TRAD-Mock Exam

Question 1

A life insurance agent is permitted to

a. Approve an application for insurance
b. Waive any of the requirement of the company
c. Guarantee dividends on participating policies
d. Prepare routine proposals for life insurance coverage

Answer 1

d. Prepare routine proposals for life insurance coverage

Question 2

Claire is considering purchasing either an 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

Answer 2

a. Insurance protection will be limited to a specified period

Question 3

A client tells you that his bank wants him to use his insurance policy so that his bank loan will be
paid off if he dies. Which of the following will you recommend?

a. He appoints an irrevocable beneficiary
b. He makes an absolute assignment
c. He makes a collateral assignment
d. None of the above

Answer 3

c. He makes a collateral assignment

Question 4

If premiums are being waived under a waiver of premiums benefit and the insured dies, what would the
proceeds be?

a. Reduced paid-up face amount
b. Face amount less unpaid premiums
c. Cash surrender values
d. Face amount

Answer 4

d. Face amount

Question 5

Which of the following is a living benefit in an insurance policy?

a. Guaranteed insurability benefit
b. Right to change beneficiaries
c. Waiver of premium for disability
d. Cash surrender value

Answer 5

d. Cash surrender value

Question 6

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 entered
d. To make sure that he will pay the premiums

Answer 6

b. To establish that there is a genuine risk

Question 7

Your client George wants to apply for a life insurance policy. As his advisor, you would advise
him to do all of the following, EXCEPT which one?

a. Furnish initial information as to insurability
b. 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

Answer 7

c. To convey to the company the desire of the applicant to obtain insurance

Question 8

Which of the following does 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

Answer 8

a. Protection for the life of the policyholder with premiums payable for a limited term of
years

Question 9

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. Which of the following
will the insurer 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

Answer 9

a. The face amount adjusted for misstatement of age

Question 10

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

Answer 10

b. Death of the employee regardless of cause except suicide during the first year
(sometimes two years)

Question 11

Your client tells you that when his father died, he received P500,000 free of Estate Tax, and that
he had not even known that his 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

Answer 11

d. Irrevocable primary beneficiary

Question 12

Mr. Sy walked out of his house one night, and was never heard from since. His wife wanted to
make a claim on his insurance policy, as she believes that he is dead. In this case, which of the
following statements is correct?

a. It will take four years before the court could declare him legally dead.
b. It will take seven years before the court could declare him legally dead.
c. The company will pay immediately.
d. It will require 6 months before the court could declare him dead.

Answer 12

b. It will take seven years before the court could declare him legally dead.

Question 13

In life insurance, which of the following does the term “substandard rates” generally 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

Answer 13

b. Premiums charged to persons who are considered to be higher-than-average risk
categories

Question 14

Life insurance policy loans are limited to an amount which with interest will not exceed the ___.

a. Cash value of the policy
b. Total premiums paid
c. Net amount of risk
d. Present value of future premiums

Answer 14

a. Cash value of the policy

Question 15

What happens to a policy when an irrevocable beneficiary has been designated and the policy
owner needs to loan against his policy for a specific reason?

a. Alter the dividend option now in effect
b. Any transactions or changes in the policy would need the endorsement of the
irrevocable beneficiary
c. Avail of a non-forfeiture option
d. Borrow minimal cash loan

Answer 15

b. Any transactions or changes in the policy would need the endorsement of the
irrevocable beneficiary

Question 16

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

Answer 16

d. Spread over a large number of people

Question 17

Which of the following statements is FALSE?

a. When an agent makes a sales presentation, he has to sell confidence in the product.
b. When an agent meets a prospect for the first, he has to sell confidence in himself.
c. The primary job of an agent is to get people happily involved with the ownership of his
policy.
d. The job of an agent is to squeeze as much money as possible out of making a new sale.

Answer 17

d. The job of an agent is to squeeze as much money as possible out of making a new sale.

Question 18

What will happen if the insured fails to pay the interest on a policy loan during its policy
anniversary?

a. Terminate the contract
b. Refuse to grant future additional loan
c. Increase the present loan by the interest
d. Demand full settlement of the loan

Answer 18

c. Increase the present loan by the interest

Question 19

If a policyholder changes his occupation without notifying the company, would it affect the
benefits under his policy?

a. No, benefits and premiums may only be changed at the renewal date of the policy.
b. Yes, unless the policy specified otherwise. If he engaged in a more hazardous
occupation, his benefits may be pro-rated.
c. No, benefits agreed upon at the inception of the policy may not be changed.
d. None of the above.

Answer 19

c. No, benefits agreed upon at the inception of the policy may not be changed.

Question 20

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 loan, guaranteed insurability

Answer 20

b. Fixed amount, fixed period, interest, fixed period and for life

Question 21

A businessman has arranged for a development loan that will available 1 year from now.
Because he is unable to wait until then he has arranged an interim loan with his bank. The only
problem is that the bank wants loan secured against the risk of his death. What is the best
economic arrangement that you recommend?

a. Decreasing term
b. Interim term
c. Extended term
d. Yearly renewable term

Answer 21

d. Yearly renewable term

Question 22

In which circumstance does an insurance company have the right to rescind a policy?

a. Insured person is killed in military action during the contestable period of the policy
b. Insured person intentionally kills himself during the suicide exclusion period specified in
the policy
c. Company discovers during the contestable period that the application contains a
material statement
d. Company discovers at any time that the policy owner was actually a minor at the time of
application

Answer 22

d. Company discovers at any time that the policy owner was actually a minor at the time of
application

Question 23

A prospect tells you that he wants to be insured at age 65, but he does not want to pay more
than the minimum possible level of premiums. Would you offer him?

a. Endowment policy
b. Term policy
c. Whole life policy
d. A life at age 65 policy

Answer 23

b. Term policy

Question 24

An applicant wants to get a participating policy that will have the maximum cash available for
emergencies. Which of the following should he select?

a. Accumulated dividends
b. Extended term insurance
c. Loan value
d. Paid-up addition

Answer 24

a. Accumulated dividends

Question 25

The following statements are true with respect to reinstatement process EXCEPT ____.

a. Assumption or repayment of any indebtedness
b. Written assurance of intent to keep the policy in force
c. Payment of back premiums with interest
d. An application for reinstatement

Answer 25

b. Written assurance of intent to keep the policy in force

Question 26

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

Answer 26

c. Face amount of the policy minus the unpaid premiums

Question 27

Which of the following best describes a person’s human economic value?

a. Total value of the individual’s tax contribution to the national economy
b. Total value of his physical assets
c. The amount of capital required to replace family income needs
d. Total value of the assets and any future earnings derived therefrom

Answer 27

d. Total value of the assets and any future earnings derived therefrom

Question 28

The basic purposes of a conditional premium receipt are to acknowledge payment of initial
premium for life insurance and to ____.

a. Eliminate the need for acceptance of the offer in forming the contract
b. Provide insurance coverage earlier than the policy delivery date if certain requirements
are met
c. Guarantee that a policy will be issues as applied for
d. Backdate the policy to save age

Answer 28

b. Provide insurance coverage earlier than the policy delivery date if certain requirements
are met

Question 29

Which of the following statements best describes a Pure Endowment policy?

a. It pays proceeds to the insured only if he lives to the end of a specified period.
b. It pays proceeds to the insured if he lives to the end of endowment period, or pays the
face amount to named beneficiary if the insured dies before the end of the endowment
period.
c. It is actually a combination of endowment insurance and term insurance.
d. None of the above.

Answer 29

a. It pays proceeds to the insured only if he lives to the end of a specified period.

