Michigan life insurance state exam
answer key With 157 Questions and
answers Revised edition 2025
Which is TRUE regarding the annuitant, when the annuitant is NOT the policy owner?
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1. The annuitant has the right to name the beneficiary
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2. The annuitant is the person paying the premiums
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3. The cash value is available to the annuitant for withdrawals
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4. Annuity payments will be based on the annuitants life expectancy - Correct Answers
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Annuity payments will be based on the annuitants life expectancy
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Signing an applicants name for insurance is known as...?
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1. Concealment
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2. Defamation
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3. Coercion
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4. Forgery - Correct Answers 4. Forgery
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l Failure to pay a penalty assessed by the commissioner may result in...?
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1. Revoked or suspended license
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2. Require the license to retake the examination
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3. Complete 5 extra hours of continuing education
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4. Pay a late charge of 1.5% - Correct Answers 1. Revoked or suspended license
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Two business business partners own life insurance, which or the following allows the
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l surviving partner to use death benefit to purchase the deceased owners share?
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1. Buy-sell agreement
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2. Key employee life insurance
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3. Business continuation
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,4. Accidental death - Correct Answers 1. Buy-sell agreement
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l Policy owner surrenders a policy for its cash value, when is tax liability incurred?
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1. The cash value exceeds all premiums paid
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2. The cash value is less than premiums paid
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3. The policy is exchanged for a policy of equal value
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4. The party is transferred to a third party - Correct Answers 1. The cash value exceeds all
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premiums paid
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When is insurable interest required?
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1. At time of claim
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2. At time of application
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3. In event of a policy loan
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4. Within the first year of death - Correct Answers 2. At the time of application
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Which of the following best describes a single premium cash policy?
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1. It requires only one payment to make the policy paid up
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2. It provides for only one premium to be paid without evidence of insurability
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3. It waives one future premium of the owner becomes disabled
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4. It requires the policy owner to pay one premium annually - Correct Answers 1. It requires
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only one payment to make the policy paid up
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When life insurance is funded by contributions to a qualified retirement...
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1. Premiums are taxable
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2. Death benefits are taxable
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3. The insurance must be incidental to the plan
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4. Death benefits are paid to the employer - Correct Answers 1. Premiums are taxable
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l How does a graded premium whole life policy differ from a modified premium?
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,1. It increase the premium annually during the first several years of the policy
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2. It increase the premium annually for the duration of the policy
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3. It increases the premium once during the duration of the policy
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4. It has lower premium for the duration of the policy - Correct Answers 1. It has a lower
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premium for the duration of the policy
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Which of the following is NOT true about converting a group policy into an individual policy?
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1. The converted policy must be the same amount as the group coverage
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2. Group policies must include a guarantee of conversion
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3. Coverage continues during the conversion period
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4. Proof of insurability must be required - Correct Answers 4. Proof of insurability must be
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required
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l Before doing business under an assumed name, who must the producer first notify?
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1. Insured
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2. insurer
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3. Commissioner
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4. Insurance agency - Correct Answers 3. Commissioner
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Which writer allows you to purchase additional insurance without underwriting or specific
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l dates?
1. Guaranteed renewability
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2. Guaranteed insurability
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3. Cost of living
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4. Disability income - Correct Answers 2. Guaranteed insurability
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Which of the following is a life insurance contract written on the life of an individual?
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1. Insurance
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, 2. Survivorship policy
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3. Joint life contract
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4. Single life insurance - Correct Answers 4. Single life Insurance
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An Insurance policy lapsed due to nonpayment of premium to activate the reinstatement
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l clause...
1. Play the premium within 15 days of the grace period.
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2. Provide the insurer with the evidence of insurability
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3. Apply for a new life insurance policy
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4. Demonstrate the incontestable clause can be invoked - Correct Answers 2. Provide the
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insurer with the evidence of insurability
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Term life insurance differs from permanent life insurance in that MOST often, term life
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l insurance... - Correct Answers Remains in force for a specific period of time l ll l llll l l l l l l l l
Which activity does NOT require an insurance producer's license? - Correct Answers
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l Underwriting
Which nonforfeiture option allows the policy owner to purchase less coverage for life?
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1. Reduced paid-up insurance
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2. Cash surrender value
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3. Settlement value
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4. Extended term - Correct Answers 1. Reduced paid-up insurance
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l If the annuitant dies before the annuity start date, the interest earned is...
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1. Taxable l
2. Nontaxablel
3. Never taxed
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4. Taxed if the beneficiary is a spouse - Correct Answers 1. Taxable
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Which type of annuity guarantees a level benefit payment?
l l l l l l l l l
answer key With 157 Questions and
answers Revised edition 2025
Which is TRUE regarding the annuitant, when the annuitant is NOT the policy owner?
l l l l l l l l l l l l l
1. The annuitant has the right to name the beneficiary
l l l l l l l l l
2. The annuitant is the person paying the premiums
l l l l l l l l l
3. The cash value is available to the annuitant for withdrawals
l l l l l l l l l l
4. Annuity payments will be based on the annuitants life expectancy - Correct Answers
l l l l l l l l l l l ll l lll
Annuity payments will be based on the annuitants life expectancy
l l l l l l l l l l
Signing an applicants name for insurance is known as...?
l l l l l l l l l
1. Concealment
l
2. Defamation
l l
3. Coercion
l
4. Forgery - Correct Answers 4. Forgery
l l ll l llll l
l Failure to pay a penalty assessed by the commissioner may result in...?
