IC REVIEW b.
Cash surrender value, automatic
1. In a policy where an irrevocable beneficiary premium loan.
has been designated the ensured without the c. Fixed amount, fixed period, life income,
beneficiary’s permission can: interest on deposit.
d. Double indemnity, total and permanent
a. Avail of a non- forfeiture’s option disability waiver.
b. Discontinue Premium payments 7. An insurance company generally has the right to
c. Borrow minimal cash loan rescind a life insurance if,
d. after the dividend option presently in effect
2. Indicate which of the following is not a function a. Company discovers at any time that the
of an application for life insurance policy. policy owner was actually a minor at the
time of application.
a. To give details pertaining to non-forfeiture options b. Insured person intentionally kills
b. To furnish information on which contact of life himself during the suicide exclusion
insurance may be written period specified in the policy.
c. To furnish initial information as to insurability c. Insured person is killed in military
d. To convey to the company the desire of the action during the contestable period of
applicant to obtain insurance the policy.
3. Both endowment and term life insurance d. Company discovers during the
policies provide that contestable period that the application
contains a material statement.
a. No cash value is available to the policy owner e.
during the term of the policy 8. In the event that a policy owner elects the paid-
b. Renewal and conversion privileges are available up insurance option,
c. A benefit will be paid at the end of there period of a. The premiums stop and the policy
coverage if the person insured then alive continue for the full face amount until
d. insurance protection will be limited to a specified age 65.
period. b. The insurance continues at a reduced
4. A father has his present life insurance payable amount that with a reduced premium.
to his estate and because he has now retired he c. The policy will automatically terminate.
wants to pass the policy on to his son will d. The premiums cease and protection
assume the premium payments. Which of the continues with a reduced amount of
following he have to appoint his son to achieve coverage.
his desire and protect the son from Estate Tax
Liability? 9. The company will allow a policy change from a
higher premium to a lower premium provided
a. Irrevocable primary beneficiary the insured
b. Absolute assignee a. Buys a new plan altogether
c. Irrevocable secondary beneficiary b. Presents satisfactory evidence of
d. Revocable primary beneficiary insurability
5. Which of the following is the least important c. Momentarily assigns the policy to the
reason for requiring that the insurance agents be company
licensed? d. Obtains written consent from his or her
spouse
a. to establish and maintain high professional and
10. In most life insurance application, the largest
ethical standards.
amount of information requested is data which
b.To protect the public
a. Identifies the applicant
c. To give the government adequate control over the
b. Describes the type of insurance applied
conduct of agents.
for
d. To provide additional income to the government through
license fees. c. Relates to the insurability of the
applicant
6. What are the basic settlement options? d. Describes the desired benefits and mode
of payment
a. Policy loan, guaranteed insurability.
11. Paid-up additions c. Renew providing the insurance company
a. Affect both cash and loan value of the agrees to continue coverage
policy d. Renew at the same premium for further
b. Don’t affect the cash value of the policy period of years
c. Don’t affect the load or cash value of the
policy
d. Only affect the cash value the policy 17.Life insurance companies make use of the laws of
probability in order to
12.The total life coverage of a permanent basic
policy can be greatly increased through the use of : a. Estimate future death rates among members of a
given group
a. An accidental death benefit rider b. Predict when an individual insured will die.
b. An interim term rider c.Develop statistics of past death among the general
c. A supplemental term rider population
d. None of the above d. Determine the experienced death rate among the
insured persons.
13.A policy which permits the policyholder to vary
the level of premium or the sum insured, and has its 18.Endowment life insurance and term life insurance are
cash values dependent upon the investment similar in both plans.
performance and the level or premium paid is known
as ______ policy. a. Build up cash value rapidly in the early policy years.
b. Provide for payment of the face amount if the
a. Participating whole life policy insured is alive at the end of the specified period.
b. Participating endowment c. Provide life insurance protection for only the period
c. Universal life of time specified in the policy contract.
d. None of the above d. Contain provisions for automatic continuation of the
insurance protection at the end of a specified period.
