Trad Flashcards
1
Q
A fixed amount added to the premium of a given policy regardless of policy size is known as
a) Policy fee
b) Policy reserve
c) Policy values
d) Extra premium
A
a) Policy fee
2
Q
To calculate premiums for the other modes of premium payment, the annual premium is
a) Divided by the desired number of premium payments
b) Divided by a conversion factor for the mode of payments desired
c) Multiplied by a conversion factor for the mode of payments desired
d) Multiplied by a constant factor
A
c) Multiplied by a conversion factor for the mode of payments desired
3
Q
Benefits payable under health insurance policies cover
a) Accidental death and dismemberment benefits
b) Expense reimbursement benefits
c) Disability income benefits
d) All of the above
A
d) All of the above
4
Q
With employer-employee groups, an employee does not fill out a personal application for insurance. Instead he merely fills out.
a) An enrolment card
c) A certificate of insurance
coverage
b) A registration card
d) A salary deduction form
A
a) An enrolment card
5
Q
For a contract to be legal and binding
a) Parties to the contract must be members of the bar
b) Parties to the contract must be legally competent
c) Parties to the contract must be above 21
d) Parties to the contract must possess blood relationship
A
b) Parties to the contract must be legally competent
6
Q
A father enters into a life insurance contract on behalf of his child. In this case, the father is the
a) Insured
b) Beneficiary
c) Insurer
d) Applicant-owner
A
d) Applicant-owner
7
Q
For life insurance coverage to be valid, insurable interest must exist
a) Only at the inception of the policy
b) Only at the time of the loan
c) Throughout the entire lifetime of the policy
d) Both at the time of the policy issue and at the time of the loan but not necessarily throughout the lifetime of the policy.
A
a) Only at the inception of the policy
8
Q
The insurance code specifies that a contract does not take effect unless
a) The policy is delivered to an insured, his assignee or agent or to a beneficiary
b) Payment of the first premium is made to the insured or its authorized agent.
c) No change has taken place in the insurability of the life to be insured between the time of the application was completed and the time the policy was delivered
d) The insured has named in the policy no fewer than two beneficiaries.
A
b) Payment of the first premium is made to the insured or its authorized agent.
9
Q
All of the following would be practicable to become beneficiaries except
a) Children by former marriage
b) Brothers and sisters
c) Someone who owes you money
d) Someone to whom you owe money
A
c) Someone who owes you money
10
Q
Under the law pertaining to life insurance
a) Only minor children can be named irrevocable beneficiaries
b) Only the wife can be named irrevocable beneficiaries
c) Only the wife and the children can be named irrevocable beneficiaries
d) Any person with insurable interest can be named irrevocable beneficiaries
A
d) Any person with insurable interest can be named irrevocable beneficiaries
11
Q
A person has insurable interest in the life of
a) His child or grandchild
b) Any person upon whom he is wholly or in part dependent on, from whom he is receiving support or education.
c) Any person in whom he has pecuniary interest.
d) All of the above
A
d) All of the above
12
Q
The common practice of most life insurers is that the life insurance goes into force
a) When the application is received by the branch office
b) When the policy is delivered to the applicant
c) In accordance with the legal stipulation of the Insurance Code
d) When the agent gives a binding receipt
A
d) When the agent gives a binding receipt
13
Q
The parties involved in the life insurance contract are the
a) Insurance company and agent
b) Insurance company and insured
c) Agent and insured
d) Insured and beneficiary
A
b) Insurance company and insured
14
Q
According to insurance law, a common-law spouse cannot be designated a beneficiary
a) Since there is no benefit of marriage in the relationship
b) If his/her legal partner is still living and the previous marriage has not been legally dissolved
c) Since the common-law relationship is an immortal relationship
d) All of the above
A
b) If his/her legal partner is still living and the previous marriage has not been legally dissolved
15
Q
A policyholder may obtain money from the insurance company and still remain insured by
a) Surrendering the policy for its cash value
b) Discontinuing payment of premium for some period
c) Taking a policy loan
d) Taking the extended insurance option
A
c) Taking a policy loan
16
Q
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 insurance company will pay
a) The face amount
b) The face amount adjusted for misstatement of age
c) The sum of the premium paid
d) Slightly less than the face amount
A
b) The face amount adjusted for misstatement of age
17
Q
When explaining dividends, the following information must be supplied
a) That they are not guaranteed
b) The dividends paid up in the previous years
c) The anticipated dividends
d) The relation to the cost of the policy
A
a) That they are not guaranteed
18
Q
If the insured dies during the grace period of an unpaid life insurance policy, the amount payable to the beneficiary is usually the
a) Total premiums paid plus interest
b) Cash surrender value of the policy minus the unpaid premiums
c) Face amount of the policy minus the unpaid premiums
d) Full face amount
A
c) Face amount of the policy minus the unpaid premiums
19
Q
Choose the incorrect statement
The entire contract between the policyowner and the insurance company include
a) The application and the policy
b) Any verbal statement made by the agent to the applicant
c) Any document attached to the policy when issued
d) Any subsequent written amendments to the contract
A
b) Any verbal statement made by the agent to the applicant
20
Q
If a loan is taken on a participating policy, dividends for that policy while there is a loan against the policy will be
a) Suspended
b) Paid a reduced rate
c) Unaffected
d) Increased
A
c) Unaffected
21
Q
Mr. Juan Valdez wants a policy which will entitle him to receive dividends yearly.
