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Final Study Set - Michigan Life Producer Exam Questions and Answers
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Final Study Set - Michigan Life Producer Exam Questions and Answers
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Final Study Set - Michigan Life ProducerExam Questions and Answers
Estate Creation - Answer -Proceeds are paid to provide financial assets to create an
immediate estate the insured can pass on to survivors.
Estate Conservation - Answer -provides money to pay any estate taxes or loans which
must be satisfied upon the death of the estate owner preserving the insured's estate
Buy-Sell Agreement - Answer -Is a contract in the event an owner dies that ensures a
business is sold to surviving owners.
Human Life Approach - Answer -Looks at the amount of earning years left for an
insured taking the average the insured would make over those years.
Need Approach - Answer -Looks at the financial expenses of an insured excluding any
short term debt over a set number of years.
Permanent Insurance - Answer -Is a policy designed to cover you for the rest of your life
and develops cash value. (It is like buying a house, you agree to make payments
typically over a set period of time and if you sell it early you retain what ever equity you
earned)
Mortality Table - Answer -is a table showing the probability of death at specified ages.
Aleatory Contract - Answer -is a contract where one party potentially gains an economic
advantage over the other.
Conditional Agreement Reciept - Answer -states that coverage begins on a date of
application or date of medical exam (if one is required) whichever date is later.
30 Day Interim Agreement - Answer -is an agreement that provides an applicant up to
30 days of coverage as applied for or until they make a counter offer, even if insured
declines to issue policy.
, Full Medical Exam - Answer -Occurs for applicants requesting higher coverage, if the
application raised additional questions, or if the applicant is beyond a certain age an
exam investigates all aspects of the applicant's health, which the insurer must pay for.
Unilateral Contract - Answer -Describes the enforcement of the policy, one side makes
a promise and compelled to perform certain duties.
Consideration - Answer -is the exchange of value. Insured gives a promise to pay
claims and the insured gives an application and money.
Interim Agreements - Answer -are used in the interest of speeding up the application
process. The insurance company may send an interim agreement to provide an
application and premium to the insured.
Producer Statement - Answer -is a statement given at the time of an application that
says the insured was of good health at the time of application and not coerced or
intoxicated.
Estoppel - Answer -for insurance means that failure to obtain an answer for a specific
question on an application or the applicant doesn't answer the question and the
insurance company issues a policy, company would be estopped from voiding a
contract. The insurance company had their opportunity to get answers at time of
application.
Warranties - Answer -are statements made on an application that must be absolutely
true or else the contract could be voided.
Acceptance has Two Parts - Answer -Insurance company is said to have accepted an
offer once they have done two things; issued a policy and delivered the policy.
Attending Physician's Statement (APS) - Answer -A statement usually obtained from the
applicant's doctor describing any ongoing medical conditions when acceptance of
insured is in doubt.
Mortality Tables for Annuities Are Used To: - Answer -determine how much money an
insured will receive monthly.
Income Phase / Annuity Period - Answer -This is the phase where the funds in an
annuity are distributed, like putting a faucet on a tank and letting it empty out. Once is
starts nothing can be changed.
Fixed Annuity - Answer -An annuity that will have both a guaranteed and current rate of
interest.
Equity Indexed Annuity - Answer -Will earn a guaranteed and current interest rate that is
tied to equity index such as the S&P 500
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