Number Sequence Analysis

• This is a mock exam relating to IIAP - Set 1, V1

Single Premium Policy

• Requires only one premium payment is required for the policy

Policy Fee

• A fixed amount added to the premium of a given policy regardless of policy size

Calculating Required Premiums

• The agent must know the applicant's face amount desired to calculate the required premiums for a given policy

Calculating Premiums for Other Modes of Payment

• The annual premium is multiplied by a conversion factor for the mode of payment desired to calculate premiums for other modes of premium payment

Life Insurance Contract

• If a father enters into a life insurance contract on behalf of his child, the father is the applicant-owner

Convertible Feature of a Term Insurance Policy

• Provides that the policy can be changed to a permanent insurance policy without evidence of insurability

Death Within Two Years of Buying a Life Insurance Policy

• If death is accidental (e.g., car accident) within two years of buying a life insurance policy, the insurance company will pay the face amount

Explaining Dividends

• When explaining dividends it must be made clear that they are not guaranteed

Premium Computation

• Part of the premium paid by a policyholder is invested by the insurance company and is known as interest in premium computation

Parties Involved in a Life Insurance Contract

• The parties involved are the insurance company and the insured

Advantage of Insurance

• The fundamental advantage of insurance as a means of meeting economic losses is that these losses are deferred for a specified period of time

Life Insurance Contribution

• Life insurance contributes directly to the welfare and progress of the country by all of the above; accumulating capital for investment, partially relieving the community, and encouraging provisions for the future

Life Expectancy

• The number of years that persons at a given age will live on the average as shown by the mortality table

Insurance Plan

• A permanent plan offers both protection and savings

Protection

• A man with moderate means can have maximum protection possible through term insurance

Dividends

• A participating policy will entitle the policyowner to receive dividends yearly

Longest Protection

• Ordinary life gives the longest protection out of the options

Policy Purchased at Age 35

• An individual at age 35, purchases a 20 year endowment will in 20 years receive the face amount of the policy himself if he is still alive

20 Life Policy

• Protection is until age 100, premium is for 20 years

Participating Plan Benefits

• A participating plan entitles the policyowner to receive a return of excess premium termed as dividends

Policy Ownership

• A policy which does not provide for the build up of cash values and whose premiums remain level is a Level Term

Term Insurance Features

• Two attractive features of a Term insurance are convertibility and renewability

Term Insurance

• A term insurance which allows the policyowners to convert it to a permanent insurance within a specified period without evidence of insurability contains convertibility features

Term Policy

• A term policy only offers protection

Term Plan vs Permanent Plan

• The main difference of the two, is that permanent plans provide both protection and savings but term plans only offer protection

Savings Element

• The savings element of permanent plans allows for the build up of cash values

Term Rider

• A term insurance added to a permanent plan

Optional Rider

• An optional rider which can be attached to a policy stopping further premium payment in the event of disability is called waiver of premium

Waiver of Premium

• The waiver of premium needs to be effective with both total and permanent disability

Disability Benefits

• Disability benefits are not paid for self-inflicted injuries

Disability Income Policy

• If someone becomes paralyzed as a result of attempting to commit suicide, and under usual provisions of a disability income policy, they will receive neither disability income nor waiver of premiums

Permanent Life Policy

• For a person wanting a greater coverage for the least amount of premium has an option of attaching what term insurance rider in their permanent life policy

Payor's Benefit

• One supplementary benefit offered is a payor's benefit which is intended to provide a waiver of premium benefit in the event of death or disability of the person paying the premium

Dividend Policy

• If an insured is disabled and their life insurance policy is being continued in force through the waiver of premium, the dividends of the policy would continue as if the owner is paying the premium

Proposed Insurance

• A policy with a minor as the proposed insured is called a juvenile policy

Standard Premium Rates

• Life insurance policies for which higher than standard premium rates are payable are rated policies

Voluntary Choice

• Since the purchase of life insurance is a voluntary choice, the individual must meet certain standards of health and occupation

Life Insurance Premium

• Least effect on what to be charged is income

Insurance Companies Sources

• Various sources of information about the insured are all of the above; application form, medical information bureau, inspection report

Anti-Selection

• When persons in poor health wish to buy insurance

Insurance: Risk Meaning

• Risk means hazard on people's lives

Insurance Application

• In an application, information that must be disclosed is every fact in someone's knowledge that is material to the insurance

Insurance Risks Classification

• Insurance risks are classified as standard, substandard and declined

Substandard Risk Factors

• A risk is considered substandard based on the following criteria: death, occupation and moral character, occupation, moral character and family health history, income, educational attainment and occupation, death, income and educational background

Hazardous Occupation

• A hazardous occupation could be defined as all of the above because there is an exposure to the duties sustaining injury degree, exposures in unhealthy working conditions, an occupation which exposes the insured to social hazards

Application Statements

• Statements in the application forms are representations

Agent Confidential Report Information

• Agents Confidential Report should include all information he knows which are material to the application for insurance

Health Confined

• If someone has been confined to a hospital 3 years prior to application for insurance, they should provide name of attending doctor, diagnosis, date of confinement

Confidential Medical Information

• The medical impairment bureau is a confidential medical information Insurance companies have a source of applicant's life insurance

Policyowner Insurance

• Mutual companies are owned by policyowners

Stock Insurance

• Stock companies are owned by stockholders

Importance of the Application

• Completing an application and why is it important is because it forms the policy contact and the company may accept or reject based on information

Correct Statement

• All information about a client or a prospective client has to be treated as confidential is the correct statement

Incorrect Statement

• Any verbal statement made by the agent to the application is not included in the contract

Life Insurance Defintion

• Life insurance is a cooperative risk-sharing plan

Income Sources

• A life insurance company earns income from two main sources being premium income and investment income

Actuary Role

• The actuary is the official who makes the necessary assumption and calculation with respect to the principal elements of life insurance premium in order to arrive at the premium rates to be charged

Loading Definition

• Loading is the difference between the gross and net premiums for the purpose of paying the insurance overhead expenses including commissions and taxes

Life Insurance Provision

• Life insurance can provide money when income stops because of all of the above; disability, death, retirement

Life Insurance Premium Factors

• The three elements that make up a life insurance premium are mortality experience, investment earnings and operating expenses