Insurance Commission (Reviewer) Flashcards
A life insurance agent is permitted to
a. Approve an application for insurance
b. Waive any of the requirements of the company
c. Guarantee dividends on participating policies
d. Prepare routine proposals for life insurance coverage
d. Prepare routine proposals for life insurance coverage
Claire is considering to purchase either endowment or term life policy. What do these policies have in common?
a. Insurance protection will be limited to a specified period
b. Renewal and conversion privileges are available
c. No cash value is available to the policy owner during the term of the policy
d. A benefit will be paid at the end of the period of coverage if the person is then alive
a. Insurance protection will be limited to a specified period
A client tells you that his bank wants him to use his life insurance policy so that his bank loan will be paid off if he dies. You recommend that he
a. Appoints an irrevocable beneficiary
b. Makes an absolute assignment
c. Makes a collateral assignment
d. None of the above
c. Makes a collateral assignment
If premiums are being waived under a waiver of premium benefit and the insured dies, the proceeds will be the
a. Reduced paid-up face amount
b. Face amount less unpaid premiums
c. Cash surrender value
d. Face amount
d. Face amount
A living benefit in an insurance policy is
a. The guaranteed insurability benefit
b. The right to change beneficiaries
c. The waiver of premium for disability
d. The cash surrender value
d. The cash surrender value
Insurable interest is necessary when a person insures another
a. So that the person being insured may be properly appraised
b. To establish that there is a genuine risk
c. Because interest on premiums must be earned
d. To make sure that he will pay the premiums
b. To establish that there is a genuine risk
Your client George wants to apply for a life insurance policy, as his advisor, you would advise him to do all of the following. Which one will you NOT advise him to do?
a. To furnish initial information as to insurability
b. To give details pertaining to non-forfeiture options
c. To convey to the company the desire of the applicant to obtain insurance
d. To furnish information on which the contract of life insurance may be written
c. To convey to the company the desire of the applicant to obtain insurance
A limited pay life policy provides:
a. Protection for the life of the policyholder with premiums payable for a limited term of years.
b. Low cost protection only for a limited term of years with no savings
c. The highest level of savings for the insured within a specified term of years.
d. Protection with premiums payable for life and a low level of savings as an alternative to continued protection in old age
a. Protection for the life of the policyholder with premiums payable for a limited term of years.
When you bought an insurance policy on your wife’s life, you were 27 and she was 26, but you stated that you were 26 and she was 27. Five years later, your wife died. The insurer will pay.
a. The face amount adjusted for misstatement of age
b. Slightly less than the face amount
c. The sum of the premium paid
d. The face amount
a. The face amount adjusted for misstatement of age
Group life insurance covers
a. Death provided it is during working hours and in the place of employment.
b. Death of the employee regardless of cause except suicide during the first year (sometimes two years)
c. Accidental death only
d. Only death by heart attack, pneumonia or cancer
b. Death of the employee regardless of cause except suicide during the first year (sometimes two years)
Your client tells you that when his father died, received P500, 000 free of Estate Tax and that he had not even known that this policy existed. Which of the following classifications did your client fall under
a. Collateral assignee
b. Absolute assignee
c. Revocable primary beneficiary
d. Irrevocable primary beneficiary
d. Irrevocable primary beneficiary
Mr. Sy walked out of his house one night and was never heard of again. His wife wanted to make a claim on his life insurance policy as she believes that he is dead. Which of the following statements is correct in this case?
a. It would be four years before the court could declare him legally dead.
b. It would be seven years before the court could declare him legally dead.
c. The company would pay immediately
d. It would require 6 months before the court could declare him dead
b. It would be seven years before the court could declare him legally dead.
In life insurance, the term “substandard rates” generally is used to refer to
a. Premiums charged for policies with low amounts
b. Premiums charged to persons who are considered to be higher-than-average risk categories
c. Mortality rates that are lower than the rates suggested by the regulatory authorities
d. Mortality rates that are lower than those expected by the company according to its mortality table
b. Premiums charged to persons who are considered to be higher-than-average risk categories
The fundamental advantage of the use of life insurance as a means of meeting economic losses is that through life insurance these losses are
a. Reduced for the group as a whole through the multiplier effect
b. Deferred for a specified period of time
c. Met as they rise through savings accumulated on an assessment basis
d. Spread over a large number of people
d. Spread over a large number of people
