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3. The secondary functions of insurance will include all of the following, EXCEPT
4. Life insurance contracts can be arranged to provide cover against the following forms of
risk:
I. bank loans.
II. premature death.
III. sickness or disability.
IV. continuous stream of income during retirement (i.e. old age).
A. I and II.
B. I, II and IV.
C. III and IV.
D. All of the above.
7. Which of the following is NOT a loss prevention and loss reduction technique in fire
insurance?
8. Which of the following is NOT a loss prevention and loss reduction technique in life and
health insurance?
A. Fire.
B. Flood.
C. Theft.
D. Operating a supermarket.
13. In case of breach of utmost good faith, the aggrieved party can
A. a broker.
B. a reinsurer.
C. a life insurance agent.
D. a general insurance agent.
18. If BNM is satisfied that an insurer is not conducting his business in accordance with the
provisions of the Insurance Act, the authority can
21. In cash-before-cover policies, for example motor policies, the insured’s consideration is
22. Which of the following statements is NOT true about void contracts?
23. In general and life insurance contracts, the insured’s consideration is to pay or promise
to pay premium, while in the case of general insurance policies, the consideration by the
insurer is to
A. express appointment.
B. implication of the law.
C. subsequent ratification.
D. all of the above.
A. the proposer/policyholder.
B. the insurance company.
C. both a and b .
D. none of the above.
I. let his own interest conflict with his obligation to the principal.
II. take any secret profit or bribe from any party with whom he deals on behalf of the
principal.
III. disclose confidential information obtained in the course of his duties as an agent to
other parties except the principal insurance company.
IV. delegate his duties to a sub-agent without authority, expressed or implied.
A. I and II only.
B. II and IV only.
C. III and IV only.
D. All of the above.
27. Under the Agency Agreement, agents are allowed to do the following, EXCEPT
28. Which of the following is NOT true about the Premium Warranty?
A. The insured is required to pay the premiums charged for the insurance within 60 days
from the effective date of insurance cover.
B. If the premium is not paid by the 60th day, the insurance cover will be cancelled from the
61st day.
C. The insurer shall be entitled to short period premium for the period they have been on
risk.
D. Any payment received by the appointed agent shall be deemed to be received by the
insurer.
32. A sales strategy is a way of achieving the sales goal. The following is NOT an example
of such a strategy:
34. Which of the following does NOT come under medical and health insurance?
35. Insurers who launch new medical and health insurance products must lodge the
actuarial certificate for the products with BNM at least _______ days before the products
are offered to the public.
A. 31 days.
B. 30 days.
C. 60 days.
D. 90 days.
36. Medical and health insurance is usually divided into the following two categories:
A. indemnity policies and long-term policies.
B. benefit policies and yearly renewable policies.
C. indemnity policies and comprehensive personal accident policies.
D. benefit policies and indemnity policies.
38. Conventionally, medical and health insurance products are normally sold as
A. individual or group policies.
B. term or multiple policies.
C. cashless or group policies.
D. multiple or direct mail policies.
40. The four main classes of medical and health insurance policies generally sold by
Insurers would include
A. dental expenses, hospitalization cash benefit, critical illness, and disability income
insurance.
B. medical expenses, hospitalization cash benefit, critical illness, and disability income
insurance.
C. dental expenses, hospitalization cash benefit, clinical insurance, and disability income
insurance.
D. medical expenses, maternity cash benefit, critical illness, and disability income
insurance.
41. Some of the supplementary covers insurers may incorporate into their medical insurance
policies are
A. I and II.
B. I, II and IV.
C. II, III and IV.
D. All of the above.
42. The two most common expense participation methods found in major medical expenses
insurance policies are:
A. more standard risks are accepted for insurance resulting in a less favorable underwriting
result.
B. more sub-standard risks are accepted for insurance resulting in a less favorable
underwriting result.
C. more standard risks are accepted for insurance resulting in a more favorable
underwriting result.
D. more sub-standard risks are accepted for insurance resulting in a more favorable
underwriting result.
44. What are the common factors that medical and health insurance underwriters usually
look into while performing risk selection?
