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LIFE PRODUCER EXAM (MI) QUESTIONS AND ANSWERS
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LIFE PRODUCER EXAM (MI) QUESTIONS AND ANSWERS
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LIFE PRODUCER EXAM (MI)QUESTIONS AND ANSWERS
Which of the following is NOT true regarding a Certificate of Authority?
a)It may be necessary for transacting business in a specific state.
b)It is equivalent to an insurance license.
c)It is issued by the state department of insurance.
d)It is issued to group insurance participants. - Answer -d) It is issued to group
insurance participants.
Before insurers may transact business in a specific state, they must apply for a license
or Certificate of Authority from the state department of insurance and meet any financial
(capital and surplus) requirements set down by the state.
If an insured changes his payment plan from monthly to annually, what happens to the
total premium?
a)Doubles
b)Increases
c)Decreases
d)Stays the same - Answer -c) Decreases
Because the insurer would have the entire premium to invest for a full year, they would
reduce the premium amount.
To sell variable life insurance policies, an agent must receive all of the following
EXCEPT
a)A life insurance license.
b)SEC registration.
c)FINRA registration
.d)A securities license. - Answer -b) The owner will receive the surrender value of the
annuity.
If a deferred annuity is surrendered prior to annuitization, the surrender value of the
annuity is guaranteed according to the nonforfeiture provision.
What happens if a deferred annuity is surrendered before the annuitization period?
, a)Deferred annuities cannot be surrendered prior to the annuitization period.
b)The owner will receive the surrender value of the annuity.
c)The owner will only receive a refund of premium.
d)The insurer can only apply the surrender value toward another annuity. - Answer -b)
The owner will receive the surrender value of the annuity.
If a deferred annuity is surrendered prior to annuitization, the surrender value of the
annuity is guaranteed according to the nonforfeiture provision.
What is the maximum fine for submitting a false or fraudulent claim to the insurer?
a)$500
b)$1,000
c)$1,500
d)$2,000 - Answer -b) 1,000
If convicted for a false claim, an insured, agent, collector, physician or any other person
could be fined up to $1,000.
Which is generally true regarding insureds who have been classified as preferred risks?
a)They keep a higher percentage of any interest earned on their policies.
b)Their premiums are lower.
c)They can borrow higher amounts off of their policies.
d)They can decide when to pay their monthly premiums. - Answer -b) Their premiums
are lower.
The preferred risk classification indicates that an insured is in excellent physical
condition and employs healthy lifestyles and habits. These individuals qualify for lower
premiums than those in the other categories.
Annually renewable term policies provide a level death benefit for a premium that
a)Decreases annually.
b)Remains level.
c)Fluctuates.
d)Increases annually. - Answer -d) Increases annually.
Annually renewable term policies provide a level death benefit for a premium that
increases each year with the age of the insured.
All of the following are true regarding rebates EXCEPT
a)Dividends are not considered to be rebates.
b)Rebates are allowed if it's in the best interest of the client.
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