What will you recommend to Mr. Valdez?
a) Participating Plans
b) Non-Participating Plans
c) Term Insurance
d) None of the above
A
a) Participating Plans
22
Q
An individual at age 35 purchases a policy under which he will in 20 years receive the face amount of the policy himself, if he is still alive at that date. This policy is obviously a
a) 20 Yr. Endowment
b) 20 Pay Life
c) 20 Yr. Term
d) None of the above
A
a) 20 Yr. Endowment
23
Q
In a 20 Life policy
a) Protection is until age 100, payment of premium is for 20 years
b) Protection is until age 100, payment of premiums until age 100
c) Protection is for 20 years, payment of premium is for 20 years
d) Protection is for 20 years, payment of premiums until age 100
A
a) Protection is until age 100, payment of premium is for 20 years
24
Q
A term insurance which allows the policyowners to convert it to a permanent insurance within a specified period without evidence of insurability contains
a) Convertibility
b) Renewability
c) Dividend option
d) both a &b
A
a) Convertibility
25
The main difference between a term plan and a permanent plan is
a) A permanent plans provide both protection and savings while term plans offer protection only
b) Permanent plans provides savings and dividends while term plans provide savings only
c) Permanent plans can be converted and renewed while term plans cannot
d) All of the above
a) A permanent plans provide both protection and savings while term plans offer protection only
26
The savings element of permanent plans allows for the build up of
a) Dividends
b) Cash values
c) Maturity benefits
d) Death benefits
b) Cash values
27
A term rider is
a) A term policy with a waiver of premium
b) Another name for a convertible term policy
c) A renewable term policy
d) A term insurance added to a permanent plan
d) A term insurance added to a permanent plan
28
Mr. Pedro Cruz became paralyzed as a result of jumping out of the window in an attempt to commit suicide. Under the usual provisions of a disability income policy, he would be entitled to
a) Received the total disability income benefit and the waiver of premiums
b) Receive partial disability benefits
c) Be granted the waiver premiums
d) Receive neither disability income nor waiver of premiums
d) Receive neither disability income nor waiver of premiums
29
One supplementary benefit offered is a payor's benefit which is intended to
a) Provide for the return of premiums to an adult payor in the event that a minor insured dies
b) Provide a waiver of premium benefit in the event of death or disability of the person paying the premiums
c) Allow the insurance company to pay the policy's proceeds to the person who seems equitably entitled to the proceeds
d) Assure that the adult payor will retain a vested interest in the policy when the insured reaches the age of majority
b) Provide a waiver of premium benefit in the event of death or disability of the person paying the premiums
30
If an insured is disabled and his life insurance policy is being continued in force through the waiver of premium, the dividends of the policy would
a) Cease
b) Continue at reduced rate
c) Continue as if the owner is paying the premium
d) Continue but they would be applied toward premium being waived
c) Continue as if the owner is paying the premium
31
A policy with a minor as the proposed insured is called
a) Rated policy
b) Juvenile policy
c) Regular policy
d) Substandard policy
b) Juvenile policy
32
Anti-selection occurs
a) When an agent thinks only of his own interest and not of his policy owners
b) When you purchase bad stocks with expectation that they will improve
c) When the insurance company accepts more than a share of poor risks
d) When persons in poor health wish to buy insurance
d) When persons in poor health wish to buy insurance
33
In insurance, risk means
a) Chances of you being paid by the company
b) Hazard on people's lives
c) Chances of the beneficiary being paid
d) None of the Above
b) Hazard on people's lives
34
In an Application, the information that must be disclosed include
a) Only his date and place of birth
b) Only his family history
c) Every fact in his knowledge that is material to the insurance
d) Only information he wants the agent to know
c) Every fact in his knowledge that is material to the insurance
35
Insurance companies have various sources of information and the insured. These are
