1 | Page
Final Exam-Michigan Life and Health
Questions and Correct Answers
What amount will be paid under a policy where the insured
misstated his/her age? Ans: — an amount the premium would
have purchased at the correct age
the acceptance of a credit life application requires the submission
of a certificate of insurance to the insured within_____ days Ans:
— 30 days
which of these is considered to be a Living benefit option in a life
insurance policy Ans: — Accelerated death benefit
loans obtained by a policy owner against the cash value of a life
insurance policy Ans: — would not be treated as taxable income
A long term care policy typically provides all of the following
levels of care EXCEPT Ans: — acute care
the elimination period under a hospital indemnity plan is Ans: —
the specific # of days an insured must wait before becoming
eligible to receive benefits for each hospitalization
what is an insurance policy's grace period? Ans: — Period of time
after the premium is due but the policy remains in force
How do interest earnings accumulate in a deferred annuity Ans: —
On a tax-deferred basis
a licensee who is required to take continuing education Must
include how many ethics coursework hours Ans: — 3
the automatic premium loan provision authorizes an insurer to
withdraw from a policy's cash value the amount of Ans: — Past
due premiums that have not been paid by the end of the grace
period
health insurance involves two perils, accident and ______ Ans: —
sickness
© 2025 All rights reserved
, 2 | Page
Who is responsible for assembling the policy forms for insureds
Ans: — Insurance carriers
a securities license is required for a life insurance producer to sell
Ans: — variable life insurance
Which of the following is NOT an illegal inducement Ans: — giving
the insured an article of merchandise printed with the producers
name costing 5$
Which of the following is NOT a federal requirement of a qualified
plan? Ans: — employee must be able to make unlimited
contributions
Which dividend option would an insurer invest the policy owner's
money and add any interest earnings as the dividends accrue?
Ans: — Accumulation at interest option
a health insurance policy will typically cover Ans: — preventative
health services
a life insurance policy owner was injured in a car accident which
results in a total and permanent disability. which rider would pay
a monthly amount because of this disability? Ans: — Disability
income rider
in addition to the actual policy, an entire contract includes which
of the following? Ans: — the application
field underwriting preformed by the producer involves Ans: —
completing the application and collecting initial premium
Kathy pays a monthly premium on her health insurance policy.
How long is her grace period? Ans: — 10 days
Pierre is covered by his employer's group major medical plan. His
employer pays for 75% of the premium and he pays for 25%. How
much would a $10,000 benefit be taxable as income under this
plan? Ans: — 0$
-benefits that fall under a major medical plan are considered to be
a reimbursement for a loss, and is not taxable as income
© 2025 All rights reserved
, 3 | Page
After an insured gives notice of loss, what must he/she do if the
insurer does not furnish forms? Ans: — file a written proof of loss
Under long term care insurance, which of the following MUST an
insurer offer to each policy owner at the time of purchase? Ans: —
An inflation protection feature
What is the primary factor that determines the benefits paid under
a disability income policy? Ans: — Wages
What is the tax liability for employer contributions in Health
Savings Accounts (HSA's)? Ans: — No tax payment needed
-Employer paid contributions to HSA's are tax free to the employee
In the state of MI, properly filed health claims are not timely paid
require the insurer to pay simple interest from a date 60 days
from satisfactory proof of loss at the rate of? Ans: — 12% annum
In MI, legal action can be taken against an insurer for failure to pay
HEALTH insurance claims for a period not to exceed Ans: — 3
years
Donald is the primary insured of life insurance policy and adds a
children's term rider. What is the advantage of adding this rider?