Question 30

Which of the following considerations is required by the life insurance company to make the
insurance coverage effective?

a. Beneficiary’s continuing insurable interest in the life of the insured
b. Payment of the initial premium
c. Applicant’s promise to act in good faith
d. Payment of each renewal premium before the end of applicable period

Answer 30

b. Payment of the initial premium

Question 31

Gwen is thinking of electing the paid-up insurance option, what will happen to her policy if she
does?

a. The premiums cease and protection continues with a reduced amount of coverage.
b. The premiums stop and the policy continues for the full face amount until age 65.
c. The insurance continues at a reduced amount and with a reduced premium.
d. The policy will automatically terminate.

Answer 31

a. The premiums cease and protection continues with a reduced amount of coverage.

Question 32

The company usually allows a policy change from a higher premium to a lower premium if the
insured ____.

a. Momentarily assigns the policy to the company
b. Buys a new plan altogether
c. Presents satisfactory evidence of insurability
d. Obtains written consent from his or her spouse

Answer 32

c. Presents satisfactory evidence of insurability

Question 33

An applicant wants a participating policy where the death benefit will be maximized. Which of
the following should he choose?

a. Paid-up additions
b. Accumulated dividend
c. Extended term
d. Paid-up insurance (reduced insurance)

Answer 33

a. Paid-up additions

Question 34

Which statement is false when the new owner borrows on a policy?

a. If a large loan is taken after the policy has been in force for some years, the interest cost
may exceed the premium.
b. Dividend will be reduced by the amount of the current interest.
c. The policy will lapse if, after reasonable notice, the indebtedness exceeds the cash
value.
d. The proceeds of the policy will be reduced by the amount of unpaid loan plus interest, if
the insured dies.

Answer 34

b. Dividend will be reduced by the amount of the current interest.

Question 35

Which of the following does a whole life provide?

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 specific term of years
d. Protection with premiums payable for life and low level of savings as an alternative to
continued protection in old age

Answer 35

d. Protection with premiums payable for life and low level of savings as an alternative to
continued protection in old age

Question 36

In practice, most claims for the death benefits of life insurance policies are ____.

a. Investigated thoroughly for evidence of misrepresentation or fraud before payment is
made
b. Paid on the first policy anniversary after the death of the insures
c. Settled by interpleader proceedings
d. Paid promptly as soon as properly completed claim forms are received by the company

Answer 36

d. Paid promptly as soon as properly completed claim forms are received by the company

Question 37

The following statements concerning insurable interest are correct, except:

a. It is deemed to exist if economic loss would occur at the death of the insured
b. It is deemed to exist by virtue of a relationship by blood or by marriage
c. It is important for purposes of underwriting the risk
d. Everyone has an insurable interest in his own life

Answer 37

c. It is important for purposes of underwriting the risk

Question 38

Which policy permits the policyholder to vary the level of premiums, the sum insured, and has
its cash values dependent on the investment performance, and the level of premiums paid?

a. Universal life
b. Participating whole life policy
c. Participating endowment
d. None of the above

Answer 38

a. Universal life

Question 39

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

Answer 39

d. All of the above

Question 40

For the waiver of premium to be effective

a. Disability must be total
b. Disability must be permanent
c. Both a and b
d. Either a and b

Answer 40

c. Both a and b

Question 41

In a life insurance company, risk appraisal is necessary to:

a. Prevent anti-selection
b. Project dividend rates for participating policies
c. Collate mortality statistics
d. Calculate the mortality rate for a given policy

Answer 41

a. Prevent anti-selection

Question 42

Limited payment life policies are called as such because those policies _____.

a. Shorten the period when the benefits may be paid
b. Limit the period during which the premiums are payable
c. Limit the conditions under which the policies are payable
d. Limit the number of beneficiaries, thereby, minimizing the problems of paying too many
people

Answer 42

b. Limit the period during which the premiums are payable

Question 43

Which of the following is a settlement option?

a. Cash surrender value
b. Extended term insurance option
c. Policy loan
d. Interest on insurance proceeds

Answer 43

d. Interest on insurance proceeds

Question 44

The following statements about “Disability Waiver of Premium Rider” are true, except:

a. There is a waiting period
b. Disability must occur before a stated date
c. The insured has to die while disabled
d. It has to be attached to a life insurance policy

Answer 44

c. The insured has to die while disabled

Question 45

Which of the following statements is false?

a. Too many lapsed policies can cause an agent’s agreement to be cancelled.
b. When a policy lapses, the agent loses a valuable source of prospect.
c. When a policy lapses, the agent loses all future commissions on renewal premiums.
d. Agents with persistent business seldom stay long with one company.

Answer 45

d. Agents with persistent business seldom stay long with one company.

Question 46

Under an endowment policy, if the person whose life is insured survives to the end of the
period stated in the policy, the ___.

a. Policy will terminate without value
b. Face amount of the policy be paid
c. Policy will automatically be converted to paid-up whole policy
d. The extended term insurance will be brought into effect

Answer 46

b. Face amount of the policy be paid

Question 47

“Critical years” in the programming of life insurance means:

a. Retirement years
b. Years between the time the youngest child is 15 years old and the mother is 62 years old
c. Years immediately following the insured’s death
d. Period during which the children are small, and cannot provide for themselves

Answer 47

d. Period during which the children are small, and cannot provide for themselves

Question 48

Jared wants to update his yearly renewable term life insurance policy. Which of the following
applies to a yearly renewable term life insurance?

a. The policy owner may renew the policy only once.
b. Evidence of insurability shall be required every renewal.
c. Cash values will increase for as long as the policy is in force.
d. Premiums shall increase every time the policy is renewed.

Answer 48

d. Premiums shall increase every time the policy is renewed.

Question 49

The Insurance Commissioner has the power to revoke or refuse an agent’s license in all of the
following instances, except:

a. When the applicant for license has intentionally withheld information concerning his
conviction of a crime involving moral turpitude
b. When the agent has diverted any premium collection for his personal use
c. When an agent influences the applicant’s choice of plan to be purchased
d. None of the above

Answer 49

c. When an agent influences the applicant’s choice of plan to be purchased

Question 50

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 the information he wants the agent to know

Answer 50

c. Every fact in his knowledge that is material to the insurance

Question 51

Which rider could greatly increase the total life coverage of a permanent basic policy?

a. An accidental death benefit rider
b. A supplemental term rider
c. An interim term rider
d. None of the above

Answer 51

b. A supplemental term rider

Question 52

When does an interpleader come into play?

a. To decide conflicting claims on the same insurance proceeds
b. To determine if the cause of the insured’s death was an excluded risk
c. To recommend the best settlement options for the beneficiary if the interest on a policy
loan is not paid at the policy anniversary of the insurance
d. To resolve the question of insurable interest

Answer 52

a. To decide conflicting claims on the same insurance proceeds

Question 53

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 lifetime of the policy
d. Both at the time of policy issue and at the time of the loan but not necessarily
throughout the lifetime of the policy

Answer 53

a. Only at the inception of the policy

Question 54

How does the law of probability help life insurance companies?

a. Predict when an individual insured will die
b. Estimate future death rates among members of a given group
c. Determine the experienced death rate among the insured persons
d. Develop statistics of past deaths among the general population

Answer 54

b. Estimate future death rates among members of a given group

Question 55

If Phoebe wants to continue her renewable term insurance, which of the following she may do?

a. Change the life insured at renewable date
b. Renew at the same premium for further period of years
c. Renew providing the insurance company agrees to continue coverage
d. Renew the coverage based on a higher premium

Answer 55

d. Renew the coverage based on a higher premium

Question 56

Mr. Barrio has been insured under the employee group life insurance plan for several years.
Which of the following will happen to Mr. Barrios’ group life insurance if he leaves this job?