I. medical factors.
II. financial factors.
III. age and sex factors.
IV. occupational factors.
A. I and II.
B. I and III.
C. I, III and IV.
D. All of the above.
46. Which of the following is an important consideration when underwriting disability income
coverage?
A. friends.
B. age.
C. sex.
D. financial status.
A. the quoting of premium rates and terms, and issuance of the policy.
B. the assessment and selection of risks, and the determination of premium, terms and
conditions.
C. the determination of premium rates only.
D. the assessment of the possibility of recurrence of an illness.
48. __________ is a document drafted by the insurer in the form of questionnaires for each
class of insurance to assist the insurer in gathering information required to assess a risk
being proposed.
49. Which of the following conditions fall under the category of implied conditions?
A. I and II.
B. I, II and III.
C. II, III and IV.
D. All the above.
51. The reasonable timeframe for notification of loss under a medical and health insurance
claim is usually between
A. 14 days to 60 days.
B. 14 days to 30 days.
C. 14 days to 45 days.
D. 14 days to 90 days.
52. The following conditions have to be met before a medical and health claim can be paid,
EXCEPT
A. policy lapse.
B. no outstanding premium.
C. the loss was caused by the insured peril.
D. notification of loss was given without undue delay.
A. litigation is speedier, less costly and hearing is in an open rather than a private court.
B. arbitration is speedier, less costly and hearing is in an open rather than a private court.
C. arbitration is speedier, less costly and hearing is in a private rather than an open court.
D. arbitration is slower and less costly and hearing is in a private rather than an open court.
A. premature death.
B. financial guarantees.
C. permanent disability.
D. uberrima fides (utmost good faith).
57. The basic assumptions that are used in the life insurance premium rate calculations are
58. An option that allows the insured of a term assurance to convert the policy into
permanent assurance like whole life or endowment assurance without evidence of
insurability but subject only to proper adjustment in the premium charged is known as
A. Payment of the sum assured is only in the event of death, there is no surrender or
maturity value and it provides cheap guaranteed protection.
B. Payment of the sum assured is at the end of the said term if the life assured is living,
surrender or maturity value is applicable and premiums are reviewable.
C. Payment of the sum assured is only in the event of death, the suicide exclusion is
uncommon and premiums are reviewable.
D. Payment of the sum assured is at the end of the said term if the life assured is living,
paid-up value is applicable and premiums are not normally reviewable.
60. An agreement under which the life office, in return for the payment of a certain sum of
money known as the purchase price, makes a series of payment at regular intervals
from a fixed date until the death of the annuitant or at some other specified time is
known as
A. a superannuation scheme.
B. an annuity.
C. a family income benefit.
D. an endowment insurance.
61. Under the group insurance scheme the parties to the contract are the ______
62. The period after the due date, which allows the policyholders of an ordinary life policy to
pay premium without any forfeiture or penalty is known as the
A. days of privileges.
B. days of grace.
C. days of non-forfeiture.
D. days of renewal.
63. A policy under which the surrender value is used as a single premium to provide for an
assurance on the original terms, but for a reduced sum assured is known as
A. an extended policy.
B. a paid-up policy.
C. a term policy.
D. a fees policy.
A. a trust policy.
B. a CLA Section 23 policy.
C. an assignment.
D. a free policy.
65. Surrender value is granted if a life policy has been in force for
A. age.
B. sex.
C. friends.
D. avocation.
68. Which of the following methods is not used by insurers when dealing with sub-standard
lives?
70. In respect of income tax for gainfully employed individuals, which are not allowable
deductions?
A. contributions to EPF.
B. life insurance premium.
C. dependent children’s support.
D. personal medical bills.
A. advertising costs.
B. medical examination expenses.
C. policy issue expenses.
D. expenses of servicing the policy.
72. Why do insurance companies have a bonus loading on certain life policies?
A. net premiums.
B. loading for expenses.
C. profit from the share market.
D. expenses for contingencies.
76. The purpose of an actuarial valuation of a life office is to test and determine
77. The investment that a life office has made from the premiums it has received after
meeting its outgoes in the form of claims and expenses is called
A. book value.
B. surplus.
C. assets.
D. liability.
78. What type of bonus is only paid on in-force policies, which result in claims either by
maturity or death?
