MICHIGAN LIFE AND HEALTH INSURANCE
PRACTICE EXAM QUESTIONS AND CORRECT
ANSWERS (VERIFIED ANSWERS) PLUS
RATIONALES 2025
1. What is the primary purpose of life insurance?
• To provide investment income
• To pay for medical expenses
• To provide financial protection for survivors
• To accumulate retirement savings
Life insurance provides a death benefit to beneficiaries to protect them
financially after the insured's death.
2. Which of the following policies allows for partial withdrawals without
surrendering the policy?
• Term Life
• Whole Life
• Universal Life
,• Variable Life
Universal life policies offer flexible premiums and allow for partial
withdrawals or loans against the policy’s cash value.
3. In Michigan, how long is the free-look period for life insurance?
• 30 days
• 7 days
• 10 days
• 5 days
The free-look period in Michigan is 10 days, allowing the policyholder to
review and cancel the policy for a full refund.
4. What type of health insurance policy covers hospital, surgical, and physician
expenses?
• Disability income
• Accidental death
• Major medical
• Long-term care
Major medical insurance provides broad coverage for hospital, physician,
and surgical expenses.
5. What is the purpose of an incontestability clause in a life insurance policy?
• To allow the insurer to contest claims at any time
• To protect the beneficiary’s identity
• To prevent the insurer from voiding the policy after a period
, • To contest policyholder's age
After a specified period (usually 2 years), the insurer cannot void the
policy for misstatements except for fraud.
6. Which of the following would NOT be considered a violation of Michigan’s
Unfair Trade Practices Act?
• Misrepresentation
• Twisting
• Rebating
• Replacing a policy with better coverage and full disclosure
Policy replacement with full disclosure and client benefit is not unfair.
Twisting and misrepresentation are.
7. What is the term for the dollar amount the insured must pay before the
insurer pays benefits?
• Premium
• Coinsurance
• Deductible
• Copayment
A deductible is the amount the policyholder pays out of pocket before
insurance covers the remaining expenses.
8. Which rider allows additional insurance to be purchased without evidence
of insurability?
• Accelerated benefit
PRACTICE EXAM QUESTIONS AND CORRECT
ANSWERS (VERIFIED ANSWERS) PLUS
RATIONALES 2025
1. What is the primary purpose of life insurance?
• To provide investment income
• To pay for medical expenses
• To provide financial protection for survivors
• To accumulate retirement savings
Life insurance provides a death benefit to beneficiaries to protect them
financially after the insured's death.
2. Which of the following policies allows for partial withdrawals without
surrendering the policy?
• Term Life
• Whole Life
• Universal Life
,• Variable Life
Universal life policies offer flexible premiums and allow for partial
withdrawals or loans against the policy’s cash value.
3. In Michigan, how long is the free-look period for life insurance?
• 30 days
• 7 days
• 10 days
• 5 days
The free-look period in Michigan is 10 days, allowing the policyholder to
review and cancel the policy for a full refund.
4. What type of health insurance policy covers hospital, surgical, and physician
expenses?
• Disability income
• Accidental death
• Major medical
• Long-term care
Major medical insurance provides broad coverage for hospital, physician,
and surgical expenses.
5. What is the purpose of an incontestability clause in a life insurance policy?
• To allow the insurer to contest claims at any time
• To protect the beneficiary’s identity
• To prevent the insurer from voiding the policy after a period
, • To contest policyholder's age
After a specified period (usually 2 years), the insurer cannot void the
policy for misstatements except for fraud.
6. Which of the following would NOT be considered a violation of Michigan’s
Unfair Trade Practices Act?
• Misrepresentation
• Twisting
• Rebating
• Replacing a policy with better coverage and full disclosure
Policy replacement with full disclosure and client benefit is not unfair.
Twisting and misrepresentation are.
7. What is the term for the dollar amount the insured must pay before the
insurer pays benefits?
• Premium
• Coinsurance
• Deductible
• Copayment
A deductible is the amount the policyholder pays out of pocket before
insurance covers the remaining expenses.
8. Which rider allows additional insurance to be purchased without evidence
of insurability?
• Accelerated benefit
