MI LIFE PRODUCER FINAL EXAM AND
PRACTICE QUESTIONS EXAM 2024-2025
ACTUAL EXAM COMPLETE ACCURATE EXAM
QUESTIONS WITH DETAILED VERIFIED
ANSWERS
John buys a $1 million life insurance policy. He dies two years later and the insurer pays the
$1 million benefit. Even though the premiums never came close to the benefit amount, the
insurer pays the full benefit because the insurance policy is type of contract? - CORRECT
ANSWERS a valued contract//Life insurance policies are valued contracts, which means they
pay a stated amount in the event of a loss. Life insurance contracts, unlike contracts of
indemnity, do not try to judge the actual amount of the loss. Because John bought a life
insurance policy insuring his life for $1 million, that is the amount the policy paid when he
died, regardless of the amount he paid in premiums. A contract of indemnity, on the other
hand, limits the benefit to the amount of the insured's actual loss.
At age 49, Caleb took a $20,000 distribution from his deferred annuity, of which $9,000
represents interest earnings. In addition to paying income tax, what else will Caleb probably
have to pay? - CORRECT ANSWERS a penalty tax of $900//To discourage early withdrawals, a
10 percent penalty tax is imposed on nonannuitized withdrawals before age 59'. This tax is
assessed to the taxable portion of the withdrawal (in this case, $9,000).
If a labor union sponsors a group life insurance plan for its members, which of the following
statements is correct? - CORRECT ANSWERS Premiums must be paid entirely from union
funds or from a combination of union funds and member funds.//If a labor union buys a
group policy to insure its members, the union is the policyowner.
Variable universal life combines features of variable life and universal life. Variable universal
life and universal life are alike in all of the following ways EXCEPT: - CORRECT ANSWERS Both
are considered securities products as well as life insurance.//Variable universal life policies
are considered securities products as well as life insurance. Universal life insurance is not a
security; it is a fixed interest flexible premium product.
As a participant in her employer's group life insurance plan, which of the following would
Mary receive as evidence of her coverage? - CORRECT ANSWERS a certificate of
insurance//With a group life policy, the sponsor of the group plan (e.g., an employer or labor
union) is the policyowner and premium payor. The individual members of the group are the
insureds. The group sponsor receives a master policy, while insured group members receive
a certificate of insurance as evidence of coverage.
,MI LIFE PRODUCER FINAL EXAM AND
PRACTICE QUESTIONS EXAM 2024-2025
ACTUAL EXAM COMPLETE ACCURATE EXAM
QUESTIONS WITH DETAILED VERIFIED
ANSWERS
Social Security provides a variety of programs for eligible workers and their families. What
are its two main programs? - CORRECT ANSWERS OASDI and Medicare//Social Security
provides a variety of programs for eligible workers and their families. Its two main programs
are the Old Age, Survivors, and Disability Insurance (OASDI) program and the Medicare
program.
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 ANSWERS 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 ANSWERS 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 ANSWERS
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 ANSWERS
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 ANSWERS state insurance departments and Financial Industry Regulatory
Authority (FINRA)//To be properly registered to sell variable insurance contracts, producers
,MI LIFE PRODUCER FINAL EXAM AND
PRACTICE QUESTIONS EXAM 2024-2025
ACTUAL EXAM COMPLETE ACCURATE EXAM
QUESTIONS WITH DETAILED VERIFIED
ANSWERS
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 ANSWERS 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
ANSWERS 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
ANSWERS 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 ANSWERS 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.
Jane works for a company that allows employee contributions under a 401(k) plan. When
will Jane become fully vested in her plan contributions? - CORRECT ANSWERS
immediately//While employer contributions to a qualified plan can be subject to a vesting
schedule, participants are always fully vested in their own contributions.
, MI LIFE PRODUCER FINAL EXAM AND
PRACTICE QUESTIONS EXAM 2024-2025
ACTUAL EXAM COMPLETE ACCURATE EXAM
QUESTIONS WITH DETAILED VERIFIED
ANSWERS
Agents must act in the best interests of applicants and insureds. What does this require
them to do? - CORRECT ANSWERS give all important information about a proposed
policy//Agents must act in the applicant's or insured's best interests at all times. This means
that agents must give all important information about a proposed policy. Also, they cannot
misrepresent the terms or conditions of a proposed policy.
What does a viatical settlement allow? - CORRECT ANSWERS It allows a chronically or
terminally ill insured to gain a sum of money that is needed to pay medical expenses or to
enhance the quality of life.//A viatical settlement allows a chronically or terminally ill insured
to gain a sum of money that might be needed to pay medical expenses or to enhance quality
of life.
If an employer/employee group offers group life insurance on a contributory basis, what
percentage of the group must enroll? - CORRECT ANSWERS At least 75 percent of the group
must enroll in the plan//If an employer/employee group life insurance plan is contributory,
75 percent of the group must enroll in the plan. If the plan is non-contributory, 100 percent
of the group must enroll.
Which of the following is NOT a life insurance premium? - CORRECT ANSWERS competitors'
rates//Actuaries base life insurance premiums on three basic factors: mortality (a charge),
interest (a credit), and expenses (a charge).
In calculating their mortality charges, life insurers today generally use: - CORRECT ANSWERS
the 2001 CSO table//The mortality factor is drawn from mortality statistics compiled by the
National Association of Insurance Commissioners (NAIC) into a set of rates called the
Commissioners Standard Ordinary (CSO) table. Policies issued since 2009 are required to
base their mortality charges on the 2001 CSO table.
All of the following are standard life insurance policy nonforfeiture options EXCEPT: -
CORRECT ANSWERS accumulate at interest option//This is a policy dividend option in which
declared dividends are left with the insurer to accumulate interest on the policyowner's
behalf.
