MI LIFE PRODUCER COMPREHENSIVE EXAM 2025/2026
QUESTIONS AND SOLUTIONS MARKED A+
✔✔All of the following are true regarding rebates EXCEPT
a)Dividends are not considered to be rebates.
b)Rebates are allowed if it's in the best interest of the client.
c)Rebates are only allowed if specifically stated in the policy.
d)Rebating can be anything of economic value, given as an inducement to buy. - ✔✔b)
Rebates are allowed if it's in the best interest of the client.
A rebate is an illegal act which involves returning something of value to the client as an
inducement to buy, such as the commission. Rebates are only allowed if specifically
stated in the policy. Insurance dividends are not considered rebates as the IRS
considers it as a return of overpaid premium.
✔✔Annuities can be used to fund which of the following?
a)Estate creation
b)Retirement plans
c)Variable life insurance
d)Group life insurance - ✔✔b) Retirement plans
Since annuities are a popular means to provide retirement income, they are often used
to fund qualified retirement plans.
✔✔Which of the following best describes annually renewable term insurance?
a)Neither the premium nor the death benefit is affected by the insured's age.
b)It provides an annually increasing death benefit.
c)It is level term insurance.
d)It requires proof of insurability at each renewal. - ✔✔c)It is level term insurance.
Annually renewable term is a form of level term insurance that offers the most insurance
at the lowest cost.
✔✔Which rule would apply if an agent knows an applicant is going to cash in an old
policy and use the funds to purchase new insurance?
a)Reinstatement rule
b)Conversion rule
c)Disclosure rule
d)Replacement rule - ✔✔d) Replacement rule
, Anytime a new policy is issued that replaces or modifies existing insurance, a
replacement form must be submitted to the ceding company.
✔✔What does "liquidity" refer to in a life insurance policy?
a)The insured receives payments each month in retirement.
b)Cash values can be borrowed at any time.
c)The death benefit replaces the assets that would have accumulated if the insured had
not died.
d)The policyowner receives dividend checks each year. - ✔✔b) Cash values can be
borrowed at any time.
Liquidity in life insurance refers to availability of cash to the insured through cash
values.
✔✔Life insurance death proceeds are
a)Taxable to the extent that they exceed 7.5% of the beneficiary's adjusted gross
income.
b)Taxed as a capital gain.
c)Taxed as ordinary income.
d)Generally not taxed as income. - ✔✔d)Generally not taxed as income.
Life insurance death benefits are generally not taxed as income.
✔✔Annuities can be used to fund which of the following?
A) estate creation
B) Retirement plans
C) Variable Life Variable
D) Group Life Insurance - ✔✔b) retirement plans
✔✔A policy owner who is also the insured wants to name her husband as the
beneficiary of her life policy. She also wishes to retain all of the rights of ownership. The
policy owner should have her husband named as the - ✔✔revocable beneficiary
✔✔Most agents try to collect the initial premium for submission with application. When
an agent collects the initial premium from the a
applicant, the agent should issue the applicant - ✔✔premium receipt
✔✔Which of the following provisions would not be allowed as a part of a life insurance
policy issued in Michigan? - ✔✔A provision that allows the effective date of the policy to
be backdated up to 8 months in order to effect a lower premium rate for the insured.
QUESTIONS AND SOLUTIONS MARKED A+
✔✔All of the following are true regarding rebates EXCEPT
a)Dividends are not considered to be rebates.
b)Rebates are allowed if it's in the best interest of the client.
c)Rebates are only allowed if specifically stated in the policy.
d)Rebating can be anything of economic value, given as an inducement to buy. - ✔✔b)
Rebates are allowed if it's in the best interest of the client.
A rebate is an illegal act which involves returning something of value to the client as an
inducement to buy, such as the commission. Rebates are only allowed if specifically
stated in the policy. Insurance dividends are not considered rebates as the IRS
considers it as a return of overpaid premium.
✔✔Annuities can be used to fund which of the following?
a)Estate creation
b)Retirement plans
c)Variable life insurance
d)Group life insurance - ✔✔b) Retirement plans
Since annuities are a popular means to provide retirement income, they are often used
to fund qualified retirement plans.
✔✔Which of the following best describes annually renewable term insurance?
a)Neither the premium nor the death benefit is affected by the insured's age.
b)It provides an annually increasing death benefit.
c)It is level term insurance.
d)It requires proof of insurability at each renewal. - ✔✔c)It is level term insurance.
Annually renewable term is a form of level term insurance that offers the most insurance
at the lowest cost.
✔✔Which rule would apply if an agent knows an applicant is going to cash in an old
policy and use the funds to purchase new insurance?
a)Reinstatement rule
b)Conversion rule
c)Disclosure rule
d)Replacement rule - ✔✔d) Replacement rule
, Anytime a new policy is issued that replaces or modifies existing insurance, a
replacement form must be submitted to the ceding company.
✔✔What does "liquidity" refer to in a life insurance policy?
a)The insured receives payments each month in retirement.
b)Cash values can be borrowed at any time.
c)The death benefit replaces the assets that would have accumulated if the insured had
not died.
d)The policyowner receives dividend checks each year. - ✔✔b) Cash values can be
borrowed at any time.
Liquidity in life insurance refers to availability of cash to the insured through cash
values.
✔✔Life insurance death proceeds are
a)Taxable to the extent that they exceed 7.5% of the beneficiary's adjusted gross
income.
b)Taxed as a capital gain.
c)Taxed as ordinary income.
d)Generally not taxed as income. - ✔✔d)Generally not taxed as income.
Life insurance death benefits are generally not taxed as income.
✔✔Annuities can be used to fund which of the following?
A) estate creation
B) Retirement plans
C) Variable Life Variable
D) Group Life Insurance - ✔✔b) retirement plans
✔✔A policy owner who is also the insured wants to name her husband as the
beneficiary of her life policy. She also wishes to retain all of the rights of ownership. The
policy owner should have her husband named as the - ✔✔revocable beneficiary
✔✔Most agents try to collect the initial premium for submission with application. When
an agent collects the initial premium from the a
applicant, the agent should issue the applicant - ✔✔premium receipt
✔✔Which of the following provisions would not be allowed as a part of a life insurance
policy issued in Michigan? - ✔✔A provision that allows the effective date of the policy to
be backdated up to 8 months in order to effect a lower premium rate for the insured.
