/////…/.//,.,./.,./.,..,..//…,,…..,,,,,..////.,.,.,[]][‘;@@@2../././/…../////…/;;;.//
Michigan Department of
Insurance and Financial Services
(DIFS) Personal Lines Insurance
Exam 2026/2027 | Complete Exam
Review | Practice Questions,
Detailed Answer Rationales & PSI
Licensing Prep
Fair Credit Reporting Act main purpose is to
protect consumers with guidelines regarding credit reporting and distribution
Which of the following protects a policy owner from misrepresentation caused by an innocent
mistake
Incontestable clause
A life insurance policy owner was injured in an automobile accident which results in a total and
permanent disability. Which rider would pay a monthly amount because of this disability
Disability income rider
,/////…/.//,.,./.,./.,..,..//…,,…..,,,,,..////.,.,.,[]][‘;@@@2../././/…../////…/;;;.//
Which scenario would most life insurance policies exclude coverage for
An individual who has a hobby racing cars once a month
Dorian exercised a nonforfeiture option by using his life policy's cash value to purchase an
extended term option. When the term insurance expires
The protection ends
What happens when an insurance policy is backdated?
The policy's effective date is earlier than the present
Rob purchased a standard whole life policy with a $500,000 death benefit when he was age 30.
His insurance agent told him the policy would be paid up if he reached age 100. The present cash
value of the policy equals $250,000. Rob recently died at age 60. The death benefit would be
500,000
How is the cost of a policy affected when a policyowner pays premiums more frequently?
Increases
Intentional withholding of material facts that would affect an insurance policy's validity is called
Concealment
, /////…/.//,.,./.,./.,..,..//…,,…..,,,,,..////.,.,.,[]][‘;@@@2../././/…../////…/;;;.//
Under Michigan Law, which of the following would NOT be considered an illegal inducement?
A promotional item with the producer's name and address valued at $5
Which contract element is insurable interest a component of?
legal purpose
Which type of rider will waive the premium on a child's life insurance policy if the parent paying
the premium dies?
Payor benefit
What is the nonforfeiture value of an annuity before annuitization?
All premiums paid, plus interest, minus any withdrawals and surrender charges
Who assumes the investment risk with fixed annuity
The insurer
ABC Insurance Company transfers part of their risk to XYZ Insurance Company. This situation
is called
Reinsurance
An individual most likely will have an insurance interest in insuring a person's life if
Michigan Department of
Insurance and Financial Services
(DIFS) Personal Lines Insurance
Exam 2026/2027 | Complete Exam
Review | Practice Questions,
Detailed Answer Rationales & PSI
Licensing Prep
Fair Credit Reporting Act main purpose is to
protect consumers with guidelines regarding credit reporting and distribution
Which of the following protects a policy owner from misrepresentation caused by an innocent
mistake
Incontestable clause
A life insurance policy owner was injured in an automobile accident which results in a total and
permanent disability. Which rider would pay a monthly amount because of this disability
Disability income rider
,/////…/.//,.,./.,./.,..,..//…,,…..,,,,,..////.,.,.,[]][‘;@@@2../././/…../////…/;;;.//
Which scenario would most life insurance policies exclude coverage for
An individual who has a hobby racing cars once a month
Dorian exercised a nonforfeiture option by using his life policy's cash value to purchase an
extended term option. When the term insurance expires
The protection ends
What happens when an insurance policy is backdated?
The policy's effective date is earlier than the present
Rob purchased a standard whole life policy with a $500,000 death benefit when he was age 30.
His insurance agent told him the policy would be paid up if he reached age 100. The present cash
value of the policy equals $250,000. Rob recently died at age 60. The death benefit would be
500,000
How is the cost of a policy affected when a policyowner pays premiums more frequently?
Increases
Intentional withholding of material facts that would affect an insurance policy's validity is called
Concealment
, /////…/.//,.,./.,./.,..,..//…,,…..,,,,,..////.,.,.,[]][‘;@@@2../././/…../////…/;;;.//
Under Michigan Law, which of the following would NOT be considered an illegal inducement?
A promotional item with the producer's name and address valued at $5
Which contract element is insurable interest a component of?
legal purpose
Which type of rider will waive the premium on a child's life insurance policy if the parent paying
the premium dies?
Payor benefit
What is the nonforfeiture value of an annuity before annuitization?
All premiums paid, plus interest, minus any withdrawals and surrender charges
Who assumes the investment risk with fixed annuity
The insurer
ABC Insurance Company transfers part of their risk to XYZ Insurance Company. This situation
is called
Reinsurance
An individual most likely will have an insurance interest in insuring a person's life if