Ans: — Can be converted to permanent coverage without evidence
of insurability
-An advantage of a children's term rider is the ability to convert to
permanent insurance without evidence of insurability
When an insured changes to a more hazardous occupation, which
disability policy provision allows an insurer to adjust policy
benefits and rates? Ans: — Change of occupation provision
The unfair trade practice of replacing an insurance policy from
one insurer to another based on misrepresentation is called? Ans:
— Twisting
© 2025 All rights reserved
Final Exam-Michigan Life and Health
Questions and Correct Answers
What amount will be paid under a policy where the insured
misstated his/her age? Ans: — an amount the premium would
have purchased at the correct age
the acceptance of a credit life application requires the submission
of a certificate of insurance to the insured within_____ days Ans:
— 30 days
which of these is considered to be a Living benefit option in a life
insurance policy Ans: — Accelerated death benefit
loans obtained by a policy owner against the cash value of a life
insurance policy Ans: — would not be treated as taxable income
A long term care policy typically provides all of the following
levels of care EXCEPT Ans: — acute care
the elimination period under a hospital indemnity plan is Ans: —
the specific # of days an insured must wait before becoming
eligible to receive benefits for each hospitalization
what is an insurance policy's grace period? Ans: — Period of time
after the premium is due but the policy remains in force
How do interest earnings accumulate in a deferred annuity Ans: —
On a tax-deferred basis
a licensee who is required to take continuing education Must
include how many ethics coursework hours Ans: — 3
the automatic premium loan provision authorizes an insurer to
withdraw from a policy's cash value the amount of Ans: — Past
due premiums that have not been paid by the end of the grace
period
health insurance involves two perils, accident and ______ Ans: —
sickness
© 2025 All rights reserved
, 2 | Page
Who is responsible for assembling the policy forms for insureds
Ans: — Insurance carriers
a securities license is required for a life insurance producer to sell
Ans: — variable life insurance
Which of the following is NOT an illegal inducement Ans: — giving
the insured an article of merchandise printed with the producers
name costing 5$
Which of the following is NOT a federal requirement of a qualified
plan? Ans: — employee must be able to make unlimited
contributions
Which dividend option would an insurer invest the policy owner's
money and add any interest earnings as the dividends accrue?
Ans: — Accumulation at interest option
a health insurance policy will typically cover Ans: — preventative
health services
a life insurance policy owner was injured in a car accident which
results in a total and permanent disability. which rider would pay
a monthly amount because of this disability? Ans: — Disability
income rider
in addition to the actual policy, an entire contract includes which
of the following? Ans: — the application
field underwriting preformed by the producer involves Ans: —
completing the application and collecting initial premium
Kathy pays a monthly premium on her health insurance policy.
How long is her grace period? Ans: — 10 days
Pierre is covered by his employer's group major medical plan. His
employer pays for 75% of the premium and he pays for 25%. How
much would a $10,000 benefit be taxable as income under this
plan? Ans: — 0$
-benefits that fall under a major medical plan are considered to be
a reimbursement for a loss, and is not taxable as income
© 2025 All rights reserved
, 3 | Page
After an insured gives notice of loss, what must he/she do if the
insurer does not furnish forms? Ans: — file a written proof of loss
Under long term care insurance, which of the following MUST an
insurer offer to each policy owner at the time of purchase? Ans: —
An inflation protection feature
What is the primary factor that determines the benefits paid under
a disability income policy? Ans: — Wages
What is the tax liability for employer contributions in Health
Savings Accounts (HSA's)? Ans: — No tax payment needed
-Employer paid contributions to HSA's are tax free to the employee
In the state of MI, properly filed health claims are not timely paid
require the insurer to pay simple interest from a date 60 days
from satisfactory proof of loss at the rate of? Ans: — 12% annum
In MI, legal action can be taken against an insurer for failure to pay
HEALTH insurance claims for a period not to exceed Ans: — 3
years
Donald is the primary insured of life insurance policy and adds a
children's term rider. What is the advantage of adding this rider?
Ans: — Can be converted to permanent coverage without evidence
of insurability
-An advantage of a children's term rider is the ability to convert to
permanent insurance without evidence of insurability
When an insured changes to a more hazardous occupation, which
disability policy provision allows an insurer to adjust policy
benefits and rates? Ans: — Change of occupation provision
The unfair trade practice of replacing an insurance policy from
one insurer to another based on misrepresentation is called? Ans:
— Twisting
© 2025 All rights reserved
