Michigan Life Insurance State Exam questions and answers latest top score.

Michigan Life Insurance State Exam questions and answers latest top score. Under a traditional IRA, interest is taxed: Only if withdrawn prior to age 59 1/2 According to the capital gains rate Upon distribution During the accumulation phase - correct answers.Upon distribution Which of these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 Earnings are not taxable when withdrawn Earnings are taxable when withdrawn Contribution are never tax deductible Contributions are always made by the employer - correct answers.Earnings are taxable when withdrawn Which of these describes the result of a modified endowment contract that failed to meet the seven- pay test?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 - correct 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 - correct answers.Contain offer and acceptance 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 - correct 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 - correct 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 - correct 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 - correct 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 - correct iation or labor group 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 - correct 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 - correct answers.30 What does the Group Life underwriting risk selection process help protect insurance companies from? Risk aversion Natural selection Adverse selection Risk Management - correct answers.Adverse Selection A guaranteed issue insurance policy has no initial premium requirement incontestable period waiting period medical underwriting - correct 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 - correct 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 - correct 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 - correct 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 - correct 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 The Insurers obligation to pay a death benefit upon an approved death claim The agents obligation to pay a death benefit upon an approved death claim - correct answers.The Insurers obligation to pay a death benefit upon an approved death claim Term insurance is appropriate for someone who seeks living benefits for themselves seeks a policy that builds cash value seeks temporary protection and lower premiums seeks permanent protection and higher premiums - correct temporary protection and lower premiums Bob and Tom start a business. Since each partner contributes an important element to the success of the business, they decide to take life insurance policies out on each other, and name each other as beneficiaries. Eventually, they retire and dissolve the business. Bob dies 12 months later. The policies continue in force with no change. Both partners are still married at the time of Bob's death. In this situation, who will receive Bob's policy proceeds? Toms estate Bobs estate Bobs spouse - correct answers.Tom Michigan requires that a licensee complete __ hours of continuing education on the subject of ethics every reporting period 1 2 3 4 - correct answers.3 What kind of insurance policy issued by a mutual insurer provides a return of divisible surplus? Nonparticipating life insurance policy participating life insurance policy divisible surplus life insurance policy straight life insurance policy - correct answers.Participating life insurance policy Which of these would limit a company's liability to provide insurance coverage? Waiver Exclusion Rider Provision - correct answers.Exclsuion How do insurers predict the increase of individual risks? Law of large numbers U.S. Census Average mortality incidents Experience of morbidity - correct answers.Law of large numbers Pre-death distributions from a modified endowment contract (MEC) receive different tax treatment than other life insurance policies because the MEC has tax deductible premiums the MEC is considered an illegal product the MEC tends to be an investment vehicle the MEC does not accumulate cash value - correct MEC tends to be an investment vehicle Peter has a policy where 80% to 90% of the premium is invested in traditional fixed income securities and the remainder of the premium is invested in contracts tied to a stipulated stock index. What kind of policy is this? Modified Endowment Contract Current assumptive whole life Credit life insurance Equity index whole life - correct answers.Equity index whole life A life insurance rider that allows an individual to purchase insurance as they grow older, regardless of insurability is called a(n) guaranteed term rider guaranteed insurability rider accelerated benefit rider cost of living rider - correct nteed insurability rider Which type of policy combines the flexibility of a universal life policy with investment choices Adjustable universal life policy Flexible universal life policy Variable universal life policy Modified universal life policy - correct answers.Variable universal life policy Which of the following is an annuity that is linked to a market related index? Market related annuity Equity indexed annuity Deferred risk annuity Fixed amount annuity - correct answers.Equity indexed annuity Paul the producer has provided a false statement in relation to an insurance claim. Which illegal act has been committed? Intimidation Rebating