a) Application Form
b) Medical Information Bureau
c) Inspection report
d) All of the Above
d) All of the Above
36
In insurance risk are classified as
a) Unacceptable and Acceptable
b) Regular and Irregular
c) Standard, Substandard and Declined
d) Complete and Incomplete
c) Standard, Substandard and Declined
37
A risk is considered substandard based on any or all of the following criteria
a) Death, occupation and moral character
b) Occupation, moral character and family health history
c) Income, educational attainment and occupation
d) Death, income and educational background
b) Occupation, moral character and family health history
38
A hazardous occupation could be defined
a) An occupation the duties of which expose the insured to a degree of danger of sustaining injury
b) An occupation in unhealthy working conditions exposing the insured to elements which can cause sickness
c) An occupation which exposes the insured to social hazards
d) All of the Above
d) All of the Above
39
Statement in the application forms are
a) Guarantees
b) Representation
c) Warranties
d) None of the Above
b) Representation
40
Mr. Roel Reyes has been confined in a hospital 3 years prior to his application for insurance. He therefore needs to give the following information
a) Name of attending doctor, diagnosis, date of confinement
b) The bill and medicines
c) Name of doctor only
d) Date of confinement only
a) Name of attending doctor, diagnosis, date of confinement
41
Insurance companies have a source of confidential medical information on applicant for life insurance. This is the
a) Agent confidential report bureau
b) Inspection report bureau
c) Financial standing bureau
d) Medical information bureau
d) Medical information bureau
42
An agent is filling out the Agent's Confidential Report. What information must he put in his report?
a) Information about insured's standing in the community
b) Information about insured's finances
c) All information he knows which are material to the application for insurance
d) a & b only
c) All information he knows which are material to the application for insurance
43
An annuity plan
a) Offers life insurance protection
b) Offers the waiver of premium benefit
c) Is the same as an endowment plan
d) Is a purchase of income
d) Is a purchase of income
44
A life insurance company earns income from two main sources
a) A premium income and investment income
b) Mortgage income and premium income
c) Dividend income and interest income
d) Mortgage income and dividend income
d) Mortgage income and dividend income
45
The person who purchases the annuity plan is called the
a) Assignor
b) Owner
c) Insured
d) Annuitant
d) Annuitant
46
Policy reserves are future obligation on the part of
a) The Insurance Commission
b) The Insurance Company
c) The beneficiary
d) The policy owner
b) The Insurance Company
47
Insurance companies which are owned by the policy owners are example of
a) Stock companies
b) Mutual companies
c) Family corporation
d) Open- end Companies
b) Mutual companies
48
Stock companies are owned by
a) Policy owners
b) Stock Holders
c) Creditors
d) Government
b) Stock Holders
49
In the case of life insurance a sale is considered completed if the applications is signed and payment of the first premium is made by the applicant. For the sale to be considered completed
a) A medical examination has to be made first
b) Payment of the first premium has to be made by the applicant in full or in part, as is specified. One of the acceptable methods of settlement is by cash or check in part, with a note for the balance
c) Payment of the first premium has to be made in full by a note first
d) The first premium has to be paid for in full and in cash
a) A medical examination has to be made first
50
Why is it important that the application is the basis of the policy?
a) Because the completed application is the basis of the policy contract and the company may accept or reject an application based on the information given in the application
b) For the agent to have available data of his prospect in connection with future
sales
d) None id the necessity of the insurer putting all relevant detail in the contract
a) Because the completed application is the basis of the policy contract and the company may accept or reject an application based on the information given in the application
51
Which of the following statement is correct?
