M9 Mock Paper 1 Flashcards
The jurisdiction of the financial industry disputes resolution center in adjudicating dispute between insureds and insurance companies is up to:
$100000,
That means any issues can will be settled up to only 100000
Who determines premium rates of life insurance policies?
Underwriters
Riders are known as…
Supplementary benefits
This is NOT one of the common exclusion in a critical illness rider
Injury sustained while traveling in public transport
Statement “the fund will invest in investment grade government and corporate securities and is expected to outperform cash deposits in the medium term” is a typical example of?
Bond funds.
Key word is “securities”
What investment linked sub funds contains a pre set mix of sub funds?
Managed portfolios
Key word: preset mixed of sub funds
Under what type of annuity? Does the benefit payment not stop until the annuitant dies?
Life annuity.
Key is no time limit except death
What kind of annuity is hedged against inflation?
Increasing rate annuity
All mistakes made in the proposal form must be:
Countersigned by client
What document insurer request from claimant to ensure they are the proper claimants as defined in the insurance act: cap 142
Statutory declaration
What kind of gains is exempted from Income tax in Sg?
Capital gains.
Family history helps the insurer to assess.
Medical risk
What are capital gains
Profits from sale of property or investments
An agency created based on mutual conduct of parties suggest certain intention. This is a / an
Implied agency.
Key word: agents of jurisdiction to make legally binding contracts on behalf of co.
Guaranteed insurability option rider makes the person to be able to purchase additional insurance coverage
At a specific time without proof of insurability
An insurance intermediary is someone who can be the agent of
Both the insurer and insured
What type of fund is typically
Closed end fund
Fixed maturity date
Capital guaranteed fund
Independent assessment of financial capacity or creditworthiness of life insurers is provided by:
Independent financial advisors
To cover the risk of outliving ones financial resources , one should buy
Annuity product
To make medisave contributions, a self employed’ yearly net income is
6000 which is 500 per month
Insurers are allowed to keep their internal governing policies to themselves as
It is too technical for lay person to understand.
So a lay person has the right to know if he understands.
Unit trust or similar investments + some insurance protection
Investment linked life insurance policy
With regard to annual bonus allocation
The same bonuses may be allocated for a good year and a bad year performance
Investment linked funds which ploughs back investment income into the funds have a…
Accumulation structure
Loading on insurance policies is to cover
Insurers business expenses and profit margins
Insurer may increase the insurance coverage charges under an investment linked life insurance policy when….
There has been a general and sustained worsening of claims experience.
Like car insurance: charges more when there are accidents
When making Claims under accidental death and dismemberment benefit rider, the document needed is…
The accompanying physicians statement.
A witness to a trust Nomination form must be at least
21 years old and that’s all. Besides mental capacity, no other requirements required.
A mirror fund is one that tries to
Duplicate the composition of an existing fund
A managed fund is also known as the
Balanced fund
One feature of Pure life annuity is…
It provides a guaranteed income
In making a death claim, the attending physicians statement is usually paid for by the
Claimant
Survival period of a Critical illness insurance rider is a specific period of time from date of…
Occurrence of critical illness
Information about the employment status and position held enables the insurer to check…
If the amount of insurance proposed is justifiable
Life insurance asked for exact nature of job duties because
It allows insurer to access the risk of the job
What rights agents have in respect of their relationship with principle under common law?
Remuneration and indemnity
Mean agents are paid for their work and do not need to have responsibility for the products of the co.
Technique used to protect policy owner from risk of severe price decline of any one stock is
Diversification
Compulsory document to give to proposer during sales process?
Benefit illustration
Under risk based capital (rbc) framework, reserving for future bonuses is required for
Both annual and terminal bonus.
Co has to put aside all these monies
What should be considered for the promise by the policy owner to forgo all rights under an insurance policy
The surrender value
What policies likely lead to premium increasing at each subsequent renewal date?
Yearly renewable premium policies.
Like car insurance.
Insurance is an agreement for that amount of time. Hedging against any increase.
For a risk to be insurable, the loss must not be …
Catastrophic to the insurer
Interim bonuses are paid on participating policies on.
Premature termination of policy during the year before bonus allocation
When was the nomination of beneficiaries framework introduced?
2009
Nomination of beneficiaries framework was introduced to
Provide financial protection to named beneficiaries
When maturity claim is paid, a discharge voucher is:
Required by some insurers, but not all
A person under 21 may make a will if
he is a mariner at sea.
