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Exam (elaborations)

MICHIGAN LIFE INSURANCE STATE EXAM

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MICHIGAN LIFE INSURANCE STATE EXAM

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  • October 12, 2024
  • 35
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • MICHIGAN LIFE INSURANCE STATE
  • MICHIGAN LIFE INSURANCE STATE
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MICHIGAN LIFE INSURANCE STATE EXAM
Under a traditional IRA, interest is taxed:

Only if withdrawn prior to age 59 1/2

According to the capital gains rate

Upon distribution

During the accumulation phase - Answers-Upon distribution

Which of these statements concerning Traditional IRAs is CORRECT?

Earnings are not taxable when withdrawn

Earnings are taxable when withdrawn

Contribution are never tax deductible

Contributions are always made by the employer - Answers-Earnings are taxable when
withdrawn

Which of the following actions is REQUIRED by a producer who is replacing an existing
life insurance policy?

Keep replacement records on file for at least 10 years

Notify the existing insurer of the proposed replacement

Submit to the replacing insurer a list of the policies to be replaced

Offer the insured a 60- day free- look period - Answers-Submit to the replacing insurer a
list of the policies to be replaced

Who were Keogh plans designed to provide pension benefits for?

Corporate officers

Public school employees

The self-employed

Government employees - Answers-The self emplyed

,A producer's fiduciary duty requires that

premiums are maintained in a personal bank account until remittance to insurer

premiums be deposited in an interest bearing account

premiums are forwarded to the insurer on a timely basis

premiums be commingled - Answers-Premiums are forwarded on a timely basis

An individual who removes the risk of losing money in the stock market by never
purchasing stocks is said to be engaging in

Risk reduction

Risk Transference

Risk avoidance

Risk retention - Answers-Risk avoidance

A type of group that has a constitution and has been organized for purposes other than
obtaining insurance is called a(n)

employer group

employee group

association or labor group

multiple coalition - Answers-association or labor group

Which of these describes the result of a modified endowment contract that failed to
meet the seven- pay test?

Policy loans are disallowed

The premium payments will be tax deductible

Pre- death distributions are typically taxable

Withdrawals will be prohibited - Answers-Pre- death distributions are typically taxable

In order for a contract to be valid, it must

,be filled with the state

be signing and witnessed by an attorney

be in writing

contain offer and acceptance - Answers-Contain offer and acceptance

Which of the following is NOT a federal requirement of a qualified plan?

Must benefit a broad cross-section of employees

Employee must be able to make unlimited contributions

Vesting schedule must be defined

Employer establishes the plan - Answers-Employee must be able to make unlimited
contributions

The acceptance of a credit life application requires the submission of a certificate of
insurance to the insured within __ days.

10

20

30

40 - Answers-30

What does the Group Life underwriting risk selection process help protect insurance
companies from?

Risk aversion

Natural selection

Adverse selection

Risk Management - Answers-Adverse Selection

A guaranteed issue insurance policy has no

initial premium requirement

incontestable period

, waiting period

medical underwriting - Answers-Medical Underwriting

A Universal Life policyowner must receive a notice of cash surrender value at LEAST
every

6 months

year

2 years

5 years - Answers-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 - Answers-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 - Answers-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 - Answers-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

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