50 Questions
If the interest on a policy loan is not paid at the policy anniversary, the insurance company may
Increase the present loan by the interest
The extent of the medical evidence required is determined by
The age of the applicant and the proposed sum to be insured
Indicate which of the following is not a function of an application for life insurance policy
To convey to the company the desire of the applicant to obtain insurance
The insurance companies make use of the laws of probability in order to
Estimate future death rates among members of a given group
Which of the following statements regarding insurance premiums is false
Cash is required for all premiums paid in the grace period
Endowment life insurance and term life insurance are similar in that both plans
Provide life insurance protection for only the period of time specified in the policy contract
A non-forfeiture option would ordinarily be selected at the time a policy owner
Discontinues premium payments for a whole life or endowment policy
The conversation of a life insurance policy is dependent on all the following exxcept
Pressure selling
Purchasing a continuous-premium, whole life policy rather than a limited-payment whole life policy, gives the policy owner the advantage of
More insurance protection for the same annual premiums outlay
Name the provision in a permanent life insurance policy under which premiums are discontinued, full insurance will be maintained for a specified period:
Extended term insurance
The basic coverage provided by life insurance policies may be supplemented by separate provision that provide coverages for additional amounts or of a different nature. Collectively these provisions are known as
Riders
The insured name a primary and secondary revocable beneficiary for P20,000 policy. Which of the following is correct?
The insured can add a third beneficiary at any time
An agent who determines a prospect's complete financial requirements preparatory to offering him a policy using the correct approach known as
Total needs selling
In a policy where an irrevocable beneficiary has been designated the insured, without the beneficiary's permission, can
Discontinue premium payments
Which of the following statements is false?
Because of its very short duration the cash value of a yearly renewable term policy grows very fast
Which of the following does not have legitimate insurable interest
An individual on the life of his mistress
Which of the following is the least important reason for requiring that insurance agents be licensed?
To provide additional income to the government through license fees
A yearly renewable term life insurance policy generally specifies that
Premiums shall increase every time the policy renewed
If the interest on a policy loan is not paid at the policy anniversary the insurance company may
Increase the present loan by the interest
The incontestability clause
Prevents the company from denying a claim after the policy has been in force for 2 years
Non-forfeiture provisions are included in whole life and endowment policies to assure the policy owner that certain minimum policy benefits shall remain with him even under certian changed conditions. Non-forfeiture values guarantee to the policy owner that
Any guaranteed policy values will belong to the policy owner even if premium payments are discontinued
In case of renewable term insurance, the policy owner may
Renew the coverage based on a higher premium
When you bought an insurance policy on your wife's life, you were 27 and she was 26, but you stated that were 26 and she was 27. Five years later your wife died. The insurer will pay
The face amount adjusted for misstatement of age
Both endowment and term life insurance policies provide that
Insurance protection will be limited to a specified period
All of the following are sources of information to an insurance company pertaining to the insurability of an applicant except
Government tax records
an insurance company generally has the right to rescind a life insurance policy if
Company discovers at any time that the policy owner was actually a minor at the time of application
In most life insurance applications, the largest amount of information requested is which
Relates to the Insurability of the applicant
In the event that a policy owner elects the paid-up insurance option
The premiums cease and protections continues with a reduced amount of coverage
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?
Absolute assignee
What are the basic settlement options?
Filed amount, fixed period, life income, interest on deposit
Not with standing possible legal impediments, if the owner of an endowment at age 65 policy tells you that at the maturity of the policy he wants to provide his church with a monthly donation for as long as the church exists. which option do you recommend?
Interest option
A policy which permits the policy holder to very the level of premium or the sum insured, and has its cash values dependent upon the investment performance and the level of premium paid is known as ________ policy
Universal life
Which of the following statements about "Disability Waiver of Premium Rider" is false?
The insured has to die while disabled
If the applicant for life insurance fails to disclose or misrepresents a material fact, the contract is
Valid unless the insurer can prove fraud
A man applied for a P20,000 whole life policy and paid the full initial premium to the soliciting agent. The agent issued a binding receipt. Under such a receipt, the insurance company
Immediately provides interim insurance that remains in effect until the policy is issued or the application is declined
Paid-up additions:
Affect both cash and loan values of the policy
The company will allow a policy change from a higher premium to a lower premium provided the insured
Presents satisfactory evidence of insurability
The total life coverage of a permanent basic policy can be greatly increased through the use of
A supplemental term rider
The settlement options provisions may provide all of the following except:
Payments of the proceeds for the life of the insured
In certain situations a company may file interpleader actions with a court of Law. This remedy is used to
Decide conflicting claims on the same insurance proceeds
An endowment at age 65 policy premium payable for a limited period of 20 years pays the full amount after 2 years
False
A policy is not rendered void by reason of misstatement of the assured's death
True
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
True
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
False
A policy that provided guaranteed cash values plus extra annual distributions and pays the insured after a specified time is known as a participating endowment
True
In most life insurance applications, the largest amount of information requested is data which identifies the applicant
False
In a case where the premium has not been paid and the cash values have been exhausted, the policy can still avail of the grace period
False
Anti-selection occurs when person in poor health wish to buy insurance
True
In the case of misstatement of age, the amount of insurance is adjusted to the amount which the premium paid at the correct age would have purchased
True
In a group insurance it is assumed that every member of the group is insurable, provided that every member of the group is working a minimum number of (usually 50 hours) each week.
False
Test your knowledge on life insurance policy applications, premiums, and functions. Explore questions related to policy loans, medical evidence, insurance company practices, and types of life insurance plans.
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