a. Changed, upon the employer’s notice to the insurance company, to a permanent plan of
insurance for the same amount
b. Continue to provide coverage of the same amount for a period of 31 days during which
Mr. Barrio can convert to an individual policy
c. Cover him for a reduced amount of paid-up term insurance until the end of the current
policy year
d. Coverage will stop at once

Answer 56

b. Continue to provide coverage of the same amount for a period of 31 days during which
Mr. Barrio can convert to an individual policy

Question 57

A whole life policy with an initial premium rate that applies to the first five (5) years of the
policy and a higher premium rate that applies to the remainder of the premium-payment
period is known as ____.

a. An extended life policy
b. A modified life policy
c. An experience-premium policy
d. A guaranteed renewable policy

Answer 57

b. A modified life policy

Question 58

What is the purpose of the incontestability clause?

a. Permits that company to pay claims within two (2) years
b. Gives the company the right to rescind a policy at any time
c. Prevents the company from denying a claim after the policy has been in force for two (2)
years
d. Makes it necessary for the beneficiary to present proof of death in the event of a death
claim

Answer 58

c. Prevents the company from denying a claim after the policy has been in force for two (2)
years

Question 59

In life insurance, there is always “agency” relationship between the ____.

a. Beneficiary and the insurance company
b. Insured and the insurance company
c. Soliciting agent and insurance company
d. Policyowner and the soliciting agent

Answer 59

c. Soliciting agent and insurance company

Question 60

Clark applied for a Ps. 20,000 whole life policy, and paid the full initial premium to his agent,
who issued a binding receipt. Under such scenario, what does the insurance company do?

a. Guarantee the policy will be issued as applied for
b. Offer permanent insurance coverage effective as of the date of the application
c. Immediately provides interim insurance that remains in effect until the policy is issued
or the application is declined
d. Promise that the insurance coverage will become effective as of the date of the
application is approved

Answer 60

c. Immediately provides interim insurance that remains in effect until the policy is issued
or the application is declined

Question 61

Which of the following statement is correct?

a. Orphan policy owners hardly need an agent’s services
b. Orphan policy owners will only deal with their original agents
c. New agents should stay away from orphan policy owners
d. Orphan policy owners are good sources of prospect and new sales

Answer 61

d. Orphan policy owners are good sources of prospect and new sales

Question 62

The widow of your policyholder tells that she does not want a lump sum payment, but she
prefers to receive monthly allowance for the rest of her natural life. Which option do you
recommend?

a. Periodic annuity option
b. Life annuity option
c. Fixed period option
d. Fixed income option

Answer 62

b. Life annuity option

Question 63

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 heath history
c. Income, educational attainment and occupation
d. Death income and educational background

Answer 63

b. Occupation, moral character and family heath history

Question 64

How are endowment life insurance and term life insurance the same?

a. Build up cash value rapidly in the early policy years
b. Provide for payment of the face amount if the insured is alive at the end of specified
period
c. Contain provisions for automatic continuation of the insurance protection at the end of
a specified period
d. Provide life insurance protection for only a period of time specified in the policy
contract

Answer 64

d. Provide life insurance protection for only a period of time specified in the policy
contract

Question 65

A prospect tells you that he wants the maximum possible provision for his retirement with no
life coverage. Which of the following would you offer him?

a. Whole life policy
b. A life paid-up at age 65 policy
c. A 20-pay life policy
d. None of the above

Answer 65

d. None of the above

Question 66

Some insurance companies charge females a lower premium rate than males. Which of the
following justifies the practice?

a. Women are less likely to lapse the policies
b. Generally, women have less hazardous jobs
c. Women have a longer life expectancy (after age 54) than men
d. Generally, women buy the higher premium rate policies, such as an endowment policy
or retirement income policy

Answer 66

c. Women have a longer life expectancy (after age 54) than men

Question 67

At the end of 25 years, which statement is true for a 25-year Life policy and is not for a 25-year
endowment?

a. No further premiums are paid
b. The contract is terminated
c. The sum insured is paid
d. The insurance remains in-force

Answer 67

d. The insurance remains in-force

Question 68

Which of the following sales practices determines a prospect’s complete financial requirement
before offering a policy?

a. Planned selling
b. Counselor selling
c. Multiple products selling
d. Total needs selling

Answer 68

d. Total needs selling

Question 69

Insurance provides protection against economic loss by enabling the policy owner to ____.

a. Transfer responsibility for the loss to others
b. Take speculative risk to compensate for the loss
c. Reduce the possibility of the occurrence of the event causing the loss
d. Share the loss with others exposed to similar risk

Answer 69

d. Share the loss with others exposed to similar risk

Question 70

When is the only instance a life insurance contract is treated primarily as an indemnity
agreement?

a. A person insures the life of a friend
b. Creditor insures the life of his debtor to protect himself
c. Person insures the life of his or her spouse to protect against the loss of income earned
by the spouse
d. Person in a partnership insures the life of his partner to protect the firm against loss due
to the death of that partner

Answer 70

b. Creditor insures the life of his debtor to protect himself

Question 71

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 for a guaranteed sum
d. Changed to permanent insurance with evidence of insurability

Answer 71

a. Changed to a permanent insurance policy without evidence of insurability

Question 72

William chose a straight-premium whole life policy over a limited payment whole life policy.
What is the advantage of such purchase?

a. Liberal risk selection procedures
b. Concentration of premium payments during the period of highest earnings
c. More rapid accumulations cash values
d. More insurance protection for the same annual premiums outlay

Answer 72

d. More insurance protection for the same annual premiums outlay

Question 73

Life insurance guarantees cash benefits for all the following except:

a. Clean-up fund
b. Family dependency period income
c. Educational fund
d. Mortgage

Answer 73

b. Family dependency period income

Question 74

The following have a legitimate insurable interest except:
a. An individual on his own life
b. An individual on the life of his spouse
c. A finance company on the life of its borrower
d. An individual on the life of his mistress

Answer 74

d. An individual on the life of his mistress

Question 75

Which of the following best describes Participating Life Insurance policies?

a. Allow variation in the wording of certain provisions
b. Provide for the distribution of dividends to the policy owner
c. Develop profit which must be paid to stockholders
d. Permit beneficiaries to exercise certain ownership rights during the lifetime of the
insured

Answer 75

b. Provide for the distribution of dividends to the policy owner

Question 76

What is the commuted value of an insurance policy?

a. The cash value of basic addition
b. The single sum of money which is equal in value to the discounted future payments
c. The cash value of the policy after the loan has been deducted
d. The paid-up value of the policy

Answer 76

b. The single sum of money which is equal in value to the discounted future payments

Question 77

What is a policy that affords coverage for two or more persons simultaneously with the face
amount of the policy payable when any of the insured dies at which time the policy terminates
automatically?

a. Joint and Survivor Annuity
b. Double Duty Pesos Insurance
c. Joint Life Policy
d. Split Pesos Insurance Plan

Answer 77

c. Joint Life Policy

Question 78

Name the provision in a permanent life insurance policy under which, if the premium are
discontinued, full insurance coverage will be maintained for a specified period.

a. Paid-up insurance additions
b. Life income option pension
c. Reduced paid-up insurance
d. Extended term insurance

Answer 78

d. Extended term insurance

Question 79

The savings element of permanent plans allows for the build up of

a. Dividends
b. Cash values
c. Maturity benefits
d. Death benefits

Answer 79

b. Cash values

Question 80

To waive life insurance premiums under a typical waiver of premium for disability clause, the
disability of the insured person must be total, and which other condition?