The individual income tax payable is based on the individual
chargeable income
An insurer will reinstate a life insurance policy which has lapsed only of it relieves evidence of the
Insurability of the life insured
What way of assigning a policy is typically used for a bank loan?
Assignment for valuable consideration
If policy proceeds are not covered by a will, the claimant will have to apply to the court for
A letter of administration
Under an investment linked life policy that has surrender charges, surrender charges are usually at:
% of cash value that decrease from the first year onwards
Under the terms of the waiver of premium upon total and permanent disability (TPD) Rider, the waiting period is
6months
Who must disclose all facts material to the contract and represent them truthfully?
Both the proposer and the insurer
The initial sales charge is another term for
Bid Offer spread
In assessing a key- person insurance risk, an underwriter needs to review the proposing company’s financial statement to establish the appropriateness of the
sum assured
Sum assured under a Group term life insurance policy is usually determined by the _______________of the employee
Seniority
Annuity income benefit of the Fixed Period Temporary annuity will continue until the expiry of the fixed period provided the annuitant is dead or alive?
Dead
“First to die” and “Last Survivor” are 2 types of
Joint Life Policies
Which rider will increase the benefit payable on death?
Term Rider
When an insurer grants an agent to canvass for new business, this type of authority is called__________
Actual
Terminal Bonus is usually
paid on a participating policy when a death claim occurs
Trust Nomination is allowed for
Personal accident with death benefit policies
If there is a breach found by the insurer by the insured, can the financial adviser be sued for compensation?
No
What are 3 things applies to Mortgage Decreasing Term Insurance?
- Can be purchased on a joint life basis
- The premium ceases a few years before expiry of the policy
- The coverage reduces considerably towards the end of the policy term.
In the proposal form, the section on particulars of the proposer does not need to be completed if
he is buying insurance on his own life.
Which document is not given to prospective clients before they purchase an investment linked policy?
Profile statement.
First Premium Payment is not given what kind of receipt?
Official Receipt
______________ is not a common method of bonus distribution
Group Bonus
An agent will not lose his right to be indemnified by his principle is
the act which he claims indemnity is legal.
What is not usually required for issuance of a duplicate policy?
Deed poll.
What does not apply to the policy owner when he revokes a trust nomination?
Amending an existing will.
What is not a common restriction on convertible options?
Conversion allowed only if evidence of insurability is provided.
Eg: My policy is converted to me without assessing my insurability.
A policy Owner is having difficulty making premium payment. what options does he have?
apply for a policy loan
change the premium payment mode
convert the policy into a paid up policy.
Now that a life policy has cash value, what are some of the options of the owner?
Take a loan on the policy
use the cash value to pay premiums
convert the policy to paid policy.
Now that a life policy has cash value, what can the owner not do?
buy additional sum assured with the cash value
when is a AIDS risk not assessed by the insurer
when the marital status indicates a higher risk.
My own reason: usually sex life of the partner is not accessed by the insurer.
They look only at the individual.
What are some of the benefits of investing through an investment linked life insurance policy?
Access to professional investment management
Access to financial market with modest capital
Flexibility in varying insurance protection and premium payment.
what can investment linked policy NOT provide
stable returns
Convertible options are not offered with which policy?
whole life
common ways to pay for premium?
cash
giro
cheque
who can be executor of the will
testator
beneficiary
solicitor who draws up the will
what are the mechanics of endowment insurance policy?
pay for 20 years 100k
covered for 20years 100k
takes back 100k if the survives 20years
Amy buys emdownment for 5yr old that matures at 21yrs
Rider on policy pays son income of 500/month if she dies until 21years old. this rider is….
Family income Benefit rider
what is MOST suitable for a co to buy for its key person insurance?
Level term insurance policy
A clamiant certified disabled and unable to work again in his own profession or similar but there are some he can work in. Can Recieve TPD benefit?
depends on the definitions used
To exercise the convertible option on a term insurance policy is to change the policy into
a permanent one for the same sum assured
what can result in the lowest tax payable by taxpayer?
parenthood tax rebate of 5000
With guaranteed returns and less non guaranteed bonuses, it means the policy is more conservative with its investment?
yes
Lowest first year premium for the same sum assured in respect for a 30 year old male?
20 year term assurance
will receive any benefit If die during grace period of not paying the latest premium?
Not at all.
If policy owner returns ILP using the free look period provision? with no medical fee incured during underwriting the policy, insurer will
return premium paid.
adjust to reflect changes in unit price.