a) Advertising by life insurance agents is prohibited
b) All information about client or a prospective client has to be treated as confidential
c) The agent should always recommend the amount and type of policy to a prospective client which would be profitable for the company
d) When an agent advertises his services in the press, he is not allowed to state the name of his company
b) All information about client or a prospective client has to be treated as confidential
52
All of the following statements regarding a life insurance application are correct except
a) It must be signed by the application
b) Usually it will be made a part of the policy contract
c) Misstatements of material facts could void the policy during the contestable period
d) Statements made on the application are warranties
d) Statements made on the application are warranties
53
Prior to granting a license, the IC requires proof of
a) A clean record of employment
b) A reasonable educational background
c) A perspective agent's character and reputation
d) All of the above
d) All of the above
54
The IC has the power to adjudicate insurance claims against insurance company for any single claim not exceeding
a) P 1,000,000.00
b) P 250,000.00
c) P 100,000.00
d) P 500,000.00
c) P 100,000.00
55
Which one of the following statements is correct?
a) An insurance agent's license will be renewed when the commissioner is satisfied that the information in the application is accurate and all requirements are met
b) An insurance agent's license is valid only for one month
c) An insurance agent's license is valid during the life time of the agent
d) An insurance agent's license will be renewed when the corresponding application and fee are received by the Insurance Commissioner.
a) An insurance agent's license will be renewed when the commissioner is satisfied that the information in the application is accurate and all requirements are met
56
The insurance industry is under government regulations because
a) It is required to account for money spent in company operations
b) It pays high taxes
c) It affects public interest
d) It is charitable institution
c) It affects public interest
57
Which one of the following statement is correct?
a) An agent is allowed to share commissions when selling a whole life policy but when selling a term policy
b) An agent is allowed to share commissions with another licensed agent or agents but with no one else
c) Sharing the commissions with any other person is called twisting
d) An agent is not allowed to share commission with any person
b) An agent is allowed to share commissions with another licensed agent or agents but with no one else
58
Which one of the following statement is correct?
a) Rebating of premiums can only be authorized by the head office of the insurer
b) A life insurance is not allowed to identity on his letter head the name of the insurer he represents
c) Life insurance agents are allowed to act for two insurers at the same time under the same license
d) Rebating of premium by an insurance agent is prohibited
d) Rebating of premium by an insurance agent is prohibited
59
Persuading a policy owner, directly or indirectly, to surrender or lapse a policy in one company and replacing it with a policy in another company is
a) Rebating
b) Knocking
c) Twisting
d) Discounting
b) Knocking
60
Rebating is a
a) Dating the policy a month in advance
c) Twisting
b) Giving false information
d) Premium discrimination against policy holders
d) Premium discrimination against policy holders
61
An insurance agent's license can be revoked for
a) Fraudulent practices
b) Violation of any provision of the Insurance Code
c) Misrepresentation in the application for license
d) Any or All of the Above
d) Any or All of the Above
62
One example covered under the ethical practices and procedures is
a) Keep all the policy holders information confidential
b) Always recommend a will
c) Never drink in front of client
d) Always pick up the first premium with the application for insurance
a) Keep all the policy holders information confidential
63
The term knocking is
a) Promising to pay to two annuitants a fixed annual income as long as both survive
b) Making derogatory remarks about competing underwriters or companies
c) The number of years that person at a given age will live on the average as shown by the mortality table
d) None of the Above
b) Making derogatory remarks about competing underwriters or companies
64
The following are unethical practices in the solicitation and procurement of insurance except
a) Misleading estimates of the dividends or shares of surplus to be received there
on
b) Inducing a policy holder to lapse, forfeit or surrender a policy he holds for another company
c) Misrepresenting the terms of any policy issue by any insurance company or the benefits or advantages promised there on
d) Obtaining or attempting to obtain a license by fraud or misrepresentation
d) Obtaining or attempting to obtain a license by fraud or misrepresentation
65
Twisting is
a) Paying the premium on one policy by surrendering the dividends of another
policy
b) The replacement of a policy in one company with another policy in another company
c) An attempt made by an insurance company to secure the services of an agent from another company
d) An offense which does not apply to variable concepts
b) The replacement of a policy in one company with another policy in another company
66
The misstatement of the facts by either of the parties of insurance to the other whether in writing or orally preliminary and in reference to making the insurance contract is
a) Knocking
b) Overloading
c) Misrepresentation
d) Twisting
c) Misrepresentation
67
Selling a person more insurance than what is wanted by his sources is called
a) Overloading
b) Twisting
c) Misrepresentation
d) Twisting
a) Overloading
68
An agent is prohibited from doing all of the following except:
a) Alter an application without the applicant prior written approval
b) Convince a prospective client to cancel his policy in one insurance company in order to buy a policy in the insurance company represented by the agent.
