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MULTIPLE CHOICE
a. No cash value is available to the policy owner during the term of the policy
b. Renewal and conversion privileges are available
c. A benefit will be paid at the end of the period of coverage if the person is then
alive
d. Insurance protection will be limited to a specified period
2. Indicate which of the following is not a function of an application for life insurance
policy.
3. 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?
4. A policy where an irrevocable beneficiary has been designated, the insured, without
the beneficiary’s permission, can
a. Company discovers at any time that the policy owner was actually a minor at
the time of application
b. Insured person intentionally kills himself during the suicide exclusion period
specified in the policy
c. Insured person is killed in military action during the contestable period of the
policy
d. Company discovers during the contestable period that the application contains
a material statement.
7. Which of the following is the least important reason for requiring that insurance
agents be licensed?
8. In the event that a policy owner elects the paid-up insurance option
a. The premiums stop and the policy continues for the full face amount until
age 65
b. The insurance continues at a reduced amount and with a reduced premium
c. The policy will automatically terminate
d. The premiums cease and protection continues with a reduced amount of
coverage
9. The company will allow a policy change from a lower premium to a higher premium
provided the insured
10. A policy which permits the policyholder to vary the level of premiums, the sum
insured and has its cash values dependent upon the investment performance and
the level of premium paid is known as __________ policy
12. In most life insurance applications, the largest amount of information requested
is data which
14. The total life coverage of a permanent basic policy can be greatly increased
through the use of
15. Life insurance companies make use of the laws of probability in order to
16. In the case of renewable term insurance, the policy owner may
18. Endowment life insurance and term life insurance are similar in that both plans
a. Counselor selling
b. Needs Based selling
c. Planned selling
d. Multiple products selling
20. Name the provision in a permanent life insurance policy under which premiums
are discontinued, full insurance will be maintained for a specified period:
23. The conservation of a life insurance policy is dependent on all the following except
24. All of the following are sources of information to an insurance company pertaining to
the insurability of an applicant except
25. If the applicant for life insurance fails to disclose or misrepresents material fact, the
contract is
26. The settlement options provision may provide all of the following except:
27. Non-forfeiture provisions are included in whole life and endowment policies to
assure the policyowner that certain minimum policy benefits shall remain with him
even under certain changed conditions. Non-forfeiture values guarantee to the
policyowner that
29. In certain situations a company may file interpleader actions with a Court of Law
This remedy is used to
31. Which of the following does not have a legitimate insurable interest?
32. The basic coverage provided by the life insurance policies may be supplemented
by a separate provision that provides coverage for accidental amounts or of a
different nature. Collectively these provisions are known as
a. riders
b. deposit privileges
c. dividends
d. assignment
35. If the interest on a policy loan is not paid at the policy anniversary the insurance
company may
a. Demand full settlement of the loan
b. Terminate the contract
c. Refuse to grant future additional loan
d. Increase the present loan by the interest
37. The insured named a primary and secondary revocable beneficiary for Ps. 20,000
policy. Which of the following is correct?
38. 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
39. If the interest on a policy loan is not paid at the policy anniversary the insurance
company may
TRUE OR FALSE
1. In a case where the premium has not been paid and the cash values has been
exhausted, the policy can still avail of the non-forfeiture options.
2. 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.
4. 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.
6. A policy that provides guaranteed cash values plus extra annual distributions and
pays the insured after a specified time is known as a participating endowment.
10. A policy is not rendered void by reason of misstatement of the insured’s age.
ANSWER KEY
1. d. 1. F
2. d 2. T
3. b. 3. T
4. b. 4. F
5. c. 5. T
6. a. 6. T
7. d. 7. F
8. d. 8. F
9. b. 9. F
10. c. 10. T
11. b.
12. c.
13. a.
14. c.
15. a.
16. a
17. d.
18. c.
19. b.
20. a.
21. c.
22. a.
23. c.
24. d.
25. d.
26. d.
27. b.
28. c.
29. b.
30. d.
31. a.
32. a.
33. a.
34. d.
35. d.
36. d.
37. b.
38. c.
39. a.
40. b.