a. It was expected to continue until death
b. It has continued for a specified period, such as six months
c. It has been caused by illness of a chronic nature, not accident
d. It has been caused by accident, not by illness of a chronic nature

Answer 80

b. It has continued for a specified period, such as six months

Question 81

Disability benefits are not paid

a. For self-inflicted injuries
b. If there is a loan against the policy
c. If all policy dividends have been withdrawn
d. If disability resulted from sickness only

Answer 81

a. For self-inflicted injuries

Question 82

Setting aside possible legal impediments, which option would you recommend if an
endowment policy owner, at age 65, tells you that he wants to provide his church with a
monthly donation for as long as the church exists?

a. Interest option
b. Life annuity option
c. Fixed income option
d. Periodic annuity option

Answer 82

a. Interest option

Question 83

A Family Income rider is specifically designed to ____.

a. Pay twice the face amount of the policy in the event of death.
b. Provide a monthly income from the date of death of the insured to some future date
specified in the contract
c. Provide an income for the adjustment period immediately following death
d. Provide a retirement income for the insured and his spouse

Answer 83

b. Provide a monthly income from the date of death of the insured to some future date
specified in the contract

Question 84

Nicole want to enhance her exiting policy by purchasing a separate provision coverage for a
different nature. What would you recommend to her?

a. Deposit privileges
b. Dividends
c. Riders
d. Assignment

Answer 84

c. Riders

Question 85

Applicants for life insurance with moderate physical impairments are called sub-standard risks
and ____.

a. Therefore cannot obtain life insurance in any company
b. May be insured at increased rates to compensate for the extra hazard
c. Are issued policies without any non-forfeiture values
d. Are required to pay premiums on an annual basis

Answer 85

b. May be insured at increased rates to compensate for the extra hazard

Question 86

Life insurance companies practice risk selection primarily to ____.

a. Guard against anti-selection
b. Establish dividend rates on participating policies
c. Determine policy reserve amount
d. Gather and test mortality statistics

Answer 86

a. Guard against anti-selection

Question 87

What is the legal consideration for the promise made by the insurance company in a life
insurance contract?

a. Payment of renewal premium
b. Approval by the underwriters
c. Establishment of the reserve
d. Payment of the initial premium

Answer 87

d. Payment of the initial premium

Question 88

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 an unhealthy working condition exposing the insured to elements
which can cause sickness
c. An occupation which exposes the insured to social hazards
d. All of the above

Answer 88

d. All of the above

Question 89

Which of the following is not true about insurance premiums?

a. The grace period is usually 31 days.
b. A premium is the legal consideration needed to effectuate a life insurance policy
c. Premiums which are paid quarterly or semi-annually are higher than those paid annually
d. Cash is required for all premiums paid in the grace period

Answer 89

d. Cash is required for all premiums paid in the grace period

Question 90

Which of the following determines the extent of medical evidence required?

a. Occupation of the applicant
b. The age of the applicant and the proposed sum to be insured
c. Date of the last medical examination
d. Financial condition of the applicant

Answer 90

b. The age of the applicant and the proposed sum to be insured

Question 91

Which of the following statements satisfies the requirement that the beneficiary should have
an insurable interest?

a. The insured and the beneficiary are engaged in a similar occupation
b. The insured belongs to the same club as the beneficiary
c. The insured is financially indebted to the beneficiary
d. The insured and the beneficiary regularly travel to and from work in a car pool
arrangement

Answer 91

c. The insured is financially indebted to the beneficiary

Question 92

Most life insurance agents are expressly authorized to perform the following functions:

a. Solicit application for insurance, accept the initial premium, and issue a receipt on
behalf of the insurance company
b. Solicit and approve the application of the proposed insured
c. Accept initial premium, and waive the insurable interest requirement
d. Appraise applicants, and decide on a standard or sub-standard rating

Answer 92

a. Solicit application for insurance, accept the initial premium, and issue a receipt on
behalf of the insurance company

Question 93

Helena owns a policy that is kept in force by paying the premiums on a semi-annual basis. If she
elected the non-forfeiture option. This means she ____.

a. Chooses a mode of settlement for the life proceeds
b. Discontinues premium payments for a whole life or endowment policy
c. Converts a term policy to a whole life policy
d. Renews a term life policy

Answer 93

b. Discontinues premium payments for a whole life or endowment policy

Question 94

In order for an assignment of a life insurance policy to be binding upon the company, ____.

a. It must be made in writing and filed with the company
b. It must be of the limited type
c. The company must be satisfied that it is justified
d. The company must certify to its validity

Answer 94

a. It must be made in writing and filed with the company

Question 95

Mr. Lorenzo and his primary beneficiary died in a common accident. It was established that the
primary beneficiary died before Mr. Lorenzo, and there are no contingent beneficiaries named.
To whom will the proceeds of Mr. Lorenzo’s life insurance policy be paid?

a. The estate of the primary beneficiary
b. The estate of the insured
c. Both the estates of the insured and primary beneficiary on a 50/50 percent basis
d. A court of law

Answer 95

b. The estate of the insured

Question 96

The life insurance business relies on the following, except:

a. The level of first year commission
b. Pressure selling
c. The use of effective needs selling
d. Agent’s service oriented attitude

Answer 96

b. Pressure selling

Question 97

Which of the following are requirements in reinstating a policy after it has lapsed for non-payment of premiums?

a. Payment of all overdue premiums
b. Application for reinstatement within the specified time
c. Evidence of insurability and payment of interest on overdue premiums
d. All of the above

Answer 97

d. All of the above

Question 98

What source of information will an insurance company not consider from a client pertaining to
insurability?

a. Medical examination report
b. Government tax records
c. Agent’s inspection report
d. The applicant’s personal appearance

Answer 98

b. Government tax records

Question 99

The grace period provision in life insurance policies is designed to ____.

a. Compel the insured to pay premiums more promptly
b. Permit the company to extra charges
c. Give the insured more time to pay the premium while coverage remains in-force
d. Terminate the contract of insurance automatically

Answer 99

c. Give the insured more time to pay the premium while coverage remains in-force

Question 100

In most cases, what will happen to a policy loan that has not been repaid at the time of the
insured’s death?

a. It will be charged to the person responsible for paying the debts of the insured.
b. It will be collected from the life insurance company’s reserve.
c. It will be written off against the insurance company under the terms of the premium
loan repayment option.
d. It will be deducted from the proceeds of the policy when the death claim is paid.

Answer 100

d. It will be deducted from the proceeds of the policy when the death claim is paid.

Question 101

The Insurance Code specifies that a contract does not take effect unless:

a. The policy is delivered to an insured, his assignee, agent, or beneficiary
b. Payment of the first premium is made to the insurer or its authorized agent
c. No change has taken place in the insurability of the life to be insured between the time
the application was completed and the time the policy was delivered
d. The insured has named no fewer than two beneficiaries in the policy

Answer 101

b. Payment of the first premium is made to the insurer or its authorized agent

Question 102

In personal accident and/or sickness contracts, what does “blanket policies” refer to?

a. Group insurance covering loss from specific hazards, incidental to or related to
particular activities
b. Insurance covering all hazards
c. Insurance for all types of hospital and health care expenses
d. None of the above

Answer 102

b. Insurance covering all hazards

Question 103

A man is about to retire. He has Ps. 100,000, which he wishes to use to provide income for
himself as long as he lives, and which would continue to his wife, as long as she lives after his
death. Which of the following will you sell him?

a. Retirement income endowment
b. Straight life annuity
c. Cash refund policy
d. Joint and survivorship annuity

Answer 103

d. Joint and survivorship annuity

Question 104

All of the following statements about Group Insurance are true, except:

a. Each covered employee receives a policy.
b. A covered employee who terminates his employment continues to be covered for 31
days after termination date.
c. In a non-contributory plan, 100% of the group members must be included.
d. Most group policies pay dividends to employer.