14.Which of the following statement about 19. An agent who determine a prospects complete
‘Disability Waiver of Premium Rider’ is false? financial requirements preparatory to offering
him a policy using the correct selling approach
a. Disability must occur before a stated date known as
b. The insured has to die while disabled
c. There is a waiting period. a. Counselor selling
d. It has to be attached to a life insurance policy b. Total needs selling
c. Planned selling
15.A man applied for a P20,000 whole life policy d. Multiple products selling
and paid the full initial premium to the soliciting
agent. The agent issued a binding receipt. Under 20.The conversion of a life insurance policy is
such a receipt, the insurance company. dependent on all of the following except:
a. Offers permanent insurance coverage effective a. The level of first year commission
as of the date of the application b. Agents service oriented attitude
b. Promises that the insurance coverage will c. Pressure selling
become effective as of the date the application d. The use of effective needs selling.
is approved.
c. Guarantees that the policy will issued as applied for. 21.All of the following are sources of information to
d. Immediately provides interim insurance that an insurance company pertaining to the insurability
remains in effect until the policy is issued or the of an applicant except:
application is declined.
a. The applicants personal appearance
16. in case of renewable term insurance, the policy b. Medical examination report
owner may c. Agents inspection report
a. Renew the coverage based on a hgher d. Government tax Records
preimium
b. Change the life insured at renewal date
22.Name the provision in a permanent life insurance a. No death claim will be denied for any
policy under which premiums are discontinued full misstatement on the application
insurance will be maintained for a specified period b. Any guaranteed policy values will belong to the
policy owner even if premium payments are
a. Extended term insurance discounted
b. Paid up insurance additions c. The face amount of the policy will remain the
c. Life income option persons same even if the insured’s health becomes
d. Reduce paid up insurance impaired.
d. The premium on the policy will remain the same
even when another beneficiary is added to the
23.the extent of medical evidence required is policy.
determined by:
28. in certain Situations a company may file
a. The age of the applicant and the proposed sum to interpleader actions with a Court of Law. This
be insured remedy is used to;
b. Occupation of the applicant a. determine if the cause of the insured’s death
c. Financial condition of the applicant was an excluded risk
d. Date of the last medical examination b. decide conflicting claims on the same
insurance proceeds
24. Not with standing various possible legal c. resolve the question of insurable interest
impediments, if the owner of an endowment at age d. recommend the best settlement options for
65 policy tells you that maturity of the policy he the beneficiary. If the interest on a policy
wants to provide his church with a monthly, loan is not paid at the policy anniversary the
donation for as long as the church exist. insurance
Which option do you recommend? 29. Purchasing a continuous premium, whole life
policy rather than a limited payment whose life
a. Fixed income option policy give the policy owner, the advantage of:
b. Periodic annuity option
c. Interest option A. Concentration of premium payments during the
d. Life annuity option; period of the highest earnings.
b. Liberal risks selection procedure
25. If the applicant for life insurance fails to disclose or c. More insurance protection for the same annual
misrepresent material fact. He contract is premium outlay
a. Valid if the insurer issues policy which is d. More rapid accumulation of cash values
delivered to the applicant. 30. Which of the following does not have a
b. Void from the beginning legitimate insurable interest?
c. Voidable by the insurer if it has been force less
than 2 years a. An individual on the life of his mistress
d. Valid unless the insurer can prove fraud. b. An individual on his own life.
c. An individual on the life of his spouse
26. The settlement options provision may provide all of d. A finance company on the life of its borrower
the following except: 31. A non- forfeiture option would ordinarily be
a. Payments of the proceeds for the life of the selected at the time a policy owner
insured.
b. Payments of the proceeds over a fixed period a. Renews a term life policy
c. Payments of the proceeds in fixed amount until b. Convert a term policy to whole life policy
exhausted c. Choose a mode of settlement for the life proceeds.