PRACTICE QUESTIONS EXAM 2024-2025
ACTUAL EXAM COMPLETE ACCURATE EXAM
QUESTIONS WITH DETAILED VERIFIED
ANSWERS
John buys a $1 million life insurance policy. He dies two years later and the insurer pays the
$1 million benefit. Even though the premiums never came close to the benefit amount, the
insurer pays the full benefit because the insurance policy is type of contract? - CORRECT
ANSWERS a valued contract//Life insurance policies are valued contracts, which means they
pay a stated amount in the event of a loss. Life insurance contracts, unlike contracts of
indemnity, do not try to judge the actual amount of the loss. Because John bought a life
insurance policy insuring his life for $1 million, that is the amount the policy paid when he
died, regardless of the amount he paid in premiums. A contract of indemnity, on the other
hand, limits the benefit to the amount of the insured's actual loss.
At age 49, Caleb took a $20,000 distribution from his deferred annuity, of which $9,000
represents interest earnings. In addition to paying income tax, what else will Caleb probably
have to pay? - CORRECT ANSWERS a penalty tax of $900//To discourage early withdrawals, a
10 percent penalty tax is imposed on nonannuitized withdrawals before age 59'. This tax is
assessed to the taxable portion of the withdrawal (in this case, $9,000).
If a labor union sponsors a group life insurance plan for its members, which of the following
statements is correct? - CORRECT ANSWERS Premiums must be paid entirely from union
funds or from a combination of union funds and member funds.//If a labor union buys a
group policy to insure its members, the union is the policyowner.
Variable universal life combines features of variable life and universal life. Variable universal
life and universal life are alike in all of the following ways EXCEPT: - CORRECT ANSWERS Both
are considered securities products as well as life insurance.//Variable universal life policies
are considered securities products as well as life insurance. Universal life insurance is not a
security; it is a fixed interest flexible premium product.
As a participant in her employer's group life insurance plan, which of the following would
Mary receive as evidence of her coverage? - CORRECT ANSWERS a certificate of
insurance//With a group life policy, the sponsor of the group plan (e.g., an employer or labor
union) is the policyowner and premium payor. The individual members of the group are the
insureds. The group sponsor receives a master policy, while insured group members receive
a certificate of insurance as evidence of coverage.
,MI LIFE PRODUCER FINAL EXAM AND
PRACTICE QUESTIONS EXAM 2024-2025
ACTUAL EXAM COMPLETE ACCURATE EXAM
QUESTIONS WITH DETAILED VERIFIED
ANSWERS
Social Security provides a variety of programs for eligible workers and their families. What
are its two main programs? - CORRECT ANSWERS OASDI and Medicare//Social Security
provides a variety of programs for eligible workers and their families. Its two main programs
are the Old Age, Survivors, and Disability Insurance (OASDI) program and the Medicare
program.
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 ANSWERS 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 ANSWERS 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 ANSWERS
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 ANSWERS
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 ANSWERS state insurance departments and Financial Industry Regulatory
Authority (FINRA)//To be properly registered to sell variable insurance contracts, producers
,MI LIFE PRODUCER FINAL EXAM AND
PRACTICE QUESTIONS EXAM 2024-2025
ACTUAL EXAM COMPLETE ACCURATE EXAM
QUESTIONS WITH DETAILED VERIFIED
ANSWERS
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 ANSWERS 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
ANSWERS 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
ANSWERS 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 ANSWERS 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.
Jane works for a company that allows employee contributions under a 401(k) plan. When
will Jane become fully vested in her plan contributions? - CORRECT ANSWERS
immediately//While employer contributions to a qualified plan can be subject to a vesting
schedule, participants are always fully vested in their own contributions.
, MI LIFE PRODUCER FINAL EXAM AND
PRACTICE QUESTIONS EXAM 2024-2025
ACTUAL EXAM COMPLETE ACCURATE EXAM
QUESTIONS WITH DETAILED VERIFIED
ANSWERS
Agents must act in the best interests of applicants and insureds. What does this require
them to do? - CORRECT ANSWERS give all important information about a proposed
policy//Agents must act in the applicant's or insured's best interests at all times. This means
that agents must give all important information about a proposed policy. Also, they cannot
misrepresent the terms or conditions of a proposed policy.
What does a viatical settlement allow? - CORRECT ANSWERS It allows a chronically or
terminally ill insured to gain a sum of money that is needed to pay medical expenses or to
enhance the quality of life.//A viatical settlement allows a chronically or terminally ill insured
to gain a sum of money that might be needed to pay medical expenses or to enhance quality
of life.
If an employer/employee group offers group life insurance on a contributory basis, what
percentage of the group must enroll? - CORRECT ANSWERS At least 75 percent of the group
must enroll in the plan//If an employer/employee group life insurance plan is contributory,
75 percent of the group must enroll in the plan. If the plan is non-contributory, 100 percent
of the group must enroll.
Which of the following is NOT a life insurance premium? - CORRECT ANSWERS competitors'
rates//Actuaries base life insurance premiums on three basic factors: mortality (a charge),
interest (a credit), and expenses (a charge).
In calculating their mortality charges, life insurers today generally use: - CORRECT ANSWERS
the 2001 CSO table//The mortality factor is drawn from mortality statistics compiled by the
National Association of Insurance Commissioners (NAIC) into a set of rates called the
Commissioners Standard Ordinary (CSO) table. Policies issued since 2009 are required to
base their mortality charges on the 2001 CSO table.
All of the following are standard life insurance policy nonforfeiture options EXCEPT: -
CORRECT ANSWERS accumulate at interest option//This is a policy dividend option in which
declared dividends are left with the insurer to accumulate interest on the policyowner's
behalf.
