TRAD Reviewer (Set B)

Question 1

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 1

a. Guard against anti-selection

Question 2

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 2

d. Payment of the initial premium

Question 3

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 3

d. All of the above

Question 4

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 4

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

Question 5

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 5

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

Question 6

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 6

c. The insured is financially indebted to the beneficiary

Question 7

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 7

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

Question 8

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 8

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

Question 9

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 9

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

Question 10

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 10

b. The estate of the insured

Question 11

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 11

b. Pressure selling

Question 12

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 12

d. All of the above

Question 13

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 13

b. Government tax records

Question 14

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 14

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

Question 15

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 15

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

Question 16

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 16

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

Question 17

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 17

b. Insurance covering all hazards

Question 18

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 18

d. Joint and survivorship annuity

Question 19

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 19

a. Each covered employee receives a policy.

Question 20

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 20

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

Question 21

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 21

b. Policy reserve

Question 22

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 22

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

Question 23

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 23

b. mutual companies

Question 24

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 24

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

Question 25

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 25

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

Question 26

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 26

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

Question 27

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 27

a. Probability

Question 28

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 28

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

Question 29

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 29

a. Rate adjustment

Question 30

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 30

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

Question 31

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 31

d. Statements made on the application are warranties

Question 32

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 32

d. An entire contract clause

Question 33

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 33

a. Cash value

Question 34

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 34

d. Higher than a non-participating policy

Question 35

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 35

b. Reinstatement provision

Question 36

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 36

b. A whole life policy

Question 37

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 37

d. Revocable primary beneficiary

Question 38

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 38

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

Question 39

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 39

b. Level term and pure endowment

Question 40

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 40

c. Affect both cash and loan value of the policy

Question 41

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 41

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

Question 42

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 42

a. Increase the present loan by the interest

Question 43

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 43

a. Appraising the risk

Question 44

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 44

a. Appoint an irrevocable beneficiary

Question 45

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 45

d. Reinstatement Provision

Question 46

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 46

b. A minimum amount of coverage

Question 47

Non-productive agents in a company affect

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

Answer 47

c. Expense

Question 48

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 48

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

Question 49

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 49

b. 20-year endowment

Question 50

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 50

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

Question 51

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 51

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

Question 52

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 52

a. All of these

Question 53

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 53

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

Question 54

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 54

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

Question 55

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 55

a. Riders

Question 56

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 56

c. Paid-Up Insurance Option

Question 57

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 57

b. Slightly less than the face amount

Question 58

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 58

b. Substandard Rate

Question 59

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 59

b. Substandard Rate

Question 60

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 60

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

Question 61

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 61

c. To the insured’s estate

Question 62

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 62

c. Insurable Interest

Question 63

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 63

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

Question 64

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 64

c. Limited Pay Life Plan

Question 65

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 65

b. Term Plan

Question 66

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 66

a. Natural Premium

Question 67

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 67

b. under which only one premium payment is required

Question 68

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 68

a. Policy fee

Question 69

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 69

d. all of the above

Question 70

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 70

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

Question 71

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 71

d. all of the above

Question 72

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 72

a. An enrollment card

Question 73

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 73

b. Conversion privilege

Question 74

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 74

b. Parties to the contract must be legally competent

Question 75

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 75

d. Applicant-owner

Question 76

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 76

a. Children by former marriage

Question 77

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 77

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

Question 78

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 78

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

Question 79

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 79

d. All of the above

Question 80

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 80

c. Those expressly prohibited by law to receive donations

Question 81

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 81

c. In accordance with the legal stipulation of the Insurance Code

Question 82

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 82

b. Insurance company and insured

Question 83

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 83

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

Question 84

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 84

c. Pay the face amount

Question 85

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 85

c. Taking a policy loan