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Review Test Questions

View: All Questions Correct Questions Incorrect Questions Show Details (17 results)

ID Question Correct Answer Explanation

224875 Anti-selection occurs Incorrect

when an agent thinks only of his own interest and not of his policyowners

when you purchase bad stocks with expectation that they will improve

when the insurance company accepts more than as usual share of share of poor risk

when persons in poor health wish to buy insurance

224755 A life insurance program is defined below as Incorrect

A computer illustration of cash values and other policy details

An agency training schedule

A hardworking agent’s typical working day

A planned insurance estate

A participating Whole Life Policy

provides protection throughout
life and the dividends can be
A policy that insures for life and provides for probable payment in used to increase the death
98984 excess of the sum insured is known as a Incorrect benefit. A Universal Life Policy
(an)______________________policy. does not necessarily provide life
coverage throughout life and its,
therefore, not the answer to this
question.

participating whole life

participating endowment

term with an advance premium deposit provision

annuity

universal life

group deposit administration

None of the above

The Paid-up insurance option

A policyholder with a whole life policy has reached the age of 65 would give him the benefit of
98928 and does not want to go on paying premiums but does want to Incorrect protection for a reduced amount
remain insured for life. Which of the following would he take? for the remainder of his life with
no further premiums to be paid.

cash value

loan value

extended term insurance

accumulated dividend

paid-up insurance (reduced amount)

paid-up addition
ID Question Correct Answer Explanation

He would have to appoint his

wife as an irrevocable,
beneficiary because the law
does not permit an absolute
assignment between spouses. If
he appointed his wife as a
A client has a policy with you for P1,000,000 which is payable to revocable beneficiary then, the
98818 his estate and he tells you that he wants his wife to receive this Incorrect proceeds of the policy would
money free from estate tax. You recommended that he from a taxable part of his
estatefor the purposes of Estate
Tax.This could have the result of
making the government his
biggest beneficiary which is
unlikely to be in accordance with
his desires.

Appoint an irrevocable beneficiary.

Make an absolute assignment.

Take a new policy with the bank as a third-party owner.

Appoint a revocable beneficiary.

Make a collateral assignment.

None of the above

On 1st April the applicant was operated on by Dr. Cutitiout at the

Waterous Hospital, San Juan for a stomach problem. He was “ A stomach problem” is not an
99590 discharged on 10th April as cured and he had no problems since. Incorrect adequate diagnosis and there is
Which of the most important pieces of information has been no mention of any treatment.
missed?

Date of illness or examination

Doctor’s name and address

Name of hospital or clinic

Diagnosis and treatment

Duration of illness or treatment

Result and date of recurrence, if any

In this case the occupation

suggests that there may be
rather more danger involved
An application form and the agent’s report on the back reveals the
than is usual and information
following information age: 41, Residence: Zamboanga City,
will be required as to the types
Beneficiaries primary-wife, secondary-three children, Occupation-
99555 Incorrect of goods that the applicants is
barter trader, annual income- P200,000 plus, occasionally flies by
and has been involved in
chartered plane. Which of the following risk factors has to be
bartering. Is he involved in illicit
considered?
trade? Is he likely to come in
conflict with the Coast Guard,
customs or police.

health history

occupation

residence

financial

moral

avocation
ID Question Correct Answer Explanation

Substandard premium rates are

changed applicants who carry a
99121 Substandard premium rates are charged Incorrect higher health or occupational
risk to achieve the fair price for
the extra risk involved.

applicants who are better-than- average risks.

policies which carry a lower than usual interest rate.

applicants who carry a higher health or occupational risk.

applicants who desire low premiums.

The Extended Term Insurance

option would continue to present
value of the coverage, provided,
that there were no policy loans
If a policyholder wants to remain insured for the full amount of the outstanding for a definite period
98942 sum insured for as long as possible but he does not want to pay Incorrect at no further cost. In effect, the
any more premiums. Which of the following should he choose? cash surrender value is used as
a single premium to purchase
term insurance for the same
face value for a predetermined
period.

cash value

loan value

extended term insurance

accumulated dividend

paid-up insurance (reduced amount)

paid-up addition

The maximum immediate value

that he can get is the cash
If a policyholder wants to get the maximum immediate value from
value. The loan value is usually
98914 his non-participating policy by surrendering it, which of the Incorrect
the cash value discounted by the
following would he get?
amount of interest due until the
next policy anniversary.

cash value

loan value

extended term insurance

accumulated dividend

paid-up insurance (reduced amount)

paid-up addition

The Insurance Code specifies that a contract does not take effect
227519 Incorrect
unless

The policy is delivered to an insured, his assignee, agent or beneficiary

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

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

The insured has named in the policy no fewer than two beneficiaries

Harry made a policy loan to pay for the tuition fees of his children.
227219 After a year, he is still unable to pay for the loan. What will the Incorrect
insurance company do?
ID Question Correct Answer Explanation

Increase the present loan by the interest

Demand full settlement of the loan

Refuse to grant future additional loan

Terminate the contract

Life insurance applications usually carry large amount of

227184 Incorrect
information that

relates to the insurability of the applicant

identifies the applicant

describes the desired benefits and mode of payment

describes the type of insurance applied for

The following statements about “Disability Waiver of Premium

227144 Incorrect
Rider” except:

There is a waiting period

Disability must occur before a stated date

The insured has to die while disabled

It has to be attached to a life insurance policy

A prospect tells you that he wants to be insured at age 65 but he

227039 does not want to pay more than the minimum possible level of Incorrect
premiums. Would you offer him

Endowment policy

Term policy

Whole life policy

A life at age 65 policy

Your client tells you that when his father died, received P500, 000
free of Estate Tax and that he had not even known that this policy
226890 Incorrect
existed. Which of the following classifications did your client fall
under?

Collateral assignee

Absolute assignee

Revocable primary beneficiary

Irrevocable primary beneficiary

Setting aside possible legal impediments, which option would you

recommend if an endowment policyowner at age 65 tells you that
230125 Incorrect
he wants to provide his church with a monthly donation for as
long as the church exists?

Interest option

Life annuity option

Fixed income option

Periodic annuity option

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