MOCK TEST (TRAD 1)

Question 1

If the interest on a policy loan is not paid at the policy anniversary, the insurance company may

Answer 1

Increase the present loan by the interest

Question 2

The extent of the medical evidence required is determined by

Answer 2

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

Question 3

Indicate which of the following is not a function of an application for life insurance policy

Answer 3

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

Question 4

The insurance companies make use of the laws of probability in order to

Answer 4

Estimate future death rates among members of a given group

Question 5

Insurance premiums is NOT

Answer 5

Cash is required for all premiums paid in the grace period

Question 6

insurance premiums are

Answer 6

A premium is the legal consideration needed to effectuate a life insurance policy.

The grace period is usually 31 days.

Premiums which are paid quarterly or semi-annually are higher than those paid annually.

Question 7

Endowment life insurance and term life insurance are similar in that both plans

Answer 7

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

Question 8

A non-forfeiture option would ordinarily be selected at the time a policy owner

Answer 8

Discontinues premium payments for a whole life or endowment policy

Question 9

The conservation of a life insurance policy is dependent are

Answer 9

The level of first year commission

Agent’s service oriented attitude

The use of effective needs selling

Question 10

The conservation of a life insurance policy is dependent are NOT

Answer 10

Pressure selling

Question 11

Purchasing a continuous-premium, whole life policy rather than a limited-payment whole life policy, gives the policy owner the advantage of

Answer 11

More insurance protection for the same annual premiums outlay

Question 12

Name the provision in a permanent life insurance policy under which premiums are discontinued, full insurance will be maintained for a specified period:

Answer 12

Extended term insurance

Question 13

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

Answer 13

Riders

Question 14

The insured named a primary and secondary revocable beneficiary for P20,000 policy. The insured can ______________ __?

Answer 14

add a third beneficiary at any time

Question 15

In a policy where an irrevocable beneficiary has been designated the insured, without the beneficiary’s permission, can_____________________.

Answer 15

Discontinue premium payments

Question 16

An agent who determines a prospect’s complete financial requirements preparatory to offering him a policy using the correct approach known as

Answer 16

Total needs selling

Question 17

TRUE OR FALSE?

Because of its very short duration the cash value of a yearly renewable term policy grows very fast

Answer 17

FALSE

Question 18

TRUE OR FALSE?

The cash value of a whole life policy builds up at a slower rate than for a 20 year endowment

Answer 18

TRUE

Question 19

TRUE OR FALSE?

The cash value in a permanent policy is guaranteed by the company

Answer 19

TRUE

Question 20

TRUE OR FALSE?

The cash value of an endowment builds up faster than that for a limited pay life policy of the same duration

Answer 20

TRUE

Question 21

Which of the following does not have a legitimate insurable interest?
a. An individual on the life of his mistress
b. An individual on his own life
c. An individual on the life of his spouse
d. A finance company on the life of its borrower

Answer 21

a. An individual on the life of his mistress

Question 22

An _____________does not have a legitimate insurable interest

Answer 22

individual on the life of his mistress

Question 23

Which of the following is the least important reason for requiring that insurance agents be licensed?

a. To establish and maintain high professional and ethical standard

b. To protect the public

c. To give the government adequate control over the conduct of agents

d. To provide additional income to the government through license fees

Answer 23

d. To provide additional income to the government through license fees

Question 24

What is the least important reason for requiring that insurance agents be licensed?

Answer 24

To provide additional income to the government through license fees

Question 25

A yearly renewable term life insurance policy generally specifies that____

Answer 25

Premiums shall increase every time the policy is renewed

Question 26

A yearly renewable term life insurance policy generally specifies that a. The policy owner may renew the policy only once b. Premiums shall increase every time the policy is renewed c. Evidence of insurability shall be required every renewal d. Cash values will increase for as long as the policy is in force

Answer 26

b. Premiums shall increase every time the policy is renewed

Question 27

If the interest on a policy loan is not paid at the policy anniversary the insurance company may

Answer 27

Increase the present loan by the interest

Question 28

The incontestability clause

Answer 28

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

Question 29

Non-forfeiture provisions are included in whole life and endowment policies to assure the policy owner that certain minimum policy benefits shall remain with him even under certain changed conditions. Non-forfeiture values guarantee to the policy owner that_____.

