MOCK TEST (TRAD 1) Flashcards
Increase the present loan by the interest
If the interest on a policy loan is not paid at the policy anniversary, the insurance company may
Increase the present loan by the interest
The extent of the medical evidence required is determined by
The age of the applicant and the proposed sum to be insured
Indicate which of the following is not a function of an application for life insurance policy
To convey to the company the desire of the applicant to obtain insurance.
The insurance companies make use of the laws of probability in order to
Estimate future death rates among members of a given group
Insurance premiums is NOT
Cash is required for all premiums paid in the grace period
insurance premiums are
A premium is the legal consideration needed to effectuate a life insurance policy.
The grace period is usually 31 days.
Premiums which are paid quarterly or semi-annually are higher than those paid annually.
Endowment life insurance and term life insurance are similar in that both plans
Provide life insurance protection for only the period of time specified in the policy contract
A non-forfeiture option would ordinarily be selected at the time a policy owner
Discontinues premium payments for a whole life or endowment policy
The conservation of a life insurance policy is dependent are
The level of first year commission
Agent’s service oriented attitude
The use of effective needs selling
The conservation of a life insurance policy is dependent are NOT
Pressure selling
Purchasing a continuous-premium, whole life policy rather than a limited-payment whole life policy, gives the policy owner the advantage of
More insurance protection for the same annual premiums outlay
Name the provision in a permanent life insurance policy under which premiums are discontinued, full insurance will be maintained for a specified period:
Extended term insurance
The basic coverage provided by life insurance policies may be supplemented by separate provisions that provide coverages for additional amounts or of a different nature. Collectively these provisions are known as
Riders
The insured named a primary and secondary revocable beneficiary for P20,000 policy. The insured can ______________ __?
add a third beneficiary at any time
In a policy where an irrevocable beneficiary has been designated the insured, without the beneficiary’s permission, can_____________________.
Discontinue premium payments
An agent who determines a prospect’s complete financial requirements preparatory to offering him a policy using the correct approach known as
Total needs selling
TRUE OR FALSE?
Because of its very short duration the cash value of a yearly renewable term policy grows very fast
FALSE
TRUE OR FALSE?
The cash value of a whole life policy builds up at a slower rate than for a 20 year endowment
TRUE
TRUE OR FALSE?
The cash value in a permanent policy is guaranteed by the company
TRUE
TRUE OR FALSE?
The cash value of an endowment builds up faster than that for a limited pay life policy of the same duration
TRUE
Which of the following does not have a legitimate insurable interest?
a. An individual on the life of his mistress
b. An individual on his own life
c. An individual on the life of his spouse
d. A finance company on the life of its borrower
a. An individual on the life of his mistress
An _____________does not have a legitimate insurable interest
individual on the life of his mistress
Which of the following is the least important reason for requiring that insurance agents be licensed?
a. To establish and maintain high professional and ethical standard
b. To protect the public
c. To give the government adequate control over the conduct of agents
d. To provide additional income to the government through license fees
d. To provide additional income to the government through license fees
What is the least important reason for requiring that insurance agents be licensed?
To provide additional income to the government through license fees
A yearly renewable term life insurance policy generally specifies that____
Premiums shall increase every time the policy is renewed
A yearly renewable term life insurance policy generally specifies that
a. The policy owner may renew the policy only once
b. Premiums shall increase every time the policy is renewed
c. Evidence of insurability shall be required every renewal
d. Cash values will increase for as long as the policy is in force
b. Premiums shall increase every time the policy is renewed
If the interest on a policy loan is not paid at the policy anniversary the insurance company may
Increase the present loan by the interest
The incontestability clause
. Prevents the company from denying a claim after the policy has been in force for 2 years
Non-forfeiture provisions are included in whole life and endowment policies to assure the policy owner that certain minimum policy benefits shall remain with him even under certain changed conditions. Non-forfeiture values guarantee to the policy owner that_____.