Answer 104

a. Each covered employee receives a policy.

Question 105

Daniel failed to disclose that he is already a high-risk candidate for high blood pressure during
the initial years of the policy. How will his contract be affected by such information?

a. Void from the beginning
b. Valid unless the insurer can prove fraud
c. Valid if the insurer issues a policy which is delivered to the applicant
d. Voidable by the insurer if it has been in force less than 2 years

Answer 105

d. Voidable by the insurer if it has been in force less than 2 years

Question 106

In developing a life insurance policy, the company must accumulate from premium payments
a fund required to meet the contract obligations. What is this fund?

a. Dividend fund
b. Policy reserve
c. Accrued discount
d. Contingency fund

Answer 106

b. Policy reserve

Question 107

What is Retirement Annuity?

a. An arrangement where a person can pay a Life Insurance Company a sun of money in
return for pension for life
b. A special kind of medical examination that has be to repeated every year
c. A kind of regular annual savings arrangement to provide a pension for life with no life
coverage
d. A one-time payment for a pension to start as a predetermined date

Answer 107

c. A kind of regular annual savings arrangement to provide a pension for life with no life
coverage

Question 108

Insurance companies which are owned by the policyowners are examples of

a. stock companies
b. mutual companies
c. family corporation
d. open-end companies

Answer 108

b. mutual companies

Question 109

An agent is prohibited from doing all of the following practices except to:

a. Alter an application without the applicant’s prior written approval
b. Convince a prospect to cancel his policy in one insurance company to buy a policy from
the insurance company represented by the agent
c. Refund some of his commission to his client
d. Make complete comparison of the policies he sells and those offered by competing
insurance companies

Answer 109

d. Make complete comparison of the policies he sells and those offered by competing
insurance companies

Question 110

Margaux is the beneficiary of her dad’s insurance policy. When it was time for her to make a
claim, she was offered different options, which of these settlement options does not apply to
her?

a. Payment of the proceeds over a fixed period
b. Payment of the proceeds in lump sum
c. Payment of the proceeds in fixed amounts until exhausted
d. Proceeds held by the company, with interest payable to the beneficiary on request

Answer 110

d. Proceeds held by the company, with interest payable to the beneficiary on request

Question 111

Neal and his wife have a whole life and endowment policies respectively, that is why they are
both assured that certain minimum policy benefits will remain with them even under certain
changed conditions. Which non-forfeiture provision holds true with the given situation?

a. Any guaranteed policy values will belong to the policy owner even if premium payments
are discontinued
b. No death claim will be denied for any misstatement on the application
c. The premium on the policy will remain the same even when another beneficiary is
added to the policy
d. The face amount of the policy will remain the same even if the insured’s health becomes
impaired

Answer 111

a. Any guaranteed policy values will belong to the policy owner even if premium payments
are discontinued

Question 112

In determining the number of people dying or living at a particular age within a given period,
which principle do we use?

a. Probability
b. Insurable Interest
c. Mortality Table
d. Risk Sharing

Answer 112

a. Probability

Question 113

Simon named his mother as primary beneficiary and his brother as secondary revocable
beneficiary for his Ps. 20,000 policy. Which of the following applies to this situation?

a. Upon the insured’s death, the primary and secondary beneficiaries shall each receive
Ps. 10,000
b. The designation of a contingent beneficiary is subject to the primary beneficiary’s
approval
c. Any policy loan assignment will require the primary beneficiary’s approval
d. The insured can add a third beneficiary at any time

Answer 113

d. The insured can add a third beneficiary at any time

Question 114

What is the restriction when the death benefit of a policy is restricted in amount during the
early years of the policy?

a. Rate adjustment
b. An increasing death benefit
c. A lien
d. A subtractive clause

Answer 114

a. Rate adjustment

Question 115

When does the insured person receive the full face amount himself?

a. When he becomes 65 years old in the case of a whole life policy
b. On the date of maturity in the case of endowment policy
c. Only if he lives to 100 years old in the case of an endowment
d. When he becomes 65 years old in the case of limited pay life

Answer 115

b. On the date of maturity in the case of endowment policy

Question 116

All of the following statement regarding a life insurance application are correct, except:

a. Misstatement of material facts could void the policy during the contestable period
b. It must be signed by the applicant
c. Usually, it will be made a part of the policy
d. Statements made on the application are warranties

Answer 116

d. Statements made on the application are warranties

Question 117

117. All of the following are Standard Provision of a life insurance policy, except:

a. A misstatement of age clause
b. A grace period clause
c. An automatic premium loan clause
d. An entire contract clause

Answer 117

d. An entire contract clause

Question 118

If a policyholder wants to get the maximum immediate value from non-participating policy by
surrendering it, which of the following would he get?

a. Cash value
b. Loan value
c. Extended term insurance
d. Accumulated dividend

Answer 118

a. Cash value

Question 119

The premium on a participating life insurance policy is ___.

a. The same as an non-participating policy
b. Greater at younger ages
c. Lower than a non-participating policy
d. Higher than a non-participating policy

Answer 119

d. Higher than a non-participating policy

Question 120

In a case where the premium has not been paid and the cash value has been exhausted,
which of the following can the policy still avail of?

a. Automatic premium loan provision
b. Reinstatement provision
c. Extended term insurance
d. Grace period

Answer 120

b. Reinstatement provision

Question 121

A prospect tells you that he wants to be insured for life at the least annual cost until he dies.
What would you offer him?

a. A 20-pay life policy
b. A whole life policy
c. A term policy
d. Endowment policy

Answer 121

b. A whole life policy

Question 122

You visit a prospect who tells you that he does not believe in life insurance because, when his
mother died, he was the beneficiary under her life policy. Most of the money were used to
pay Estate Taxes because her agent made a mistake. Only this man and his sister were named
in the policy. Which of the following did they fall under?

a. Absolute assignee
b. Irrevocable primary beneficiary
c. Revocable secondary beneficiary
d. Revocable primary beneficiary

Answer 122

d. Revocable primary beneficiary

Question 123

All of the following apply under the beneficiary provision, except:

a. An irrevocable beneficiary’s interest is very similar to that of an absolute assignee
b. The beneficiary must notify the company of the insured’s death within 24 hours
c. The beneficiary can only receive the policy proceeds if he alive at the time of the
insured’s death
d. The interest of a contingent beneficiary remains inoperative during the lifetime of the
insured

Answer 123

b. The beneficiary must notify the company of the insured’s death within 24 hours

Question 124

In theory, endowment insurance is a combination of what?

a. Level term and whole life
b. Level term and pure endowment
c. Increasing term and whole insurance
d. Increasing term and decreasing whole life

Answer 124

b. Level term and pure endowment

Question 125

Paid-up additions options is one of the following features available in a participating policy.
Which of the following is true about paid-up additions?

a. Don’t affect the cash value of the policy
b. Don’t affect the loan or cash value of the policy
c. Affect both cash and loan value of the policy
d. Only affect the cash value of the policy

Answer 125

c. Affect both cash and loan value of the policy

Question 126

A misrepresentation in the application form is considered to be material if ____.

a. The insurance company would have altered its risk appraisal decision had the truth been
known.
b. The Insurance Commission disregard the misrepresentation.
c. The insured died during the contestable period.
d. The misrepresentation is subsequently discovered by the insurance company.

