1 | Page
Final Exam - Michigan Life and Health
Questions and Correct Answers
defamation Ans: — Making a statement that is false or maliciously
critical of the financial condition of an insurer is known as
Business overhead expense policy Ans: — Which type of business
insurance is meant to cover the costs of continuing to do business
while the owner is disabled?
the protection ends Ans: — Dorian exercised a nonforfeiture
option by using his life policy's cash value to purchase an
extended term insurance option. When the term insurance expires,
must have an appointed guardian Ans: — To receive proceeds
from a death benefit, a minor
The insurer's obligation to pay a death benefit upon an approved
death claim Ans: — Under a life insurance policy, what does the
insuring clause state?
When contribution or participation rules have been violated Ans:
— When can a group health policy renewal be denied according to
the Health Insurance Portability and Accountability Act (HIPAA)?
It allows for cash advances to be paid against the death benefit if
the insured becomes terminally ill Ans: — What is the purpose for
having an accelerated death benefit on a life insurance policy?
Variable universal policy Ans: — Which type of life insurance
offers flexible premiums, a flexible death benefit, and the choice of
how the cash value will be invested?
1 month Ans: — An immediate annuity has been purchased with a
single premium. When does the annuitant typically begin receiving
benefit payments?
an authorized agency makes a written request to the insurer
during an insurance fraud investigation Ans: — Consumer privacy
regulations permit the release of an insured's financial
information when
© 2025 All rights reserved
, 2 | Page
the right to return the policy for a full refund within a specified
number of days Ans: — The free-look provision gives the
policyowner
Net death benefit will be reduced if the loan is not repaid Ans: —
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?
modified application with a new signature Ans: — Tara the
producer is delivering a specified disease insurance policy to a
new policyowner. Upon delivery, she may be expected to collect all
of the following EXCEPT a(n)
Annuitization phase Ans: — Which of the following is considered
to be the period when the accumulated value in an annuity is paid
out?
Department of Insurance and Financial Services (DIFS) Ans: — The
entity that has the power to revoke a producer's insurance license
is the
The shorter the payment period, the higher the premium Ans: —
The statement which best describes the relationship between the
premiums of a whole life policy and the premium payment period
is
universal life Ans: — A life insurance policy that is subject to a
contract interest rate is referred to as
Average age Ans: — Which of these factors would an insurer
consider when determining whether to accept a group life plan?
is eligible for coverage upon hire Ans: — According to HIPAA,
when an insured individual leaves an employer and immediately
begins working for a new company that offers group health
insurance, the individual
$5,000 Ans: — An insured has a stop-loss limit of $5,000, a
deductible of $500, and an 80/20 coinsurance. The insured incurs
$25,000 of covered losses. How much will the insured have to pay?
© 2025 All rights reserved
, 3 | Page
Guaranteed insurability rider Ans: — Barbara's policy includes a
rider which allows her to purchase additional insurance at specific
dates or events without evidence of insurability. This rider is
called a(n)
Pay age-corrected benefits Ans: — What is an insurer required to
do when faced with an error made under the Misstatement of Age
provision?
twisting Ans: — The unfair trade practice of replacing an
insurance policy from one insurer to another based on
misrepresentation is called
Life annuity Ans: — Which type of annuity stops all payments
upon the death of the annuitant?
liquidity Ans: — An insurer's ability to make unpredictable
payouts to policyowners is called
Exclusion Ratio Ans: — The taxable portion of each annuity
payment is calculated using which method?
adverse selection Ans: — Group dental plans will frequently place
a limit on annual benefits in order to minimize
subrogation Ans: — An insurer has the right to recover payment
made to the insured from the negligent party. These rights are
called
The greater of the accumulated cash value or the total premium
paid Ans: — What will the beneficiary receive if an annuitant dies
during the accumulation period?
time deductible Ans: — A disability elimination period is best
described as a
have a legitimate non-insurance purpose Ans: — An association
wanting to buy insurance under a group health plan MUST
Talking Ans: — In a Long-Term Care policy, activities of daily
living (ADL's) can be each of the following EXCEPT
Stock purchase Ans: — All of the following are exempt from the
10% tax penalty for early qualified plan withdrawals EXCEPT
© 2025 All rights reserved
, 4 | Page
represents the insurer Ans: — In the state of Michigan, a licensed
producer
Giving the insured an article of merchandise printed with the
producer's name costing $5 Ans: — Which of the following is NOT
an illegal inducement?
100% of his health insurance costs can be deducted from his gross
income Ans: — Lorenzo is self employed with an S corporation. He
is unmarried and had a net profit for the tax year. What are the tax
ramifications of his health insurance premiums paid for the year?
Long Term Care Insurance premiums Ans: — The IRS states that a
taxpayer's medical expenses that exceed 7.5% of their adjusted
gross income is tax deductible. Which of the following may be
considered a medical expense under this rule?
Specified amount of money Ans: — What does a life insurance
policy guarantee to the stated beneficiary upon the death of the
insured?
12% per annum Ans: — In the state of Michigan, properly filed
health claims that 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
It must include outpatient prescription drug coverage Ans: — A
Medicare Supplement policy issued in the state of Michigan is
required to provide each of the following EXCEPT
seeks temporary protection and lower premiums Ans: — Term
insurance is appropriate for someone who
a disease Ans: — A fee for service health insurance plan will
normally cover
Integrated deductible Ans: — Which of the following types of
deductibles would apply a single deductible to both medical and
dental insurance coverage?
2 years Ans: — When can a life policy no longer be cancelled for
nonfraudulent misstatements after its date of issue?