l l l l l l l l l l l
1. Revoked or suspended license
l l l l l
2. Require the license to retake the examination
l l l l l l l l
3. Complete 5 extra hours of continuing education
l l l l l l l l
4. Pay a late charge of 1.5% - Correct Answers 1. Revoked or suspended license
l l l l l l l ll l llll l l l l
Two business business partners own life insurance, which or the following allows the
l l l l l l l l l l l l l
l surviving partner to use death benefit to purchase the deceased owners share?
l l l l l l l l l l l
1. Buy-sell agreement
l l l
2. Key employee life insurance
l l l l l
3. Business continuation
l l l
,4. Accidental death - Correct Answers 1. Buy-sell agreement
l l l ll l llll l l
l Policy owner surrenders a policy for its cash value, when is tax liability incurred?
l l l l l l l l l l l l l l
1. The cash value exceeds all premiums paid
l l l l l l l l
2. The cash value is less than premiums paid
l l l l l l l l
3. The policy is exchanged for a policy of equal value
l l l l l l l l l l l
4. The party is transferred to a third party - Correct Answers 1. The cash value exceeds all
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premiums paid
l l
When is insurable interest required?
l l l l l
1. At time of claim
l l l l l
2. At time of application
l l l l l
3. In event of a policy loan
l l l l l l l
4. Within the first year of death - Correct Answers 2. At the time of application
l l l l l l l ll l llll l l l l l
Which of the following best describes a single premium cash policy?
l l l l l l l l l l l l
1. It requires only one payment to make the policy paid up
l l l l l l l l l l l
2. It provides for only one premium to be paid without evidence of insurability
l l l l l l l l l l l l l l
3. It waives one future premium of the owner becomes disabled
l l l l l l l l l l
4. It requires the policy owner to pay one premium annually - Correct Answers 1. It requires
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only one payment to make the policy paid up
l l l l l l l l l
When life insurance is funded by contributions to a qualified retirement...
l l l l l l l l l l l
1. Premiums are taxable
l l l l
2. Death benefits are taxable
l l l l l
3. The insurance must be incidental to the plan
l l l l l l l l
4. Death benefits are paid to the employer - Correct Answers 1. Premiums are taxable
l l l l l l l l ll l llll l l l
l How does a graded premium whole life policy differ from a modified premium?
l l l l l l l l l l l l
,1. It increase the premium annually during the first several years of the policy
l l l l l l l l l l l l l
2. It increase the premium annually for the duration of the policy
l l l l l l l l l l l
3. It increases the premium once during the duration of the policy
l l l l l l l l l l l l
4. It has lower premium for the duration of the policy - Correct Answers 1. It has a lower
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premium for the duration of the policy
l l l l l l l
Which of the following is NOT true about converting a group policy into an individual policy?
l l l l l l l l l l l l l l l l
1. The converted policy must be the same amount as the group coverage
l l l l l l l l l l l l l
2. Group policies must include a guarantee of conversion
l l l l l l l l l
3. Coverage continues during the conversion period
l l l l l l l
4. Proof of insurability must be required - Correct Answers 4. Proof of insurability must be
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required
l
l Before doing business under an assumed name, who must the producer first notify?
l l l l l l l l l l l l
1. Insured
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2. insurer
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3. Commissioner
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4. Insurance agency - Correct Answers 3. Commissioner
l l l ll l llll l
Which writer allows you to purchase additional insurance without underwriting or specific
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l dates?
1. Guaranteed renewability
l l
2. Guaranteed insurability
l l
3. Cost of living
l l l
4. Disability income - Correct Answers 2. Guaranteed insurability
l l l ll l llll l l
Which of the following is a life insurance contract written on the life of an individual?
l l l l l l l l l l l l l l l l
1. Insurance
l l
, 2. Survivorship policy
l l
3. Joint life contract
l l l l
4. Single life insurance - Correct Answers 4. Single life Insurance
l l l l ll l llll l l l
An Insurance policy lapsed due to nonpayment of premium to activate the reinstatement
l l l l l l l l l l l l l
l clause...
1. Play the premium within 15 days of the grace period.
l l l l l l l l l l l
2. Provide the insurer with the evidence of insurability
l l l l l l l l l
3. Apply for a new life insurance policy
l l l l l l l
4. Demonstrate the incontestable clause can be invoked - Correct Answers 2. Provide the
l l l l l l l l ll l llll l l
insurer with the evidence of insurability
l l l l l l
Term life insurance differs from permanent life insurance in that MOST often, term life
l l l l l l l l l l l l l l
l insurance... - Correct Answers Remains in force for a specific period of time l ll l llll l l l l l l l l
Which activity does NOT require an insurance producer's license? - Correct Answers
l l l l l l l l l l ll l lll
l Underwriting
Which nonforfeiture option allows the policy owner to purchase less coverage for life?
l l l l l l l l l l l l l l
1. Reduced paid-up insurance
l l l l
2. Cash surrender value
l l l
3. Settlement value
l l l
4. Extended term - Correct Answers 1. Reduced paid-up insurance
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l If the annuitant dies before the annuity start date, the interest earned is...
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1. Taxable l
2. Nontaxablel
3. Never taxed
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4. Taxed if the beneficiary is a spouse - Correct Answers 1. Taxable
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Which type of annuity guarantees a level benefit payment?
l l l l l l l l l