A. interim bonus.
B. terminal bonus.
C. cash bonus.
D. guaranteed bonus.
A. loans to policyholders.
B. motor cars and office equipment.
C. cash in hand.
D. guaranteed bonus.
80. Identify the main feature(s) of a life insurance policy which provides for a guaranteed
bonus each year.
83. ‘No life policy after the expiry of two years from the date on which it was effected be
called in question by an insurer on the ground that there is a misrepresentation made in
the proposal for insurance, or in a medical report or in a document which led to the issue
of the policy. The above description is recited under the
A. operative clause.
B. suicide clause.
C. incontestability clause.
D. provisos.
84. Name, age, sex, occupation and address of the life assured are contained in
A. the preamble.
B. the schedule.
C. the heading.
D. attestation.
85. This embodies the answers to the questions in the proposal form and the personal
statements as the basis of contract. It also subjects the policy to the conditions and
privileges printed in the policy document. What does this refer to?
A. the preamble.
B. the proviso.
C. the operative clause.
D. conditions and privileges.
86. Where the policy money becomes payable in consequence of the death of the life
insured, who is the person entitled to claim?
88. Where a person has disappeared without trace for more than seven years, the Courts
may presume death in the light of inquiries made in likely places of interested people
who could be expected to have heard of him. This refers to
89. If death occurs accidentally or suddenly without known cause or prior medical attention,
what would be most useful as proof of death?
A. medical certificate.
B. certificate of death.
C. coroner’s inquest.
D. Commissioner of Oaths.
90. Before paying the maturity claim under an endowment insurance, the life office requires
the following basic proofs, EXCEPT
91. Among other factors, the premiums charged for life insurance policies usually vary in
relation to
92. What is the age last birthday, if the life assured was born on 21 March 1965 and
the date of the proposal submitted was 1 January 1998?
A. 31 years old.
B. 32 years old.
C. 33 years old.
D. 30 years old.
93. What are the outstanding premium charges for the following situation?
A. RM1,882.58.
B. RM1,889.86.
C. RM1,890.40.
D. RM1,908.93.
A. RM1,035.00.
B. RM1,095.00.
C. RM1,140.00.
D. RM1,200.00.
A. RM192.50.
B. RM197.50.
C. RM206.25.
D. RM218.00.
96. The following are the principles underlying the guidelines on the Code of Ethics and
Conduct, EXCEPT
97. The following statements are true pertaining to the Code of Conduct, EXCEPT
A. it serves as a guide for establishing sound and prudent business practices amongst life
insurances companies.
B. it intends to replace the judgment of employees in conducting their day-today business.
C. it serves as a guide for the promotion of proper standards of conduct.
D. none of the above.
99. When in doubt as to the implication of the Code at Conduct an employee should seek
guidance from
100. Who are the parties involved in the case of a complaint from a policyholder that an
intermediary has acted in breach of the Code of Conduct?
I. the policyholder.
II. the intermediary.
III. the life insurance company.
A. I and II only.
B. I and III only.
C. II and III only.
D. I, II and III only.
Answer
1 A 26 D 51 B 76 D
2 D 27 B 52 A 77 C
3 A 28 C 53 D 78 B
4 D 29 A 54 C 79 D
5 C 30 D 55 C 80 A
6 D 31 D 56 D 81 A
7 D 32 D 57 A 82 D
8 D 33 D 58 B 83 C
9 D 34 B 59 A 84 B
10 A 35 B 60 B 85 B
11 A 36 D 61 C 86 B
12 C 37 B 62 B 87 D
13 A 38 A 63 B 88 B
14 D 39 D 64 C 89 C
15 B 40 B 65 B 90 B
16 D 41 C 66 C 91 C
17 D 42 C 67 C 92 B
18 D 43 B 68 D 93 A
19 D 44 D 69 C 94 C
20 D 45 A 70 D 95 B
21 C 46 D 71 D 96 C
22 D 47 B 72 D 97 B
23 A 48 B 73 C 98 C
24 D 49 D 74 C 99 A
25 C 50 C 75 A 100 D