Answer 126

a. The insurance company would have altered its risk appraisal decision had the truth been
known.

Question 127

Harry made a policy loan to pay for the tuition fees of his children. After a year, he is still
unable to pay for the loan. What will the insurance company do?

a. Increase the present loan by the interest
b. Demand full settlement of the loan
c. Refuse to grant future additional loan
d. Terminate the contract

Answer 127

a. Increase the present loan by the interest

Question 128

The company uses the information on a life insurance application relating to an applicant’s
birthday, occupation, and avocation primarily for what purpose?

a. Appraising the risk
b. Assigning the risk
c. Determining the insurable interest
d. Determining a suitable plan of insurance

Answer 128

a. Appraising the risk

Question 129

A client has a policy with you for Ps 1,000,000, which is payable to his estate, and he tells you
that he wants his wife to receive the money free from Estate Tax. What would you
recommend?

a. Appoint an irrevocable beneficiary
b. Take a new policy with the bank as a third party
c. Make an absolute assignment
d. Make a collateral assignment

Answer 129

a. Appoint an irrevocable beneficiary

Question 130

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

Answer 130

b. Automatic premium loan

Question 131

Most binding receipts have the following provision, except:

a. An acknowledgement of the receipt of the initial contractual premium
b. A minimum amount of coverage
c. The right of the company to terminate the initial coverage if the application is
disapproved by the company
d. There is a confirmation of payment

Answer 131

b. A minimum amount of coverage

Question 132

Non-productive agents in a company affect

a. Investment yield
b. Risk sharing
c. Expense
d. Profit allowance

Answer 132

c. Expense

Question 133

A housewife without gainful employment applies for Ps 500,000 life coverage. Which of the
following should the agent do?

a. Suggest she doubles the amount
b. Tell her she has no need for it
c. Be grateful
d. Examine the adequacy of the husband’s insurance coverage

Answer 133

d. Examine the adequacy of the husband’s insurance coverage

Question 134

An individual, at age 35, purchases a policy under which he, in 20 years, will receive the face
amount of the policy himself, if he is alive at that date. This policy is obviously a ____.

a. 20-pay life
b. 20-year endowment
c. 20-year term
d. None of the above

Answer 134

b. 20-year endowment

Question 135

One supplementary benefit offered is a payor’s benefit, which is intended to ____.

a. Provide a waiver pf premium benefit in the event of death or disability of the person
paying the premiums
b. Provide for the returns of premiums to an adult payer in the event that a minor insured
dies
c. Assure that the adult payor will retain a vested interest in the policy when the insured
reaches the age of majority
d. Allow the insurance company to pay the policy’s proceeds to the person who seems
equitably entitled to the proceeds

Answer 135

a. Provide a waiver pf premium benefit in the event of death or disability of the person
paying the premiums

Question 136

Because the renewal of a term life insurance policy presents an increased possibility of anti-selection, it is customary for the insurance company to ____.

a. Require some evidence of insurability each time that policy is renewed
b. Charge higher premium rates for term policies that are renewable than those that are
not renewable
c. Restrict the policy owner’s right to change the beneficiary of a renewable term policy
d. Define insurable interest more strictly for term policies than for other policies

Answer 136

b. Charge higher premium rates for term policies that are renewable than those that are
not renewable

Question 137

When the beneficiary of a life insurance policy has been designated irrevocably, the policy
owner must obtain the consent of the beneficiary in order to:
I. Name a different person to receive policy benefits
II. Obtain a loan under the policy
III. Surrender the policy for its cash value
IV. Elects the extended term non-forfeiture option

a. All of these
b. I, III, and IV
c. I, II, and III
d. II, III, and IV

Answer 137

a. All of these

Question 138

Mr. Kho’s participating whole life insurance policy includes a waiver of premium for disability
benefit. During the period when premium payments are being waived under this provision,
the cash value of this policy will ____.

a. Remain the same, and Mr. Kho will continue to receive policy dividends
b. Decrease, but Mr. Kho will continue to receive policy dividends
c. Stop increasing for the term of the rider
d. Increase, and Mr. Kho will continue to receive policy dividends

Answer 138

d. Increase, and Mr. Kho will continue to receive policy dividends

Question 139

Anti-Selection refers to a general tendency on the part of ____.

a. Agency managers to discriminate between loyal agents and disloyal agents
b. Applicants for life insurance to opt for inexpensive plans of insurance
c. Persons with impaired insurability to be more keen in obtaining insurance coverage than
those persons who are in good health
d. Agents to call those prospects who state no obligations to life insurance

Answer 139

c. Persons with impaired insurability to be more keen in obtaining insurance coverage than
those persons who are in good health

Question 140

The basic coverage provided by life insurance policies may be supplemented by separate
provisions that provide coverage for additional amounts or of a different nature. Collectively,
these provisions are known as ____.

a. Riders
b. Dividends
c. Assignment
d. Deposit privileges

Answer 140

a. Riders

Question 141

What is a policy that is in force for less than the original sum assured with no indebtedness
has availed of?

a. The Reinstatement Provision
b. Grace Period
c. Paid-Up Insurance Option
d. Cancellation

Answer 141

c. Paid-Up Insurance Option

Question 142

Philip bought a policy on the life of his wife and was not able to clarify to the insurance
company that his wife was a year older when they bought their life insurance policy. What
will the insurance company pay in case his wife dies?

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

Answer 142

b. Slightly less than the face amount

Question 143

A policy is approved with this rating when the insured has a higher than average chance of
dying prematurely due to varying degrees of impairments.

a. Standard Rate
b. Substandard Rate
c. Decline
d. Postpone

Answer 143

b. Substandard Rate

Question 144

John is young professional who loves sports. He engages in combat sports such as Kickboxing
and MMA on his leisure time as his fitness routine. He tries to keep himself fit and does not
take on any vices except for occasional drinks with friends. What could be his rating should he
apply for a life insurance?

a. Standard Rate
b. Substandard Rate
c. Decline
d. Postponed

Answer 144

b. Substandard Rate

Question 145

Mr. Sanchez has been with his partner for more 20 years, since he and his wife separated.
Though he and his wife had remained friends, they agreed that they would no longer have
interest in each other’s assets after the separation. With this, Mr. Sanchez wishes to name
his long-time partner to be his beneficiary. Can he do this?

a. Yes, because he has been together for so long.
b. Yes, because Mr. Sanchez and his wife has already agreed not to make any claim should
anything happen
c. No, because common-law spouse may not be nominated as beneficiary as per Philippine
Law
d. No, because they don’t have children

Answer 145

c. No, because common-law spouse may not be nominated as beneficiary as per Philippine
Law

Question 146

In the event of an insured death, his common-law spouse filed for claim to his insurance.
Since they were never married because of the insured’s previous marriage, the common-law
spouse’s claim was denied. His parents were nominated as his beneficiary, but the insured
outlived them. Where will the insured’s insurance proceeds go?

a. To his siblings
b. To his legal wife
c. To the insured’s estate
d. To the state

Answer 146

c. To the insured’s estate

Question 147

What does a person have when he, the beneficiary, suffers financial loss caused by the death
of the insured?

a. Anti-selection
b. Speculation
c. Insurable Interest
d. Qualification

Answer 147

c. Insurable Interest

Question 148

Sancho and Bong have been business partners for 5 years. Last year, they decided to set up
a convenience store together. Can Sancho nominate Bong as his beneficiary when he applies
for a policy?

a. Yes, because they are living together. They are common-law partners.
b. Yes, because they are business partners, but Bong should also have a cross-insurance
naming Sancho as his beneficiary.
c. No, because Philippine law does not recognize same-sex relationships and marriages.
d. No, because they are not technically related.

