MI LIFE PRODUCER STUDY GUIDE 2025/2026 QUESTIONS
AND SOLUTIONS MARKED A+
✔✔Which of the following will NOT be considered unfair discrimination by insurers? -
✔✔Discriminating in benefits and coverages based on the insured's habits and lifestyle
* Discriminating between individuals of the same class, with equal life expectancies, or
by reason of race, nationality, or ethnic group would be considered unfair discrimination.
Insurers are also not allowed to cancel individual coverage due to a change in marital
status. Discriminating in benefits based on the insured's habits and lifestyle (such as
smoking or dangerous hobbies) is acceptable.
✔✔During replacement of life insurance, a replacing insurer must do which of the
following? - ✔✔Obtain a list of all life insurance policies that will be replaced
*The replacing insurance company must require from the producer a list of the
applicant's life insurance or annuity contracts to be replaced and a copy of the
replacement notice provided to the applicant, and send each existing insurance
company a written communication advising of the proposed replacement.
✔✔In comparison to consumer reports, which of the following describes a unique
characteristic of investigative consumer reports? - ✔✔The customer's associates,
friends, and neighbors provide the report's data.
*Both consumer reports and investigative consumer reports provide additional
information from an outside source about a customer's character and reputation, and
both types of reports are used under the Fair Credit Reporting Act. The main difference
is that the information for investigative consumer reports is obtained through an
investigation and interviews with associates, friends and neighbors of the consumer.
✔✔Which of the following insurance arrangements will be appropriate for a parent
buying a life insurance policy on a child where the parent is the policyowner? -
✔✔Third-party ownership
*Contracts that are owned by someone other than the insured are known as third-party
ownership. Most policies involving third-party ownership are written in business
situations or for minors in which the parent owns the policy.
✔✔Which of the following policy components contains the company's promise to pay? -
✔✔Insuring clause
* The insuring clause contains the company's promise to pay.
, ✔✔Which of the following included in the term "insurance-related conduct"? -
✔✔Transmitting funds between producers and the insurance company
*The term "insurance-related conduct" includes acts related to insurance transactions,
such as selling, soliciting, negotiating and binding insurance policies; processing claims;
or transmitting funds between the insured, producers, premium finance companies and
insurance companies.
✔✔Which of the following would be considered a nonmedical insurance application? -
✔✔An application on which the medical information is completed by the applicant and
the agent only
*An application on which all of the questions, including medical history questions, do not
need to be completed by medical professionals, and may be completed by the applicant
and the agent.
✔✔Which option for Universal life allows the beneficiary to collect both the death benefit
and cash value upon the death of the insured? - ✔✔Option B
*Under Option B the death benefit includes the annual increase in cash value so that
the death benefit gradually increases each year by the amount that the cash value
increases. At any point in time, the total death benefit will always be equal to the face
amount of the policy plus the current amount of cash value.
✔✔**A producer was found guilty of a 3rd violation of the Insurance Code. What would
be the monetary penalty he will have to pay? - ✔✔$10,000
*Any person violating an insurance law or regulation is liable to a penalty of no more
than $5,000 for a first offense and no more than $10,000 for each subsequent offense.
✔✔Who can make a fully deductible contribution to a traditional IRA? - ✔✔An individual
not covered by an employer-sponsored plan who has earned income
*Individuals who are not covered by an employer-sponsored plan may deduct the full
amount of their IRA contributions regardless of their income level.
✔✔The term "illustration" in a life insurance policy refers to - ✔✔A presentation of
nonguaranteed elements of a policy.
✔✔An insured has chosen joint and 2/3 survivor as the settlement option. What does
this mean to the beneficiaries? - ✔✔The surviving beneficiary will continue receiving 2/3
of the benefit paid when both beneficiaries were alive.
AND SOLUTIONS MARKED A+
✔✔Which of the following will NOT be considered unfair discrimination by insurers? -
✔✔Discriminating in benefits and coverages based on the insured's habits and lifestyle
* Discriminating between individuals of the same class, with equal life expectancies, or
by reason of race, nationality, or ethnic group would be considered unfair discrimination.
Insurers are also not allowed to cancel individual coverage due to a change in marital
status. Discriminating in benefits based on the insured's habits and lifestyle (such as
smoking or dangerous hobbies) is acceptable.
✔✔During replacement of life insurance, a replacing insurer must do which of the
following? - ✔✔Obtain a list of all life insurance policies that will be replaced
*The replacing insurance company must require from the producer a list of the
applicant's life insurance or annuity contracts to be replaced and a copy of the
replacement notice provided to the applicant, and send each existing insurance
company a written communication advising of the proposed replacement.
✔✔In comparison to consumer reports, which of the following describes a unique
characteristic of investigative consumer reports? - ✔✔The customer's associates,
friends, and neighbors provide the report's data.
*Both consumer reports and investigative consumer reports provide additional
information from an outside source about a customer's character and reputation, and
both types of reports are used under the Fair Credit Reporting Act. The main difference
is that the information for investigative consumer reports is obtained through an
investigation and interviews with associates, friends and neighbors of the consumer.
✔✔Which of the following insurance arrangements will be appropriate for a parent
buying a life insurance policy on a child where the parent is the policyowner? -
✔✔Third-party ownership
*Contracts that are owned by someone other than the insured are known as third-party
ownership. Most policies involving third-party ownership are written in business
situations or for minors in which the parent owns the policy.
✔✔Which of the following policy components contains the company's promise to pay? -
✔✔Insuring clause
* The insuring clause contains the company's promise to pay.
, ✔✔Which of the following included in the term "insurance-related conduct"? -
✔✔Transmitting funds between producers and the insurance company
*The term "insurance-related conduct" includes acts related to insurance transactions,
such as selling, soliciting, negotiating and binding insurance policies; processing claims;
or transmitting funds between the insured, producers, premium finance companies and
insurance companies.
✔✔Which of the following would be considered a nonmedical insurance application? -
✔✔An application on which the medical information is completed by the applicant and
the agent only
*An application on which all of the questions, including medical history questions, do not
need to be completed by medical professionals, and may be completed by the applicant
and the agent.
✔✔Which option for Universal life allows the beneficiary to collect both the death benefit
and cash value upon the death of the insured? - ✔✔Option B
*Under Option B the death benefit includes the annual increase in cash value so that
the death benefit gradually increases each year by the amount that the cash value
increases. At any point in time, the total death benefit will always be equal to the face
amount of the policy plus the current amount of cash value.
✔✔**A producer was found guilty of a 3rd violation of the Insurance Code. What would
be the monetary penalty he will have to pay? - ✔✔$10,000
*Any person violating an insurance law or regulation is liable to a penalty of no more
than $5,000 for a first offense and no more than $10,000 for each subsequent offense.
✔✔Who can make a fully deductible contribution to a traditional IRA? - ✔✔An individual
not covered by an employer-sponsored plan who has earned income
*Individuals who are not covered by an employer-sponsored plan may deduct the full
amount of their IRA contributions regardless of their income level.
✔✔The term "illustration" in a life insurance policy refers to - ✔✔A presentation of
nonguaranteed elements of a policy.
✔✔An insured has chosen joint and 2/3 survivor as the settlement option. What does
this mean to the beneficiaries? - ✔✔The surviving beneficiary will continue receiving 2/3
of the benefit paid when both beneficiaries were alive.
