MI LIFE PRODUCER FINAL EXAM LATEST
EXAM | QUESTIONS AND CORRECT
ANSWERS | GRADED A+ | VERIFIED
ANSWERS (JUST RELEASED)
A variable annuity owner has a subaccount with a current net asset value
(NAV) of $15. If the VA owner makes a $1,000 premium payment, how
many accumulation units will be acquired? ------CORRECT ANSWER--------
-------66.6 units//The owner would buy additional accumulation units at $15
per unit, which is now the current value. A $1,000 payment would buy 66.6
units.
An indexed whole life policy ties death benefits and premiums to which of
the following? ------CORRECT ANSWER---------------the Consumer Price
Index (CPI)//Indexed whole life insurance ties its death benefit and its
premiums to a specified index, most commonly the Consumer Price Index
(CPI).
With a key person life insurance policy, who is the owner of the policy? -----
-CORRECT ANSWER---------------the employer//With a key employee life
insurance policy, the business applies for, owns, and is the beneficiary of
the policy covering the life of a key employee.
Which term applies to an insurance company domiciled in one state but
operating in another, from the perspective of the state in which it operates?
------CORRECT ANSWER---------------foreign company//Any company that
does business in a state other than the one in which it is domiciled is
classified as a foreign company in the state where it does business.
,Which of the following is the primary regulator of those who sell variable life
insurance? ------CORRECT ANSWER---------------state insurance
departments and Financial Industry Regulatory Authority (FINRA)//To be
properly registered to sell variable insurance contracts, producers must
hold either a FINRA Series 6 or Series 7 registration, obtained by passing a
FINRA exam. They must also hold a valid life insurance license in the
state(s) where they do business.
A life insurance policy that offers coverage for a specified, limited period
with no cash value building up is called a: ------CORRECT ANSWER---------
------term life insurance policy//A term life insurance policy protects the
insured for a specified, limited period and does not build any cash value.
The policy pays death benefits only if the insured dies during the term of
coverage.
If John buys a new life insurance policy or annuity that amends the
coverage of his existing life insurance policy, the new policy will be
considered which of the following? ------CORRECT ANSWER---------------a
replacement policy//Replacement occurs when an applicant is about to buy
a new life insurance policy or annuity and, as a result, an existing life
insurance policy or annuity will be lapsed, terminated, amended, or
compromised in some way.
Which one of the following statements about term life insurance is correct?
------CORRECT ANSWER---------------The policy pays a death benefit only if
the insured dies during the term.//Term insurance pays a death benefit only
if the insured dies during the term.
Nadir Insurance instructs its producers to omit certain information from their
records of insurance transactions for the previous year. This information
would give the Department of Insurance reason to expand any routine
examination of Nadir if the Department knew about it. Which of the
,following is true about Nadir's instructions? ------CORRECT ANSWER-------
--------They are prohibited.//No one may make false entries in a book,
report, or statement to deceive anyone who is examining an insurer's
financial condition or affairs or omit information that is relevant to the
examination of the insurer's financial condition or affairs.
After the Director issued a cease and desist order, Agent Smith continued
to offer illegal inducements to insurance prospects in violation of the order.
Which penalty can the Director impose? ------CORRECT ANSWER-----------
----a fine of up to $10,000 and license revocation//If a producer knowingly
violates a cease and desist order, the Director can order that the producer
be fined up to $10,000 for each violation (up to $50,000 total), have his or
her license suspended or revoked, or be subject to a combination of these
disciplinary measures.
Flora's deferred annuity contract has an 11-year surrender charge period,
during which the surrender charge will most likely: ------CORRECT
ANSWER---------------decrease//The surrender charge is typically a
declining percentage of the withdrawn amount.
Which of the following statements about children's term riders is correct? ---
---CORRECT ANSWER---------------If a child converts coverage to a
permanent policy, the new policy's face amount can be greater than the
term rider coverage.//When coverage ends for a child, the child can convert
the coverage to any permanent life insurance policy the insurer is then
issuing. Evidence of insurability is not required. The policy face amount can
be greater than the term rider coverage.
With respect to variable annuity annuitization, which of the following
statements is NOT correct? ------CORRECT ANSWER---------------
Annuitization under a variable annuity contract provides for income
payments that are fixed and unchanging, like a fixed annuity.//Annuitization
, under a variable annuity contract provides for income payments that are
not fixed and unchanging, like a fixed annuity.
If an employer sets up a profit-sharing plan, which one of the following
statements is most correct? ------CORRECT ANSWER---------------It must
establish individual accounts for each participant.//Under a profit-sharing
plan, the employer is the sole contributor to the plan. Contributions are
directed into individual accounts for each participant.
In a cross-purchase buy-sell agreement involving three partners, how many
life insurance policies does the business itself own? ------CORRECT
ANSWER---------------0//In a cross-purchase buy-sell agreement, the
business itself is not involved in the purchase agreement.
Which of the following is NOT an unfair claims settlement practice if
committed by an insurance company in Michigan? ------CORRECT
ANSWER---------------failing to promptly settle a claim for which liability is
uncertain//An insurer is not obligated to settle a claim for which it is not
clearly liable.
All the following statements about children's term riders on life insurance
policies are correct, EXCEPT: ------CORRECT ANSWER---------------The
modest amount of coverage in a children's term rider reflects the small
amount parents are willing to pay for children's insurance.//The coverage a
children's term rider provides reflects the generally smaller death benefit
need when a child dies.
Which of the following is a correct statement in describing the difference
between a variable annuity (VA) and a fixed annuity? ------CORRECT
ANSWER---------------A VA makes no guarantee as to the principal or
