MICHIGAN LIFE INSURANCE FINAL PAPER
SOLVED QUESTIONS WITH VERIFIED
ANSWERS
●● Sharon is the policyowner of a $50,000 life insurance policy. Her
son, Mike, is the beneficiary. If Sharon MUST obtain Mike's signature in
order to change the beneficiary, what kind of beneficiary designation is
this?
A. Contingent
B. Tertiary
C. Revocable
D. Irrevocable
Answer: D. Irrevocable
●● Insurable interest does NOT occur in which of the following
relationships?
A. Sister and brother
B. Parent and children
C. Business partners
D. Business owner and business client
Answer: D. Business owner and business client
,●● Which type of life insurance is normally associated with a Payor
Benefit rider?
A. Term rider
B. Family income insurance
C. Juvenile insurance
D. Spouse insurance
Answer: C. Juvenile insurance
●● Which of the following are the premium payments for a Universal
life policy NOT used for?
A. Death benefits
B. Separate account investments
C. Loading costs
D. Cash value
Answer: B. Separate account investments
●● Which of these is NOT subject to income taxation under a Modified
Endowment Contract (MEC)?
A. Loan against the cash value
,B. Death benefit
C. Policy dividend
D. Policy withdrawal
Answer: B. Death benefit
●● Tonya has replaced her whole life policy with an annuity without
incurring a tax penalty. This transaction is called a(n)?
A. 1035 Exchange
B. Modified Exchange
C. Endowment Exchange
D. 1040 Exchange
Answer: A. 1035 Exchange
●● A limited payment whole life policy provides?
A. Discounted premiums
B. Protection for more than one person
C. Protection for 20 years
D. Lifetime protection
Answer: D. Lifetime protection
, ●● A partial surrender is allowed in which of the following life policies?
A. Decreasing term life
B. Universal life
C. Adjustable whole life
D. Limited whole life
Answer: B. Universal life
●● Which of the following best describes a conditional insurance
contract?
A. A contract where one party "adheres" to the terms of the contract
B. A contract where only one party makes any kind of enforceable
contract
C. A contract that has the potential for the unequal exchange of
consideration for both parties
D. A contract that requires certain conditions or acts by the insured
individual
Answer: D. A contract that requires certain conditions or acts by the
insured individual
●● A policyowner may change two policy features on what type of life
insurance?
SOLVED QUESTIONS WITH VERIFIED
ANSWERS
●● Sharon is the policyowner of a $50,000 life insurance policy. Her
son, Mike, is the beneficiary. If Sharon MUST obtain Mike's signature in
order to change the beneficiary, what kind of beneficiary designation is
this?
A. Contingent
B. Tertiary
C. Revocable
D. Irrevocable
Answer: D. Irrevocable
●● Insurable interest does NOT occur in which of the following
relationships?
A. Sister and brother
B. Parent and children
C. Business partners
D. Business owner and business client
Answer: D. Business owner and business client
,●● Which type of life insurance is normally associated with a Payor
Benefit rider?
A. Term rider
B. Family income insurance
C. Juvenile insurance
D. Spouse insurance
Answer: C. Juvenile insurance
●● Which of the following are the premium payments for a Universal
life policy NOT used for?
A. Death benefits
B. Separate account investments
C. Loading costs
D. Cash value
Answer: B. Separate account investments
●● Which of these is NOT subject to income taxation under a Modified
Endowment Contract (MEC)?
A. Loan against the cash value
,B. Death benefit
C. Policy dividend
D. Policy withdrawal
Answer: B. Death benefit
●● Tonya has replaced her whole life policy with an annuity without
incurring a tax penalty. This transaction is called a(n)?
A. 1035 Exchange
B. Modified Exchange
C. Endowment Exchange
D. 1040 Exchange
Answer: A. 1035 Exchange
●● A limited payment whole life policy provides?
A. Discounted premiums
B. Protection for more than one person
C. Protection for 20 years
D. Lifetime protection
Answer: D. Lifetime protection
, ●● A partial surrender is allowed in which of the following life policies?
A. Decreasing term life
B. Universal life
C. Adjustable whole life
D. Limited whole life
Answer: B. Universal life
●● Which of the following best describes a conditional insurance
contract?
A. A contract where one party "adheres" to the terms of the contract
B. A contract where only one party makes any kind of enforceable
contract
C. A contract that has the potential for the unequal exchange of
consideration for both parties
D. A contract that requires certain conditions or acts by the insured
individual
Answer: D. A contract that requires certain conditions or acts by the
insured individual
●● A policyowner may change two policy features on what type of life
insurance?