© 2025 All rights reserved
Final Exam - Michigan Life and Health
Questions and Correct Answers
defamation Ans: — Making a statement that is false or maliciously
critical of the financial condition of an insurer is known as
Business overhead expense policy Ans: — Which type of business
insurance is meant to cover the costs of continuing to do business
while the owner is disabled?
the protection ends Ans: — Dorian exercised a nonforfeiture
option by using his life policy's cash value to purchase an
extended term insurance option. When the term insurance expires,
must have an appointed guardian Ans: — To receive proceeds
from a death benefit, a minor
The insurer's obligation to pay a death benefit upon an approved
death claim Ans: — Under a life insurance policy, what does the
insuring clause state?
When contribution or participation rules have been violated Ans:
— When can a group health policy renewal be denied according to
the Health Insurance Portability and Accountability Act (HIPAA)?
It allows for cash advances to be paid against the death benefit if
the insured becomes terminally ill Ans: — What is the purpose for
having an accelerated death benefit on a life insurance policy?
Variable universal policy Ans: — Which type of life insurance
offers flexible premiums, a flexible death benefit, and the choice of
how the cash value will be invested?
1 month Ans: — An immediate annuity has been purchased with a
single premium. When does the annuitant typically begin receiving
benefit payments?
an authorized agency makes a written request to the insurer
during an insurance fraud investigation Ans: — Consumer privacy
regulations permit the release of an insured's financial
information when
© 2025 All rights reserved
, 2 | Page
the right to return the policy for a full refund within a specified
number of days Ans: — The free-look provision gives the
policyowner
Net death benefit will be reduced if the loan is not repaid Ans: —
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?
modified application with a new signature Ans: — Tara the
producer is delivering a specified disease insurance policy to a
new policyowner. Upon delivery, she may be expected to collect all
of the following EXCEPT a(n)
Annuitization phase Ans: — Which of the following is considered
to be the period when the accumulated value in an annuity is paid
out?
Department of Insurance and Financial Services (DIFS) Ans: — The
entity that has the power to revoke a producer's insurance license
is the
The shorter the payment period, the higher the premium Ans: —
The statement which best describes the relationship between the
premiums of a whole life policy and the premium payment period
is
universal life Ans: — A life insurance policy that is subject to a
contract interest rate is referred to as
Average age Ans: — Which of these factors would an insurer
consider when determining whether to accept a group life plan?
is eligible for coverage upon hire Ans: — According to HIPAA,
when an insured individual leaves an employer and immediately
begins working for a new company that offers group health
insurance, the individual
$5,000 Ans: — An insured has a stop-loss limit of $5,000, a
deductible of $500, and an 80/20 coinsurance. The insured incurs
$25,000 of covered losses. How much will the insured have to pay?
© 2025 All rights reserved
, 3 | Page
Guaranteed insurability rider Ans: — Barbara's policy includes a
rider which allows her to purchase additional insurance at specific
dates or events without evidence of insurability. This rider is
called a(n)
Pay age-corrected benefits Ans: — What is an insurer required to
do when faced with an error made under the Misstatement of Age
provision?
twisting Ans: — The unfair trade practice of replacing an
insurance policy from one insurer to another based on
misrepresentation is called
Life annuity Ans: — Which type of annuity stops all payments
upon the death of the annuitant?
liquidity Ans: — An insurer's ability to make unpredictable
payouts to policyowners is called
Exclusion Ratio Ans: — The taxable portion of each annuity
payment is calculated using which method?
adverse selection Ans: — Group dental plans will frequently place
a limit on annual benefits in order to minimize
subrogation Ans: — An insurer has the right to recover payment
made to the insured from the negligent party. These rights are
called
The greater of the accumulated cash value or the total premium
paid Ans: — What will the beneficiary receive if an annuitant dies
during the accumulation period?
time deductible Ans: — A disability elimination period is best
described as a
have a legitimate non-insurance purpose Ans: — An association
wanting to buy insurance under a group health plan MUST
Talking Ans: — In a Long-Term Care policy, activities of daily
living (ADL's) can be each of the following EXCEPT
Stock purchase Ans: — All of the following are exempt from the
10% tax penalty for early qualified plan withdrawals EXCEPT
© 2025 All rights reserved
, 4 | Page
represents the insurer Ans: — In the state of Michigan, a licensed
producer
Giving the insured an article of merchandise printed with the
producer's name costing $5 Ans: — Which of the following is NOT
an illegal inducement?
100% of his health insurance costs can be deducted from his gross
income Ans: — Lorenzo is self employed with an S corporation. He
is unmarried and had a net profit for the tax year. What are the tax
ramifications of his health insurance premiums paid for the year?
Long Term Care Insurance premiums Ans: — The IRS states that a
taxpayer's medical expenses that exceed 7.5% of their adjusted
gross income is tax deductible. Which of the following may be
considered a medical expense under this rule?
Specified amount of money Ans: — What does a life insurance
policy guarantee to the stated beneficiary upon the death of the
insured?
12% per annum Ans: — In the state of Michigan, properly filed
health claims that 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
It must include outpatient prescription drug coverage Ans: — A
Medicare Supplement policy issued in the state of Michigan is
required to provide each of the following EXCEPT
seeks temporary protection and lower premiums Ans: — Term
insurance is appropriate for someone who
a disease Ans: — A fee for service health insurance plan will
normally cover
Integrated deductible Ans: — Which of the following types of
deductibles would apply a single deductible to both medical and
dental insurance coverage?
2 years Ans: — When can a life policy no longer be cancelled for
nonfraudulent misstatements after its date of issue?
© 2025 All rights reserved
