MICHIGAN LIFE INSURANCE STATE MICROBIOLOGY PRACTICE EXAM QUESTIONS WITH CORRECT DETAILED ANSWERS | ALREADY GRADED A+RECENT VERSION

MICHIGAN LIFE INSURANCE STATE MICROBIOLOGY PRACTICE EXAM QUESTIONS WITH CORRECT DETAILED ANSWERS | ALREADY GRADED A+RECENT VERSION 1) unfairly discriminate against a person in any way on an insurance related matter - ANSWER replacing an insurance policy from one insurer to another based on misrepresentation 2) Which is NOT a goal of risk retention? - ANSWER minimize insured's level of liability in the event of a loss 3) What statement about group life is correct? - ANSWER cost of coverage is based on a ratio of men to women 4) What best describes the MIB? - ANSWER Nonprofit organization that has underwriting info on applicants 5) If during the underwriting process the insurer obtains personal info about the applicant from the applicant, when must the producer provide notice of information about practices? - ANSWER time of policy delivery 6) temporary license valid for max of - ANSWER 180 days 7) false statements about the financial condition of any insurer - ANSWER defamation 8) Best reason to purchase life insurance rather than annuities - ANSWER create an estate 9) What limits the amount a policy owner may borrow? - ANSWER Cash value 10) What are the Four Elements of an Insurance contract? - ANSWER Agreement, consideration, competent parties, legal purpose 11) What type of insurance company is organized to return any surplus money to its policyholders? - ANSWER Mutual 12) What are the strategies to prevent adverse selection? - ANSWER Restriction of coverage, refusal to accept risk, accepting risk at a higher rate 13) What type of report provides information about the applicant's hobbies, habits, and financial status? - ANSWER Investigative Consumer Report 14) What are the three factors that determine the premium? - ANSWER Mortality, interest, expense 15) Life insurance may be used to pay estate taxes to avoid selling assets from the estate. What is this called? - ANSWER Estate Conversion 16) What type of life insurance is best suited to cover a mortgage? - ANSWER Decreasing term 17) What elements of an adjustable life policy can be changed by the policyowner? - ANSWER Amount and payment period of the premium, face amount, and period for protection 18) What type of assignment Is used to secure the payment of a debt with an existing life insurance policy? - ANSWER Collateral Assignment 19) What are the 3 nonforfeiture options? - ANSWER cash surrender, reduced paid-up insurance, extended term insurance 20) What are the 6 dividend options? - ANSWER cash, reduced premium, accumulation at interest, paid up option, one year term, acceleration of endowment 21) What nonforfeiture option provides the longest coverage? - ANSWER reduced paid-up 22) Three common exclusions in life insurance policies - ANSWER Military, hazardous occupation, aviation 23) Five settlement options: - ANSWER Fixed amount, fixed period, lump-sum, life income, interest only · Nonforfeiture option automatically chosen if not chosen by insured: - ANSWER extended term · What are the two classifications of annuities according to the time they begin making annuity payments? - ANSWER immediate and deferred · An annuity purchased with multiple payments that begin income payments after one year from the moment of purchase is what type of annuity? - ANSWER flexible premium deferred annuity · What type of annuity requires an agent to have a securities license? - ANSWER variable · What type of annuity provides a set amount of income for two or more people with the income ceasing upon the first death? - ANSWER joint life · Two types of annuity refunds - ANSWER cash and installment · What causes variable annuity benefit to vary? - ANSWER The annuity's underlying investments 24) Pays highest benefit until annuitant dies - ANSWER straight life 25) What portion of a nonqualified annuity payment would be taxed? - ANSWER Interest earned on principal 26) Examples of qualified plans: - ANSWER IRA, 401(k), HR-10 (Keogh), SEP, SIMPLE 27) Penalty for excessive IRA contributions: - ANSWER 6% 28) Good plan for self-employed people: - ANSWER HR-10 29) Example of a qualified profit sharing plan is: - ANSWER 401(k) 30) Most common penalties for violations of insurance statutes? - ANSWER Cease and desist order, fine, license suspension or revocation 31) Who can be excluded from producer licensing and examination requirements? - ANSWER Insurance company officers, directors, or any other employees who do not transact insurance and who do not receive commissions. 32) The order that will be issued if a producer is found to be participating in an unfair practice: - ANSWER Cease and Desist 33) misrepresentation that persuades an insured to cancel, lapse, or switch policies when it would not be for the insured's benefit - ANSWER twisting 34) Licensee that represents the insured - ANSWER broker 35) The type of settlement option which pays throughout the lifetimes of two or more beneficiaries is called - ANSWER Joint and Survivor 36) Describes when insurance policies are NOT drawn up through negotiations and the insured has little to say about the provisions - ANSWER adhesion 37) contracts prepared by one party and submitted to the other party on a take it or leave it basis - ANSWER Adhesion contract 38) Joint and 2/3 survivor settlement options meaning for the beneficiaries: - ANSWER surviving beneficiary will receive 2/3 of the benefit paid when both were alive 39) what policy is there a Limit for withdrawal of cash value and insurer charges a fee - ANSWER Universal life 40) Circulating deceptive sales material to the public is what type of Unfair Trade Practice? - ANSWER False advertising 41) A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will - ANSWER pay the policy proceeds only if it would have issued the policy 42) How long will the beneficiary receive payments under the single life settlement option? - ANSWER Until beneficiary's death 43) misrepresentation or incomplete comparison of policies can result in a fine of: - ANSWER $2,000