Answer 148

b. Yes, because they are business partners, but Bong should also have a cross-insurance
naming Sancho as his beneficiary.

Question 149

This type of life insurance provides lifetime protection with premiums payable in limited
number of years, with cash values, and dividends. The face amount is paid when the insured
dies, or reaches the age of 100, whichever comes first.

a. Level Term Plan
b. Regular Whole Life Plan
c. Limited Pay Life Plan
d. Regular Endowment Plan

Answer 149

c. Limited Pay Life Plan

Question 150

Which of the following provides protection in a specified period, and pays only the face
amount in the event of death.

a. Limited Pay Life Plan
b. Term Plan
c. Whole Life Plan
d. Endowment Plan

Answer 150

b. Term Plan

Question 151

What increases yearly which is based on the insured’s attained age?

a. Natural Premium
b. Level Premium
c. Death Benefit
d. Living Benefit

Answer 151

a. Natural Premium

Question 152

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

Answer 152

b. under which only one premium payment is required

Question 153

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

Answer 153

a. Policy fee

Question 154

To be able to calculate the required premiums for a given policy, the agent must know the
applicants

a. Age
b. choice of plan
c. face amount desired
d. all of the above

Answer 154

d. all of the above

Question 155

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 payment desired
c. multiplied by a conversion factor for the mode of payment desired
d. multiplied by a constant conversion factor

Answer 155

c. multiplied by a conversion factor for the mode of payment desired

Question 156

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

Answer 156

d. all of the above

Question 157

With employer-employee groups, an employee does not fill out personal application for
insurance. Instead he merely fills out

a. An enrollment card
b. A registration card
c. A certificate of insurance coverage
d. A salary deduction form

Answer 157

a. An enrollment card

Question 158

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 individual policy using the

a. Policy exchange facility
b. Conversion privilege
c. Change of plan provision
d. Policy change form

Answer 158

b. Conversion privilege

Question 159

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 be above 21
d. Parties to the contract must possess blood relationship

Answer 159

b. Parties to the contract must be legally competent

Question 160

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

Answer 160

d. Applicant-owner

Question 161

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

Answer 161

c. Someone who owes you money

Question 162

Under the law pertaining to life insurance

a. Only the 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

Answer 162

d. Any person with insurable interest can be named irrevocable beneficiaries

Question 163

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

Answer 163

b. Income tax is levied on the interest earnings of the proceeds

Question 164

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, or from whom he is
receiving support or education
c. Any person in whom he has pecuniary interest
d. All of the above

Answer 164

d. All of the above

Question 165

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

Answer 165

c. Those expressly prohibited by law to receive donations

Question 166

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

Answer 166

d. When the agent gives a binding receipt

Question 167

The parties involved in life insurance contract are the

a. Insurance company and agent
b. Insurance company and insured
c. Agent and insured
d. Insured and beneficiary

Answer 167

b. Insurance company and insured

Question 168

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 immoral relationship
d. All of the above

Answer 168

b. If his/her legal partner is still living and the previous marriage has not been legally
dissolved

Question 169

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

Answer 169

c. Pay the face amount

Question 170

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

Answer 170

c. Taking a policy loan

Question 171

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

Answer 171

a. That they are not guaranteed

Question 172

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. Allow the policy owner a three-month extension beyond the due date to make the late
premium payment without penalty
d. None of the above

Answer 172

d. None of the above

Question 173

Automatic premium loan differs from the other policy loans in that an automatic premium
loan

a. Need not be repaid by the policy owner
b. Must be repaid during the policy year in which it is granted
c. Goes into effect requiring no separate action from the policy owner
d. Involves higher interest payments because of the greater cost of administration

Answer 173

c. Goes into effect requiring no separate action from the policy owner

Question 174

When a policy is assigned absolutely

a. The assignee acquires all the rights and interests 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

Answer 174

a. The assignee acquires all the rights and interests of the original policyholder

Question 175

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 and sisters
d. The insured estate

Answer 175

d. The insured estate

Question 176

If the 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 grace period

Answer 176

d. Continue in full force for a grace period

Question 177

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

Answer 177

d. Have the wife’s consent

Question 178

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

Answer 178

b. Any verbal statement made by the agent to the applicant

Question 179

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 in a reduced rate
c. Unaffected
d. Increased

Answer 179

c. Unaffected

Question 180

Interest is charged on policy loans

a. For registered policies only
b. If the loan 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

Answer 180

c. To replace investment income the insurer cannot earn since a loan has been granted

Question 181

An insurance plan which offers both protection and savings is called

a. Temporary plan
b. Permanent plan
c. Participating plan
d. Non-participating plan

Answer 181

b. Permanent plan

Question 182

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

Answer 182

c. Term insurance

Question 183

Mr. Juan Valdez wants a policy which will entitle him to receive dividends yearly. What will
you recommend to Mr. Valdez?

a. Participating plan
b. Non-participating Plans
c. Term insurance
d. None of the above

Answer 183

a. Participating plan

Question 184

Which of the following can give the longest protection?

a. 20 yr. Endowment
b. Endowment at 65
c. Ordinary life
d. 20 yr term

Answer 184

c. Ordinary life

Question 185

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

Answer 185

a. Protection is until age 100, payment of premium is for 20 years

Question 186

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

Answer 186

b. Dividends

Question 187

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. Decreasing term
d. Level Term

Answer 187

d. Level Term

Question 188

Two attractive features of a term insurance are:

a. Convertibility and cash values
b. Cash values and dividends
c. Protection and dividends
d. Convertibility and renewability

Answer 188

d. Convertibility and renewability

Question 189

A term insurance which allows the policyowners to convert it to a permanent insurance
within a specified period without evidence of insurability contains__________feature:

a. Convertibility
b. Renewability
c. Dividend option
d. Both a & b

Answer 189

a. Convertibility

Question 190

A term policy only offers

a. Cash values
b. Protection
c. Savings
d. Dividends

Answer 190

b. Protection

Question 191

The main difference between a term plan and a permanent plan is

a. Permanent plans provide both protection and savings while term plans offer protection
only
b. Permanent plans provide 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

Answer 191

a. Permanent plans provide both protection and savings while term plans offer protection
only

Question 192

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

Answer 192

d. A term insurance added to a permanent plan

Question 193

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

Answer 193

c. Waiver of premium

Question 194

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

Answer 194

a. The accidental death rider ceases

Question 195

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. Receive the total disability income benefit and the waiver of premium
b. Receive partial disability benefits
c. Be granted the waiver of premiums
d. Receive neither disability income nor waiver of premiums

Answer 195

d. Receive neither disability income nor waiver of premiums

Question 196

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

Answer 196

b. Term insurance rider

Question 197

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

Answer 197

c. Continue as if the owner is paying the premium

Question 198

A policy with a minor as the proposed insured is called

a. Rated policy
b. Juvenile policy
c. Regular policy
d. Substandard policy

Answer 198

b. Juvenile policy

Question 199

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

Answer 199

a. Rated policies

Question 200

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

Answer 200

c. Income

Question 201

Anti-selection occurs

a. When an agent thinks only of his own interest and not of his policyowners
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

Answer 201

d. When persons in poor health wish to buy insurance

Question 202

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

Answer 202

b. Hazard on people’s lives

Question 203

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

Answer 203

d. All of the above

Question 204

In insurance risks are classified as

a. Unacceptable and acceptable
b. Regular and irregular
c. Standard, substandard and declined
d. Complete and incomplete