Answer 29

Any quaranteed policy values will belong to the policy owner even if premium payments are discontinued

Question 30

In the case of renewable term insurance, the policy owner may

Answer 30

Renew the coverage based on a higher premium

Question 31

When you bought an insurance policy on your wife's life, you were 27 and she was 26, but you stated that you were 26 and she was 27. Five years later your wife died. The insurer will pay

Answer 31

The face amount adjusted for misstatement of age

Question 32

Both endowment and term life insurance policies provide that____?

Answer 32

Insurance protection will be limited to a specified period

Question 33

All of the following are sources of information to an insurance company pertaining to the insurability of an applicant except

Answer 33

Government tax records

Question 34

An insurance company generally has the right to rescind a life insurance policy if

Answer 34

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

Question 35

In most life insurance applications, the largest amount of information requested is data which

Answer 35

Relates to the insurability of the applicant

Question 36

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

Answer 36

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

Question 37

A father has his present life insurance payable to his estate and because he has now retired, he wants to pass the policy on to his son who will assume the premium payments. Which of the following will he have to appoint his son to achieve his desire and protect the son from Estate Tax Liability?

Answer 37

Absolute assignee

Question 38

What are the basic settlement options?

Answer 38

Filed amount, fixed period, life income, interest on deposit

Question 39

Notwithstanding possible legal impediments, if the owner of an endowment at age 65 policy tells you that at the maturity of the policy he wants to provide his church with a monthly donation for as long as the church exists. Which option do you recommend?

Answer 39

Interest option

Question 40

A policy which permits the policy holder to vary the level of premium or the sum insured, and has its cash values dependent upon the investment performance and the level of premium paid is known as___________________ policy.

Answer 40

Universal life

Question 41

Disability Waiver of Premium Rider are NOT

Answer 41

The insured has to die while disabled

Question 42

If the applicant for life insurance fails to disclose or misrepresents a material fact, the contract is___________.

Answer 42

Valid unless the insurer can prove fraud

Question 43

A man applied for a P20,000 whole life policy and paid the full initial premium to the soliciting agent. The agent issued a binding receipt. Under such a receipt, the insurance company ____________.

Answer 43

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

Question 44

Paid-up additions:

Answer 44

Affect both cash and loan values of the policy

Question 45

The company will allow a policy change from a higher premium to a lower premium provided the insured

Answer 45

Presents satisfactory evidence of insurability

Question 46

The settlement options provisions may provide ________. (3 ANSWERS)

Answer 46

Payment of the proceeds for a fixed period Payment of the proceeds in fixed amounts until exhausted Proceeds held by the company, with interest payable to the beneficiary upon request

Question 47

The total life coverage of a permanent basic policy can be greatly increased through the use of

Answer 47

An interim term rider

Question 48

In certain situations a company may file interpleader actions with a Court of Law. This remedy is used to

Answer 48

Decide conflicting claims on the same insurance proceeds

Question 49

The settlement options provisions WILL NOT provide ________. (1 ANSWER)

Answer 49

Payment of the proceeds for the life of the insured

Question 50

TRUE OR FALSE? An endowment at age 65 policy with premium payable for a limited period of 20 years pays the full amount after 20 years.

Answer 50

FALSE

Question 51

TRUE OR FALSE? In most life insurance applications, the largest amount of information requested is data which identifies the applicant

Answer 51

FALSE

Question 52

TRUE OR FALSE? A policy is not rendered void by reason of misstatement of the assured's death.

Answer 52

TRUE

Question 53

TRUE OR FALSE? In a case where the premium has not been paid and the cash values have been exhausted, the policy can still avail of the grace period.

Answer 53

FALSE

Question 54

TRUE OR FALSE? According to the law of large numbers, events which happen seemingly by chance will actually be bound to follow a predictable pattern, if enough such happenings are observed.

Answer 54

TRUE

Question 55

TRUE OR FALSE? Anti-selection occurs when persons in poor health wish to buy insurance

Answer 55

TRUE

Question 56

TRUE OR FALSE? A policy is still in force for the full-face amount and will remain in force for a further period of four years and 118 days, without the payment of any premiums has availed of paid up insurance option

Answer 56

FALSE

Question 57

OR FALSE? In the case of misstatement of age, the amount of insurance is adjusted to the amount which the premium paid at the correct age would have purchased.

Answer 57

TRUE

Question 58

TRUE OR FALSE? A policy that provided guaranteed cash values plus extra annual distributions and pays the insured after a specified time is known as a participating endowment.

Answer 58

TRUE

Question 59

TRUE OR FALSE? In a group insurance it is assumed that every member of the group is insurable, provided that every member of the group is working a minimum number of (usually 50 hours) each week

Answer 59

FALSE