d. Proceeds held by the company, with interest d. Discontinues premium payments for a whole life
payable to the beneficiary on request or endowment policy
27. Non-forfeiture provisions are included in whole life 32.Which of the following statements regarding
and endowment policies to assure the policy owner that insurance premium is FALSE?
certain minimum policy benefits shall remain with him a. Cash is required for all premium paid in the
even under certain changed conditions. Non-forfeiture grace period
values guarantee to the policy owner that, b. A premium is the legal consideration needed to
affetuate a life insurance policy
c. The grace period is usually 31 days at any time.
d. Premium which are paid quarterly or semi- b. Permits the company to pay claims within 2 years
annually are higher than those paid annually c. Makes it necessary for the beneficiary to present
proof of death in the event of the death claim
33.If the interest on a policy loan is not paid at the d.Prevents the company from denying a claim after
policy anniversary the insurance company may: the policy has been in force for 2 years
39. The insured name primary and secondary
a. Demand full settlement of the loan revocable beneficiary for P20,000 policy. Which
b. Terminate the contract of the following is correct?
c. Refuse to grant future additional loans
d. Increase the present loan by the interest. a. The designation of a contingent beneficiary is
subject to the primary beneficiary approval
34.The basic coverage provided by life insurance b. The insured can add a third beneficiary at a time
policies may be supplemented by separate provision c. Any policy loan or assignment will require the
that provide coverage for additional amount or of a primary beneficiary’s signature
different nature. Collectively these provisions are d. Upon the insureds death the primary and
known as: secondary shall each receive P10,000
40. A yearly renewable term life insurance policy
a. Riders generally specifies that:
b. Deposit privileges
c. dividends a. The policy owner may renew the policy once
d. Assignment b. Premium shall increase every time the policy
35. Which of the following statement is FALSE? renewed
c. Evidence of insurability shall be required every
a. The cash value of a whole life policy builds up renewal.
at a slower rate than 20 year endowment. d. Cash values will increase for as long as the
b. The cash value in a permanent policy is policy is in force
guaranteed by the company
c. The cash value of an endowment builds up faster
than that for a limited pay life policy of the
same duration
d. Because of its very short duration, the cash value
of a yearly renewable term policy grows very fast
36. If the interest of a policy loan is not paid up at
the policy anniversary, the insurance company
may:
a. Increase the present loan by the interest
b. Terminate the contract
c. Refuse to grant future additional loan
d. Demand full settlement of the loan
37. When you bought an insurance policy on your
wife’s life, you were 27 and she was 26, but you
stated that you were 26 and she was 27. Five
years later your wife died. The insurance will
pay:
a. Slightly less than the face amount
b. The face amount
c. The face amount adjusted for misstatement of age
d. The sum of the premium paid
38. The incontestability clause?
a.Gives the company the right to rescind a policy
DIRECTION: Under Column A of your answer sheet, 49. T Anti- selection occurs when a persons in
Write T if the statement is TRUE and F is the statement poor health wish to buy insurance
is FALSE
50. T According to the law of large numbers,
41. T In the case of misstatement of age, the events which happen by chance will actually be
amount of insurance is adjusted to the amount which found to follow a predictable pattern if enough
the premium paid at the correct age would have such happenings are observed.
purchased
42. F In a case where the premium has not been
paid and the cash value has been exhausted, the
policy can still avail of grace period.
43. T A policy is not rendered void by reason for
misstatement of the assured’s death
44. F In a group insurance, it is assumed that every
member of the group is insurable provided that
every member of a group is working a minimum
number of (usually 50) each week.
45. F A policy is still in force in the full face
amount and will remain in force for a further
period of four years and 118 days without the
payment of any premium has availed of paid-up
insurance option
46. F in most life insurance application, the largest
amount of information requested is data which
identifies the applicant
47. T A policy that provides guaranteed cash value
plus extra annual distribution and pays the
insured after a specified time is knows as
participating endowment
48. T An endowment at age 65 policy which
premium payable for a limited period of 20
years pays the full amount after 20 years.