c) Refund some of his commission to his client
d) Make complete comparisons of a policies he sells and those offered by competing insurance companies
d) Make complete comparisons of a policies he sells and those offered by competing insurance companies
69
Inducing an insured to lapse or forfeit his insurance
a) Is not allowed by the conditions of the contract
b) Is always to the advantage of the policy holder
c) Is an offense in the great majority cases
d) Is a matter left entirely to the discretion of the agent
c) Is an offense in the great majority cases
70
The suicide clause is in effect for
a) The first 6 months
b) The first year
c) The first 2 years
d) The first 18 months
c) The first 2 years
71
The three non-forfeiture values in a permanent policy are
a) Cash dividends, bonus additions an extended term insurance
b) Cash surrender value, loan value, assignment
c) Waiver of premium, reinstatement and the policy loan
d) Cash surrender value, paid value, extended term insurance
d) Cash surrender value, paid value, extended term insurance
72
In the event that a policy elects the paid up insurance option
a) The premium stop and the policy continues for the full face amount until age 65
b) The premium cease and protection continues with a reduced amount of coverage
c) The insurance continues at a reduced amount and with a reduced premium
d) The policy will automatically terminate
b) The premium cease and protection continues with a reduced amount of coverage
73
What are the basic settlement options?
a) Cash surrender value, automatic premium loan
b) Fixed amount, Fixed period, interest, fixed period and for life
c) Double indemnity, total disability waiver of premium
d) Policy loans, assignment, beneficiary designation
b) Fixed amount, Fixed period, interest, fixed period and for life
74
In case of misstatement of age
a) The policy is cancelled and a new one is issued for the correct age
b) The insured can be change
c) The amount of insurance is adjusted to the amount which the premium paid at the correct age would have purchased
d) The policy remains in force and the company cannot contest
c) The amount of insurance is adjusted to the amount which the premium paid at the correct age would have purchased
75
Which of the following is a settlement option?
a) Policy loan
b) Cash surrender value
c) Extended term insurance option
d) interest on insurance proceeds
d) interest on insurance proceeds
76
Name the provision in a permanent life insurance policy under which if the premiums are discontinued full insurance coverage will be maintained for a specified.
a) Extended term insurance
b) Paid up insurance
c) Paid up additions
d) Life income option
a) Extended term insurance
77
Which one of the following is not derived from the non-forfeiture values?
a) Cash surrender value
b) Paid up insurance
c) Dividends
d) Extended term insurance
c) Dividends
78
Mr. Dela Cruz stated in his application that he was 30 years of age and a policy was issued to him on that basis. When he died twenty years later it was found out that, in fact, he was 34 years of age at the time of his application. In conformity with the Insurance Code, the company
a) Paid the amount of insurance payable to his beneficiaries reduced in relation to his actual age at the time the contract was signed.
b) Paid one half of the face value of the policy
c) Need not pay the face value of the policy but refund all premiums paid
d) Paid the full face value of the policy without any extra charges
a) Paid the amount of insurance payable to his beneficiaries reduced in relation to his actual age at the time the contract was signed.
79
In the event that the policy owner elects the paid-up insurance option
a) Premiums stop and the policy continues for a full face amount until age 65
b) Premium cease and protection continues for a reduced amount
c) Insurance continuous at a reduced amount and with reduced premium
d) The policy will automatically terminate
b) Premium cease and protection continues for a reduced amount
80
If a policy owner commits suicide within one year, what's the company's liability?
a) The company is not liable at all
b) The company would be liable for the payment of the face value of the policy
c) The company would be liable for the payment of the premiums paid by the insured only
d) None of the Above
c) The company would be liable for the payment of the premiums paid by the insured only
81
Which of the non-forfeiture option gives the largest amount of protection?
