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MICHIGAN LIFE INSURANCE EXAM 2026 ALL QUESTIONS AND
VERIFIED ANSWERS ALREADY A GRADED WITH EXPERT
FEEDBACK |HIGHLY RECOMMENDED |BRAND NEW!
1. Fair Credit Reporting Act main purpose is to: protect consumers with guidelines regarding credit reporting and
distribution
2. Which of the following protects a policy owner from misrepresentation caused by an
innocent mistake: Incontestable clause
3. A life insurance policy owner was injured in an automobile accident which results in a
total and permanent disability. Which rider would pay a monthly amount because of this
disability: Disability income rider
4. Which scenario would most life insurance policies exclude coverage for: An
individual who has a hobby racing cars once a month
5. Dorian exercised a nonforfeiture option by using his life policy's cash value to purchase an
extended term option. When the term insurance expires: The protection ends
6. What happens when an insurance policy is backdated?: The policy's ettective date is earlier than the
present
7. Rob purchased a standard whole life policy with a $500,000 death benefit when he was age
30. His insurance agent told him the policy would be paid up if he reached age 100. The present
cash value of the policy equals $250,000. Rob recently died at age 60. The death benefit would
be: 500,000
8. How is the cost of a policy affected when a policyowner pays premiums more frequently?:
Increases
9. Intentional withholding of material facts that would affect an insurance policy's validity
is called: Concealment
10. Under Michigan Law, which of the following would NOT be considered an illegal
inducement?: A promotional item with the producer's name and address valued at $5
11. Which contract element is insurable interest a component of?: legal purpose
12. Which type of rider will waive the premium on a child's life insurance policy if the parent
paying the premium dies?: Payor benefit
13. What is the nonforfeiture value of an annuity before annuitization?: All premi-
ums paid, plus interest, minus any withdrawals and surrender charges
14. Who assumes the investment risk with fixed annuity: The insurer
15. ABC Insurance Company transfers part of their risk to XYZ Insurance Com-pany. This
situation is called: Reinsurance
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16. An individual most likely will have an insurance interest in insuring a per-son's life if: An
economic interest exists for the continuance of the insureds life
17. Which of these is NOT subject to income taxation under a MEC: death benefit
18. A policy owner may change two policy features on what type of life insur-ance?: Adjustable
Life
19. Which of these is not the responsibility of a producer: represent the insured
20. Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. She
would like to borrow $15,000 against the cash value. Which of the following statements is TRUE?:
Net death benefit will be reduced if the loan is not repaid
21. An immediate annuity has been purchased with a single premium. When does the
annuitant typically begin receiving benefit payments?: 1 month
22. An insurer's claim settlement practices are regulated by the: State insurance
departments
23. Karen is a producer who has obtained personal information about a client without having
a legitimate reason to do so. Under the McCarran-Ferguson Act, what is the minimum
penalty for this?: $10,000
24. What is known as the immediate specific event causing loss and giving rise to risk: peril
25. The cause of a loss is referred to as a(n): Peril
26. The term which describes the fact that both parties of a contract may NOT receive the same
value is referred to as: Aleatory
27. In an insurance contract the insurer is the only party legally obligated to perform.
Because of this an insurance contract is considered: unilateral
28. According to life insurance contract law, insurable interest exists: At the time of
application
29. What is implied authority?: authority not specifically defined in the contract but considered to be an extension of
regular duties
30. When the principal gives the agent authority in writing, it's referred to as: express
authority
31. What makes a policy a unilateral contract: Only the insurer is legally bound to
32. Under a contract of adhesion: The terms must be accepted or rejected in full
MICHIGAN LIFE INSURANCE EXAM 2026 ALL QUESTIONS AND
VERIFIED ANSWERS ALREADY A GRADED WITH EXPERT
FEEDBACK |HIGHLY RECOMMENDED |BRAND NEW!
1. Fair Credit Reporting Act main purpose is to: protect consumers with guidelines regarding credit reporting and
distribution
2. Which of the following protects a policy owner from misrepresentation caused by an
innocent mistake: Incontestable clause
3. A life insurance policy owner was injured in an automobile accident which results in a
total and permanent disability. Which rider would pay a monthly amount because of this
disability: Disability income rider
4. Which scenario would most life insurance policies exclude coverage for: An
individual who has a hobby racing cars once a month
5. Dorian exercised a nonforfeiture option by using his life policy's cash value to purchase an
extended term option. When the term insurance expires: The protection ends
6. What happens when an insurance policy is backdated?: The policy's ettective date is earlier than the
present
7. Rob purchased a standard whole life policy with a $500,000 death benefit when he was age
30. His insurance agent told him the policy would be paid up if he reached age 100. The present
cash value of the policy equals $250,000. Rob recently died at age 60. The death benefit would
be: 500,000
8. How is the cost of a policy affected when a policyowner pays premiums more frequently?:
Increases
9. Intentional withholding of material facts that would affect an insurance policy's validity
is called: Concealment
10. Under Michigan Law, which of the following would NOT be considered an illegal
inducement?: A promotional item with the producer's name and address valued at $5
11. Which contract element is insurable interest a component of?: legal purpose
12. Which type of rider will waive the premium on a child's life insurance policy if the parent
paying the premium dies?: Payor benefit
13. What is the nonforfeiture value of an annuity before annuitization?: All premi-
ums paid, plus interest, minus any withdrawals and surrender charges
14. Who assumes the investment risk with fixed annuity: The insurer
15. ABC Insurance Company transfers part of their risk to XYZ Insurance Com-pany. This
situation is called: Reinsurance
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16. An individual most likely will have an insurance interest in insuring a per-son's life if: An
economic interest exists for the continuance of the insureds life
17. Which of these is NOT subject to income taxation under a MEC: death benefit
18. A policy owner may change two policy features on what type of life insur-ance?: Adjustable
Life
19. Which of these is not the responsibility of a producer: represent the insured
20. Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. She
would like to borrow $15,000 against the cash value. Which of the following statements is TRUE?:
Net death benefit will be reduced if the loan is not repaid
21. An immediate annuity has been purchased with a single premium. When does the
annuitant typically begin receiving benefit payments?: 1 month
22. An insurer's claim settlement practices are regulated by the: State insurance
departments
23. Karen is a producer who has obtained personal information about a client without having
a legitimate reason to do so. Under the McCarran-Ferguson Act, what is the minimum
penalty for this?: $10,000
24. What is known as the immediate specific event causing loss and giving rise to risk: peril
25. The cause of a loss is referred to as a(n): Peril
26. The term which describes the fact that both parties of a contract may NOT receive the same
value is referred to as: Aleatory
27. In an insurance contract the insurer is the only party legally obligated to perform.
Because of this an insurance contract is considered: unilateral
28. According to life insurance contract law, insurable interest exists: At the time of
application
29. What is implied authority?: authority not specifically defined in the contract but considered to be an extension of
regular duties
30. When the principal gives the agent authority in writing, it's referred to as: express
authority
31. What makes a policy a unilateral contract: Only the insurer is legally bound to
32. Under a contract of adhesion: The terms must be accepted or rejected in full
