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MI Life Producer Final Exam Questions And Answers
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MI Life Producer Final Exam QuestionsAnd Answers
Jane works for a company that allows employee contributions under a
401(k) plan. When will Jane become fully vested in her plan
contributions? - correct answer ✅immediately//While employer
contributions to a qualified plan can be subject to a vesting schedule,
participants are always fully vested in their own contributions.
Agents must act in the best interests of applicants and insureds. What
does this require them to do? - correct answer ✅give all important
information about a proposed policy//Agents must act in the applicant's
or insured's best interests at all times. This means that agents must give
all important information about a proposed policy. Also, they cannot
misrepresent the terms or conditions of a proposed policy.
What does a viatical settlement allow? - correct answer ✅It allows a
chronically or terminally ill insured to gain a sum of money that is
needed to pay medical expenses or to enhance the quality of life.//A
viatical settlement allows a chronically or terminally ill insured to gain a
sum of money that might be needed to pay medical expenses or to
enhance quality of life.
If an employer/employee group offers group life insurance on a
contributory basis, what percentage of the group must enroll? - correct
answer ✅At least 75 percent of the group must enroll in the plan//If an
employer/employee group life insurance plan is contributory, 75
percent of the group must enroll in the plan. If the plan is non-
contributory, 100 percent of the group must enroll.
,MI Life Producer Final Exam Questions
And Answers
Which of the following is NOT a life insurance premium? - correct
answer ✅competitors' rates//Actuaries base life insurance premiums
on three basic factors: mortality (a charge), interest (a credit), and
expenses (a charge).
In calculating their mortality charges, life insurers today generally use: -
correct answer ✅the 2001 CSO table//The mortality factor is drawn
from mortality statistics compiled by the National Association of
Insurance Commissioners (NAIC) into a set of rates called the
Commissioners Standard Ordinary (CSO) table. Policies issued since
2009 are required to base their mortality charges on the 2001 CSO
table.
All of the following are standard life insurance policy nonforfeiture
options EXCEPT: - correct answer ✅accumulate at interest option//This
is a policy dividend option in which declared dividends are left with the
insurer to accumulate interest on the policyowner's behalf.
Which of the following most correctly describes the nonforfeiture
option(s) available with universal life insurance? - correct answer
✅surrender the policy for its cash value or stop paying premiums and
continue coverage as long as the cash value will support it//Universal
life policies do not contain the standard nonforfeiture options. Instead,
the policyowner can either surrender the policy for its cash value or
continue coverage with no further premium payments, in which case
,MI Life Producer Final Exam Questions
And Answers
coverage will last for as long as the cash value is able to support the
policy's monthly mortality and expense charge deductions.
James wants to convert his $150,000 traditional IRA to a Roth IRA. What
best describes the tax treatment for the Roth conversion? - correct
answer ✅The converted funds are taxed, but Roth IRA earnings and
distribution will be tax free.//The $150,000 from the traditional IRA has
been deferred so it will be taxed upon conversion. However, as long as
James holds the new Roth IRA for at least five years and is older than
59', distributions from the Roth IRA will be tax free.
Under variable life insurance plans, policy loans can be as high as what
percent of the cash value? - correct answer ✅75 to 90 percent//Policy
loans under traditional whole life insurance plans can be as high as 100
percent of the cash value, but with variable life insurance the maximum
loan amount is something less than the full cash value (e.g., 75 to 90
percent of the cash value), less any debt currently outstanding against
the policy.
Under which nonforfeiture option does permanent life insurance
continue in force with no further need for premiums? - correct answer
✅reduced paid-up option//A paid-up policy under the reduced paid-up
option requires no further premiums (nor can any be paid). The paid-up
policy retains a cash value that will continue to grow throughout the life
of the policy. However, it will grow much more slowly than during the
period that premiums were being paid.
, MI Life Producer Final Exam Questions
And Answers
Which of the following can be funded with a single premium payment, a
series of fixed premium payments, or flexible premium payments? -
correct answer ✅deferred annuities//Deferred annuities can be
funded with a single premium payment, a series of fixed premium
payments, or with flexible premium payments. Moreover, the owner
can make these payments whenever and in whatever amount he or she
wants.
How does the cost of group life insurance generally compare to the cost
of individual life insurance? - correct answer ✅Group life is less
expensive.//Per unit of benefits or coverage, group life insurance is less
expensive than individual life insurance because it has lower
administrative and operational costs.
Which of the following statements about the 'accumulate at interest'
policy dividend option is correct? - correct answer ✅The insurer
credits a rate of interest to the dividends as they remain on deposit
with the insurer.//The insurer credits a rate of interest to the dividends
as they remain on deposit with the insurer.
When it comes to choosing a financial instrument to fund a qualified
retirement account, which of the following features makes an annuity
the most suitable product? - correct answer ✅retirement income that
is guaranteed for life//All qualified retirement plan assets enjoy tax-
deferred growth and tax-deductible deposits, and many offer a variety
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