Any quaranteed policy values will belong to the policy owner even if premium payments are discontinued
In the case of renewable term insurance, the policy owner may
Renew the coverage based on a higher premium
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
The face amount adjusted for misstatement of age
Both endowment and term life insurance policies provide that____?
Insurance protection will be limited to a specified period
All of the following are sources of information to an insurance company pertaining to the insurability of an applicant except
Government tax records
An insurance company generally has the right to rescind a life insurance policy if
Company discovers at any time that the policy owner was actually a minor at the time of application
In most life insurance applications, the largest amount of information requested is data which
Relates to the insurability of the applicant
In the event that a policy owner elects the paid-up insurance option
The premiums cease and protection continues with a reduced amount of coverage
A father has his present life insurance payable to his estate and because he has now retired, he wants to pass the policy on to his son who will assume the premium payments. Which of the following will he have to appoint his son to achieve his desire and protect the son from Estate Tax Liability?
Absolute assignee
What are the basic settlement options?
Filed amount, fixed period, life income, interest on deposit
Notwithstanding possible legal impediments, if the owner of an endowment at age 65 policy tells you that at the maturity of the policy he wants to provide his church with a monthly donation for as long as the church exists. Which option do you recommend?
Interest option
A policy which permits the policy holder to vary the level of premium or the sum insured, and has its cash values dependent upon the investment performance and the level of premium paid is known as___________________
policy.
Universal life
Disability Waiver of Premium Rider are NOT
The insured has to die while disabled
If the applicant for life insurance fails to disclose or misrepresents a material fact, the contract is___________.
Valid unless the insurer can prove fraud
A man applied for a P20,000 whole life policy and paid the full initial premium to the soliciting agent. The agent issued a binding receipt. Under such a receipt, the insurance company ____________.
Immediately provides interim insurance that remains in effect until the policy is issued or the application is declined
Paid-up additions:
Affect both cash and loan values of the policy
The company will allow a policy change from a higher premium to a lower premium provided the insured
Presents satisfactory evidence of insurability
The settlement options provisions may provide ________. (3 ANSWERS)
Payment of the proceeds for a fixed period
Payment of the proceeds in fixed amounts until exhausted
Proceeds held by the company, with interest payable to the beneficiary upon request
The total life coverage of a permanent basic policy can be greatly increased through the use of
An interim term rider
In certain situations a company may file interpleader actions with a Court of Law. This remedy is used to
Decide conflicting claims on the same insurance proceeds
The settlement options provisions WILL NOT provide ________. (1 ANSWER)
Payment of the proceeds for the life of the insured
TRUE OR FALSE?
An endowment at age 65 policy with premium payable for a limited period of 20 years pays the full amount after 20 years.
FALSE
TRUE OR FALSE?
In most life insurance applications, the largest amount of information requested is data which identifies the applicant
FALSE
TRUE OR FALSE?
A policy is not rendered void by reason of misstatement of the assured’s death.
TRUE
TRUE OR FALSE?
In a case where the premium has not been paid and the cash values have been exhausted, the policy can still avail of the grace period.
FALSE
TRUE OR FALSE?
According to the law of large numbers, events which happen seemingly by chance will actually be bound to follow a predictable pattern, if enough such happenings are observed.
TRUE
TRUE OR FALSE?
Anti-selection occurs when persons in poor health wish to buy insurance
TRUE
TRUE OR FALSE?
A policy is still in force for the full-face amount and will remain in force for a further period of four years and 118 days, without the payment of any premiums has availed of paid up insurance option
FALSE
OR FALSE?
In the case of misstatement of age, the amount of insurance is adjusted to the amount which the premium paid at the correct age would have purchased.
TRUE
TRUE OR FALSE?
A policy that provided guaranteed cash values plus extra annual distributions and pays the insured after a specified time is known as a participating endowment.
TRUE
TRUE OR FALSE?
In a group insurance it is assumed that every member of the group is insurable, provided that every member of the group is working a minimum number of (usually 50 hours) each week
FALSE
