher premiums - ✔✔seeks temporary protection and
lower premiums
✔✔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 - ✔✔Tom
✔✔Michigan requires that a licensee complete __ hours of continuing education on the
subject of ethics every reporting period
1
2
3
4 - ✔✔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 - ✔✔Participating life insurance policy
✔✔Which of these would limit a company's liability to provide insurance coverage?
Waiver
Exclusion
Rider
Provision - ✔✔Exclsuion
✔✔How do insurers predict the increase of individual risks?
, Law of large numbers
U.S. Census
Average mortality incidents
Experience of morbidity - ✔✔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 - ✔✔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 - ✔✔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 - ✔✔guaranteed insurability rider
✔✔Which type of policy combines the flexibility of a universal life policy with investment
choices
Adjustable universal life policy
Flexible universal life policy