Answer 204

c. Standard, substandard and declined

Question 205

Statement in the application forms are

a. Guarantees
b. Representation
c. Warranties
d. None of the above

Answer 205

b. Representation

Question 206

Mr. Roel Reyes has been confined in a hospital for 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

Answer 206

c. Name of doctor only

Question 207

Insurance companies have a source of confidential medical information on applicants for life
insurance. This is the

a. Agents confidential report bureau
b. Inspection reports bureau
c. Financial standing bureau
d. Medical impairment bureau

Answer 207

d. Medical impairment bureau

Question 208

An agent is filling up the Agent’s Confidential Report. What information must be 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

Answer 208

c. All information he knows which are material to the application for insurance

Question 209

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

Answer 209

d. is a purchase of income

Question 210

The person who purchases the annuity plan is

called the
a. assignor
b. owner
c. insured
d. annuitant

Answer 210

d. annuitant

Question 211

A life insurance company earns income from two main sources

a. premium income and investment income
b. mortgage income and premium income
c. dividend income and premium income
d. dividend income and interest income
e. mortgage income and dividend income

Answer 211

a. premium income and investment income

Question 212

Policy reserves are future obligations on the part of

a. the insurance commission
b. the insurance company
c. the beneficiary
d. the policyowner

Answer 212

b. the insurance company

Question 213

Stock companies are owned by

a. policyowners
b. stockholders
c. creditors
d. government

Answer 213

b. stockholders

Question 214

In the case of life insurance, a sale is considered completed if the application 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
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

Answer 214

a. a medical examination has to be made first

Question 215

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
c. To avoid the necessity of the insurer putting all relevant details in the contract
d. None of the above

Answer 215

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

Question 216

Which one of the following statements is correct?

a. Advertising by life insurance agents is prohibited
b. All information about a client or a prospective client has to be treated as confidential
c. The agents 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 to the press, he is not allowed to state the name
of his company

Answer 216

b. All information about a client or a prospective client has to be treated as confidential

Question 217

Prior to granting a license, the IC requires proof of

a. A clean record of employment
b. A reasonable educational background
c. A prospective agent’s character and reputation
d. All of the above

Answer 217

d. All of the above

Question 218

The IC has the power to adjudicate insurance claims against companies for any single claim
not exceeding

a. 1,000,000.00
b. 250,000.00
c. 100,000.00
d. 500,000.00

Answer 218

c. 100,000.00

Question 219

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 lifetime of the agent
d. An insurance agent’s license will be renewed when the corresponding application and
fee are received by the insurance commissioner

Answer 219

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

Question 220

The insurance industry is under government regulations because

a. It is required to account for the money spent in company operations
b. It pays high taxes
c. It affects public interest
d. It is a charitable institution

Answer 220

c. It affects public interest

Question 221

Which one of the following statements is correct?

a. An agent is allowed to share commissions when selling a whole life policy but not 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 commission with any other person is called twisting
d. An agent is not allowed to share commissions with any person

Answer 221

b. An agent is allowed to share commissions with another licensed agent or agents but
with no one else

Question 222

Which one of the following statements 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 identify on his letterhead 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 premiums by an insurance agent is prohibited

Answer 222

d. Rebating of premiums by an insurance agent is prohibited

Question 223

Persuading a policyowner, 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. Twisting
c. Knocking
d. Discounting

Answer 223

b. Twisting

Question 224

Rebating is

a. Dating the policy a month in advance
b. Giving false information
c. Twisting
d. Premium discrimination against policyholders

Answer 224

d. Premium discrimination against policyholders

Question 225

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

Answer 225

d. Any or all of the above

Question 226

One example covered under the ethical practices and procedures is

a. Keep all policyholders information confidential
b. Always recommend a will
c. Never drink in front of client
d. Offer to pay the first premium with the application for insurance in behalf of the client

Answer 226

a. Keep all policyholders information confidential

Question 227

The term knocking means

a. Promising to pay 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

Answer 227

b. Making derogatory remarks about competing underwriters or companies

Question 228

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 thereon
b. Inducing a policyholder to lapse, forfeit or surrender a policy he holds for another
company
c. Misrepresenting the terms of any policy issued by any insurance company or the
benefits or advantages promised thereon
d. Obtaining or attempting to obtain a license by fraud or misrepresentation

Answer 228

d. Obtaining or attempting to obtain a license by fraud or misrepresentation

Question 229

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

Answer 229

b. The replacement of a policy in one company with another policy in another company

Question 230

The misstatement of 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

Answer 230

c. Misrepresentation

Question 231

Selling a person more insurance than what is warranted by his sources is called

a. Overloading
b. Twisting
c. Rebating
d. Knocking

Answer 231

a. Overloading

Question 232

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 policyholder
c. Is an offense in the great majority of cases
d. Is a matter left entirely to the discretion of the agent

Answer 232

c. Is an offense in the great majority of cases

Question 233

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

Answer 233

c. The first 2 years

Question 234

The three non-forfeiture values in a permanent policy are

a. Cash dividends, bonus additions and 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

Answer 234

d. Cash surrender value, paid value, extended term insurance

Question 235

In the event that a policy elects the paid-up insurance option

a. The premiums stop and the policy continues for the full face amount until age 65
b. The premiums cease and protection continues with a reduced amount of coverage
c. The insurance continues with a reduced amount and a reduced premium
d. The policy will automatically terminate

Answer 235

b. The premiums cease and protection continues with a reduced amount of coverage

Question 236

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 changed
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 it

Answer 236

c. The amount of insurance is adjusted to the amount which the premium paid at the
correct age would have purchased

Question 237

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

Answer 237

c. Dividends

Question 238

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 beneficiary 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

Answer 238

a. Paid the amount of insurance payable to his beneficiary reduced in relation to his actual
age at the time the contract was signed

Question 239

If a policyowner 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

Answer 239

c. The company would be liable for the payment of the premiums paid by the insured only

Question 240

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

Answer 240

c. Extended term insurance

Question 241

Any policy which has lapsed can be reinstated subject to normal conditions of proof of
insurability within

a. Three years
b. Six months
c. One year
d. Two years

Answer 241

a. Three years

Question 242

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

Answer 242

c. A cooperative risk sharing plan

Question 243

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 to be charged is
the

a. Life agent
b. Senior statistician
c. Insurance commissioner
d. Actuary

Answer 243

d. Actuary

Question 244

Since the purchase of life insurance is a voluntary choice the individual must meet

a. A comprehensive inspection
b. Certain standards of health and occupation
c. A satisfactory medical examination
d. A minimum income figure

Answer 244

b. Certain standards of health and occupation

Question 245

The fundamental advantage of the use of insurance as means of meeting economic losses is
that through insurance these losses are

a. Spread over a large number of people
b. Deferred for a specified period of time
c. Reduced for the group as a whole through the multiplier effect
d. Met as they arise through savings accumulated on an assessment basis

Answer 245

a. Spread over a large number of people

Question 246

The term loading means

a. The difference between the gross and net premiums for the purpose of paying the
insurance overhead expenses including commissions and taxes
b. The amount which the company will lend to the policyholder 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 the above

Answer 246

a. The difference between the gross and net premiums for the purpose of paying the
insurance overhead expenses including commissions and taxes

Question 247

Life insurance can provide money when income stops because of

a. Disability
b. Death
c. Retirement
d. All of the above

Answer 247

d. All of the above

Question 248

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

Answer 248

a. Mortality experience, investment earnings and operating expenses

Question 249

The number of years that persons 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

Answer 249

d. Life expectancy

Question 250

Part of the premium paid by a policyholder is invested by the insurance company. In
premium computation, this factor is known as

a. Interest
b. Investment
c. Loading
d. Mortality

Answer 250

a. Interest