Page 1 of 61
MICHIGAN LIFE INSURANCE STATE EXAM/ LIFE
INSUAREANCE STATE EXAM FOR MICHIGAN
RECENT AND COMPLETE VERSION ALL
QUESTIONS AND CORRECT ANSWERS/ GRADED
A+
Under a traditional IRA, interest is taxed:
Only if withdrawn prior to age 59 1/2
According to the capital gains rate
Upon distribution
During the accumulation phase - ANSWER: Upon distribution
Which of these statements concerning Traditional IRAs is CORRECT?
Earnings are not taxable when withdrawn
Earnings are taxable when withdrawn
Contribution are never tax deductible
Contributions are always made by the employer - ANSWER: Earnings are taxable
when withdrawn
,Page 2 of 61
Which of these describes the result of a modified endowment contract that failed to
meet the seven- pay test?
Policy loans are disallowed
The premium payments will be tax deductible
Pre- death distributions are typically taxable
Withdrawals will be prohibited - ANSWER: Pre- death distributions are typically
taxable
In order for a contract to be valid, it must
be filled with the state
be signing and witnessed by an attorney
be in writing
contain offer and acceptance - ANSWER: Contain offer and acceptance
Which of the following actions is REQUIRED by a producer who is replacing an
existing life insurance policy?
,Page 3 of 61
Keep replacement records on file for at least 10 years
Notify the existing insurer of the proposed replacement
Submit to the replacing insurer a list of the policies to be replaced
Offer the insured a 60- day free- look period - ANSWER: Submit to the replacing
insurer a list of the policies to be replaced
Who were Keogh plans designed to provide pension benefits for?
Corporate officers
Public school employees
The self-employed
Government employees - ANSWER: The self emplyed
A producer's fiduciary duty requires that
premiums are maintained in a personal bank account until remittance to insurer
premiums be deposited in an interest bearing account
premiums are forwarded to the insurer on a timely basis
, Page 4 of 61
premiums be commingled - ANSWER: Premiums are forwarded on a timely basis
An individual who removes the risk of losing money in the stock market by never
purchasing stocks is said to be engaging in
Risk reduction
Risk Transference
Risk avoidance
Risk retention - ANSWER: Risk avoidance
A type of group that has a constitution and has been organized for purposes other
than obtaining insurance is called a(n)
employer group
employee group
association or labor group
multiple coalition - ANSWER: association or labor group
Which of the following is NOT a federal requirement of a qualified plan?
MICHIGAN LIFE INSURANCE STATE EXAM/ LIFE
INSUAREANCE STATE EXAM FOR MICHIGAN
RECENT AND COMPLETE VERSION ALL
QUESTIONS AND CORRECT ANSWERS/ GRADED
A+
Under a traditional IRA, interest is taxed:
Only if withdrawn prior to age 59 1/2
According to the capital gains rate
Upon distribution
During the accumulation phase - ANSWER: Upon distribution
Which of these statements concerning Traditional IRAs is CORRECT?
Earnings are not taxable when withdrawn
Earnings are taxable when withdrawn
Contribution are never tax deductible
Contributions are always made by the employer - ANSWER: Earnings are taxable
when withdrawn
,Page 2 of 61
Which of these describes the result of a modified endowment contract that failed to
meet the seven- pay test?
Policy loans are disallowed
The premium payments will be tax deductible
Pre- death distributions are typically taxable
Withdrawals will be prohibited - ANSWER: Pre- death distributions are typically
taxable
In order for a contract to be valid, it must
be filled with the state
be signing and witnessed by an attorney
be in writing
contain offer and acceptance - ANSWER: Contain offer and acceptance
Which of the following actions is REQUIRED by a producer who is replacing an
existing life insurance policy?
,Page 3 of 61
Keep replacement records on file for at least 10 years
Notify the existing insurer of the proposed replacement
Submit to the replacing insurer a list of the policies to be replaced
Offer the insured a 60- day free- look period - ANSWER: Submit to the replacing
insurer a list of the policies to be replaced
Who were Keogh plans designed to provide pension benefits for?
Corporate officers
Public school employees
The self-employed
Government employees - ANSWER: The self emplyed
A producer's fiduciary duty requires that
premiums are maintained in a personal bank account until remittance to insurer
premiums be deposited in an interest bearing account
premiums are forwarded to the insurer on a timely basis
, Page 4 of 61
premiums be commingled - ANSWER: Premiums are forwarded on a timely basis
An individual who removes the risk of losing money in the stock market by never
purchasing stocks is said to be engaging in
Risk reduction
Risk Transference
Risk avoidance
Risk retention - ANSWER: Risk avoidance
A type of group that has a constitution and has been organized for purposes other
than obtaining insurance is called a(n)
employer group
employee group
association or labor group
multiple coalition - ANSWER: association or labor group
Which of the following is NOT a federal requirement of a qualified plan?
