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MICHIGAN LIFE INSURANCE STATE EXAM
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MICHIGAN LIFE INSURANCE STATE EXAM
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MICHIGAN LIFE INSURANCE STATE EXAMUnder 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Only if withdrawn prior to age 59 1/2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 - Answers-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Earnings are not taxable when withdrawn
Earnings are taxable when withdrawn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 - Answers-Earnings are taxable when
withdrawn
Which of the following actions is REQUIRED by a producer who is replacing an existing
life insurance policy?
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 - Answers-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 - Answers-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
premiums be commingled - Answers-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 - Answers-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 - Answers-association or labor group
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 - Answers-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 - Answers-Contain offer and acceptance
Which of the following is NOT a federal requirement of a qualified plan?
Must benefit a broad cross-section of employees
Employee must be able to make unlimited contributions
Vesting schedule must be defined
Employer establishes the plan - Answers-Employee must be able to make unlimited
contributions
The acceptance of a credit life application requires the submission of a certificate of
insurance to the insured within __ days.
10
20
30
40 - Answers-30
What does the Group Life underwriting risk selection process help protect insurance
companies from?
Risk aversion
Natural selection
Adverse selection
Risk Management - Answers-Adverse Selection
A guaranteed issue insurance policy has no
initial premium requirement
incontestable period
, waiting period
medical underwriting - Answers-Medical Underwriting
A Universal Life policyowner must receive a notice of cash surrender value at LEAST
every
6 months
year
2 years
5 years - Answers-year
A Roth IRA owner must be at least what age in order to make tax free withdrawals?
59 1/2 and owned account for a minimum of 10 years
59 1/2 and owned account minimum of 5 years
70 1/2 and owned account for a minimum of 10 years
70 1/2 and owned account for a minimum of 5 years - Answers-59 1/2 and owned the
account for 5 years
In Michigan, legal action may be taken against an insurer for up to ___ Years for failing
to pay a life insurance claim after proof of loss was submitted
4
5
6
7 - Answers-6
Level premium permanent insurance accumulates a reserve that will eventually
equal the face amount of the policy
pay a dividend to the policyowner
require the policyowner to make periodic withdrawals
become larger than the face amount - Answers-equal the face amount of the policy
Under a life insurance policy, what does the insuring clause state?
The agents obligation to provide the proper amount of coverage
The insurers obligation to return all premiums upon an approved death claim
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