a) Fully paid insurance
b) Cash surrender value
c) Extended term insurance
d) All of the Above give equal protection
c) Extended term insurance
82
Any policy which has lapsed can be reinstated subject to normal condition of proof of insurability within
a) Three years
b) Six months
c) One year
d) Two years
a) Three years
83
Life insurance is
a) A luxury afforded by the rich
b) Only available to a specific group
c) A cooperative risk-sharing plan
d) A speculative risk
c) A cooperative risk-sharing plan
84
The official who makes the necessary assumption and calculation in respect of the principal elements in life insurance premium in order to arrive at the premium rates
a) Life agent
b) Insurance Commissioner
c) Senior statistician
d) Actuary
d) Actuary
85
Since the purchase of life insurance is a voluntary choice the individual must meet
a) Comprehensive inspection
b) Certain standards of health and occupation
c) A satisfactory medical examination
d) A minimum income figure
b) Certain standards of health and occupation
86
The fundamental advantage of the use of life insurance as a means of meeting a economic losses is that through insurance these losses are
a) Spread over a large number of people
b) Deferred for a specific period of time
c) Reduced for the group as a whole through multiplier effect
d) Met as they arise through savings accumulated on an assessment basis
a) Spread over a large number of people
87
The term loading means
a) The difference between the gross and net premiums for the purpose of paying the insurance overhead expenses including commission and taxes
b) The amount which the company will lend to the policy holder with the policy as a security
c) The amount payable in the event of the occurrence of a loss which renders him unfit for insurance.
d) None of Above
a) The difference between the gross and net premiums for the purpose of paying the insurance overhead expenses including commission and taxes
88
Life Insurance contributes directly to the welfare and progress of the country by
a) Accumulating Capital for investment in commerce and industry
b) Partially relieving the community of the care of dependents
c) Encouraging provisions for the future
d) All of the Above
d) All of the Above
89
Life insurance can provide money when income stops because of
a) Disability
b) Death
c) Retirement
d) All of the Above
d) All of the Above
90
The three elements that make up a life insurance premium are
a) Mortality experience, investment earnings and operating expenses
b) Cash values, dividends and paid up values
c) Cash values, loan values and paid up values
d) Past dividend experience, present dividend and projected interest
a) Mortality experience, investment earnings and operating expenses
91
The number of years that person at a given age will live on the average as shown by the mortality table is called
a) Law of large numbers
b) Life income option
c) Life annuity
d) Life expectancy
d) Life expectancy
92
Part of the premium paid by a policy holder is invested by the insurance company.
In premium computation, this factor is known as
a) Interest
b) Investment
c) Loading
d) Mortality
a) Interest
93
Which of the following factors would have the least effect on the premium charged for life insurance
a) Age
b) Occupation
c) Income
d) All of the Above
c) Income
94
Since the purchase of life insurance is a voluntary choice, the individual must
meet
a) Comprehensive inspection report
b) Certain standards of health and occupation
c) Minimum income requirement
d) All of the above
b) Certain standards of health and occupation
95
Life insurance policies for which higher than standard premium rates are payable are said to be
a) Rated policies
b) Contingent policies
c) Non-Participating policies
d) Conditional policies
a) Rated policies
96
A person wanting a greater coverage for the least amount of premium has an option of attaching what rider in his permanent life policy?
a) A waiver of premium
b) Term insurance rider
c) Guaranteed insurability rider
d) Accidental death rider
b) Term insurance rider
97
Disability benefits are not paid
a) For self-inflicted injuries
b) If there is a loan against the policy
c) If all the policy dividends have been withdrawn
d) If disability resulted from sickness only
a) For self-inflicted injuries
98
If a policy with the accidental death rider becomes paid up
a) The accidental death rider ceases
b) The face amount of the policy is reduced
c) Premiums on the basic policy stop but the rider premium continues
d) None of the above
a) The accidental death rider ceases
99
For the waiver of premium to be effective
a) Disability must be total
b) Disability must be permanent
c) Both a & b
d) Either a or b
c) Both a & b
100
An optional rider which can be attached to a policy stopping further premium payments in the event of disability is called
a) Policyholder protection clause
b) Accidental death and dismemberment
c) Waiver of premium
d) Total disability monthly income
c) Waiver of premium
101
A term policy only offers
a) Cash values
b) Protection
c) Savings
d) Dividends
b) Protection
102
Two attractive features of a Term Insurance are:
a) Convertible and cash values
b) Cash values and dividends
c) Protection and dividends
d) Convertibility and renewability
d) Convertibility and renewability
103
Mrs. Rose Cortez owns a policy which does not provide for the build up of cash values and whose premiums remain level. Mrs. Cortez owns:
a) Ordinary Life
b) Limited Pay Life
c) Deceasing Term
d) Level Term
d) Level Term
104
A participating plan entitles the policyowner to receive a return of excess premiums. Such is termed as:
a) Endowments
b) Dividends
c) Cash Values
d) Cash Surrender Value
b) Dividends
105
Which of the following can give the longest protection?
a) 20 Yr. Endowment
b) 20 Pay Life
c) Ordinary Life
d) 20 Yr. Term
c) Ordinary Life
106
A man with moderate means can have maximum protection possible through
a) 20 Yr. Endowment
b) Limited Pay Life
c) Term Insurance
d) Whole Life Insurance
c) Term Insurance
107
An insurance plan which offers both protection and savings is called
a) Temporary Plan
b) Permanent Plan
c) Participating Plan
d) Non-Participating Plan
b) Permanent Plan
108
Interest is charged on policy loans
a) For registered policies only
b) If the loans is outstanding for more than a year, a loan repaid within a year is interest free
c) To replace investment income the insurer cannot earn since a loan has been granted
d) For participating policies only
c) To replace investment income the insurer cannot earn since a loan has been granted
109
If a policyowner whose wife is the irrevocable beneficiary wishes to cash in his policy, he must
a) Tell his wife what he is going to do
b) First take a loan on the policy
c) Have the check issued in the name of his wife
d) Have the wife's consent
d) Have the wife's consent
110
If a policyowner does not pay a premium on the due date, the policy will immediately
a) Lapse
b) Be converted to a paid up policy for a lesser amount
c) Go into automatic premium loan
d) Continue in full force for a period of grace.
d) Continue in full force for a period of grace.
111
If a policy did not contain the name of a beneficiary the beneficiary will be
a) The wife
b) The children
c) The insured's brothers & sisters
d) The insured's estate
d) The insured's estate
112
When policy is assigned absolutely
a) The assignee acquires all the rights and interest of the original policyholder.
b) The original policyholder still can exercise some of the rights.
c) The original beneficiary is not changed
d) None of the above.
a) The assignee acquires all the rights and interest of the original policyholder.
113
An automatic premium loan differs from the other policy loan in that an automatic premium loan
a) Need not be repaid by the policyowner
b) Must be repaid during the policy year in which it us granted
c) Goes into effect requiring no separate action from the policyowner
d) Involves higher interest payments because of the greater cost of administration
c) Goes into effect requiring no separate action from the policyowner
114
The typical grace period provision in a life insurance policy obliges the life insurance company to
a) Establish a policy loan to cover any premium which the policyowner fails to pay by due date
b) Keep the policy in force for the duration of any major disability suffered by the policyowner
c) Allows the policyowner a three-month extension beyond the due date to make the late premium payment without penalty.
d) None of the above
d) None of the above
115
Within two years of buying a life insurance policy, you are accidentally killed when your car hits a tree. In these circumstances the insurance company will
a) Refund premiums because it is suicide
b) Pay double the face amount
c) Pay the face amount
d) Pay nothing
c) Pay the face amount
116
The convertible feature of a term insurance policy provides that the policy may be
a) Changed to a permanent insurance policy without evidence of insurability
b) Changed to another life
c) Cashed foe a guaranteed sum
d) Changed to permanent insurance with evidence of insurability
a) Changed to a permanent insurance policy without evidence of insurability
117
Which one of the following provisions in a permanent life insurance policy may lapse for non-payment of premium?
a) Guaranteed Insurability
b) Automatic Premium Loan
c) Settlement Options
d) Reinstatement Provision
b) Automatic Premium Loan
118
Anybody can be designated a beneficiary except
a) A creditor
b) Minors
c) Those expressly prohibited by law to receive donations
d) All of the above
c) Those expressly prohibited by law to receive donations
119
When the proceeds of a life insurance policy are left with the company to earn interest
a) Income tax is levied on the proceeds
b) Income tax is levied on the interest earnings of the proceeds
c) Estate tax is levied on the proceeds
d) Donor's tax is levied on the proceeds
b) Income tax is levied on the interest earnings of the proceeds
120
In the event an employee leaves the company in which he is a member of its Group insurance policy, his group coverage can be changed to an individual policy using the
a) Policy exchange facility
b) Conversion privilege
c) Change a plan provision
d) Policy change form
b) Conversion privilege
121
To be able to calculate the required premiums for a given policy, the agent must know the applicant's
a) Age
b) Choice of plan
c) Face amount desired
d) All of the above
d) All of the above
122
A single premium policy means a policy
a) Requiring only a single premium each year
b) Under which only one premium payment is required
c) Only available to single individuals
d) On which no more than one premium can be paid in advance
b) Under which only one premium payment is required
