Life Insurance Questions PDF

1. A single premium policy means a policy a. requiring only a single premium each year b. under which only one premium payment is required c. only available to single individuals d. on which no more than one premium can be paid in advance 2. A fixed amount added to the premium of a premium give...

1. A single premium policy means a policy a. requiring only a single premium each year b. under which only one premium payment is required c. only available to single individuals d. on which no more than one premium can be paid in advance 2. A fixed amount added to the premium of a premium given policy regardless of policy size is known as a. policy fee b. policy reserve c. policy values d. extra premium 3. To be able to calculate the required premiums for a given policy, the agent must know the applicant's a. age b. choice of plan c. face amount desired d. all of the above 4. To calculate premiums for the other modes of premium payment, the annual premium is a. divided by the desired number of premium payments b. divided by a conversion factor for the mode of c. multiplied by a conversion factor for the mode of payment desired d. multiplied by a constant conversion factor 5. A father enters into a life insurance contract on behalf of his child. In this case, the father is the a. insured b. beneficiary c. insurer d. applicant-owner 6. The convertible feature of a term insurance policy provides that the policy may be a. changed to a permanent insurance policy without evidence of insurability b. changed to another life c. cashed for a guaranteed sum d. changed to permanent insurance with evidence of insurability 1|Pa ge 7. Within two years of buying a life insurance policy, you are accidentally killed when your car hits a tree. In these circumstances, the insurance company will a. refund premiums because it is suicide b. pay double the face amount c. pay the face amount d. pay nothing 8. When explaining dividends, the following information must be supplied a. that they are not quarantood b. the dividends paid up in the previous years c. the anticipated dividends d. the relation to the cost of the policy 9. Part of the premium paid by a policyholder is invested by the insurance company. In premium computation, this factor is known as a. interest b. investment c. loading d. mortality 10. The parties involved in a life insurance contract are the a. insurance company and agent b. insurance company and insured c. agent and insured d. insured and beneficiary 11. The fundamental advantage of the use of insurance as a means of meeting economic losses is that through insurance, these losses are a. Spread over a large number of people b. Deferred for a specified period of time c. Reduced for the group as a whole through the multiplier effect d. Met as they arise through savings accumulated on an assessment basis. 12. Life Insurance contributes directly to the welfare and progress of the country by a. Accumulating capital for investment in commerce and industry b. Partially relieving the community of the care of dependents c. Encouraging provisions for the future d. All of the above 2|Pa ge 13. The number of years that persons at a given age will live on the average as shown by the mortality table is called a. Law of large numbers b. Life income option c. Life annuity d. Life expectancy 14. An Insurance plan which offers protection and savings is called a. temporary plan b. permanent plan c. participating plan d. term plan 15. A man with moderate means can have maximum protection possible through a. 20 yr, endowment b. Limited pay life c. Term insurance d. Whole life insurance 16. Mr. Juan Valdez wants a policy which will entitle him to receive dividends yearly. What will you recommend to Mr. Valdez? a. participating plans b. non-participating plans c. term insurance d. none of the above 17. Which of the following can give the longest protection? a. 20 yr. endowment b. Endowment at 65 c. Ordinary life d. 20 yr. term 18. An individual at age 35 purchases a policy under which he will in 20 years receive the face amount of the policy himself, if he is still alive at that date. This policy is obviously a a. 20 vr. endowment b. 20 pay life c. 20 yr. term d. None of the above 19. In a 20 life policy, 3|Pa ge a. protection is until age 100, payment of premiums is for 20 years b. protection is until age 100, payment of premiums until age 100 c. protection for 20 years, payment of premium is for 20 years. d. protection is for 20 years, payment of premiums until age 100 20. A participating plan entitles the policyowner to receive a return of excess premiums. Such is termed as: a. endowments b. dividends c. cash values d. cash surrender value 21. Mrs. Rose Cortez owns a policy which does not provide for the build up of cash values and whose premiums remain level. Mrs. Cortez owns: a. ordinary life b. limited pay life c. decreasing term d. leveltem 22. Two attractive features of a term insurance are: a. convertibility and cash values b. cash values and dividends. c. protection and dividends d. convertibility and renewability 23. A term insurance which allows the policyowners to convert it to a permanent insurance within a specified period without evidence of insurability contains features: a. convertibility b. renewability c. dividend option d. both a & b 24. A term policy only offers a. cash values b. protection c. savings d. dividends 25. The main difference between a term plan and a permanent plan is a. permanent plans provide both protection and savings while term plans offer protection only 4|Pa ge b. permanent plans provides savings and dividends while term plans provide savings only c. permanent plans can be converted and renewed while term plans cannot d. all of the above 26. The savings element of permanent plans allows for the build up of a. dividends b. cash values c. maturity benefits d. death benefits 27. A term rider is a term policy with a waiver of premium b. another name for a convertible term policy c. a renewable term policy d. a term insurance added to a permanent plan 28. An optional rider which can be attached to a policy stopping further premium payments in the event of disability is called a. policyholder protection clause b. accidental death and dismemberment c. waiver of premium d. total disability monthly income 29. For the waiver of premium to be effective, a. disability must be total b. disability must be permanent c. both a&b d. either a or b 30. Disability benefits are not paid a. for self-inflicted injuries b. if there is a loan against the policy c. if all the policy dividends have been withdrawn d. if disability resulted from sickness only 31. Mr. Pedro Cruz became paralyzed as a result of jumping out of the window in an attempt to commit suicide. Under the usual provisions of a disability income policy, he would be entitled to a. receive the total disability income benefit and the waiver of premiums 5|Pa ge b. receive partial disability benefits c. be granted the waiver of premiums d. receive neither disability income nor waiver of premiums 32. A person wanting a greater coverage for the least amount of premium has an option of attaching what rider in his permanent life policy? a. waiver of premium b. term insurance rider c. guaranteed insurability rider d. accidental death rider 33. One supplementary benefit offered is a payor's benefit which is intended a. to provide for the return premiums to an adult payor in the event that a minor insured dies b. to provide a waiver of premium benefit in the event of death or disability of the person paying the premiums c.to allow the insurance company to pay the policy's proceeds to the person who seems equitably entitled to the proceeds d. to assure that the adult payor will retain a vested interest in the policy when the insured reaches the age of majority 34. If an insured is disabled and his life insurance policy is being continued in force through the waiver of premium, the dividends of the policy would a. cease b. continue at reduced rate c. continue as if the owner is paying the premium d. continue but they would be applied toward premium being waived 35. A policy with a minor as the proposed insured is called a. rated policy b. juvenile policy c. regular policy d. substandard policy 36. Life insurance policies for which higher than standard premium rates are payable are said to be a. rated policies b. contingent policies c. non-participating policies d. conditional policies 37. Since the purchase of life insurance is a voluntary choice, the individual must meet a. comprehensive inspection report b. certain standards of health and occupation 6|Pa ge c. minimum income requirement d. all of the above 38. Which of the following factors would have the least effect on the premium charged for life insurance? a. age b. occupation c. income d. all of the above 39. Insurance Companies have various sources of information about the insured. These are a. application form b. medical information bureau c. inspection report d. all of the above 40. Anti-selection occurs. a. when an agent thinks only of his own interest and not of his policyowners b. when you purchase a bad stocks with expectation that they will improve c. when the insurance company accepts more than as share of poor risks d. when person in poor health wish to buy insurance 41. In insurance, risk means a. chances of you being paid by the company b. hazard on people's lives c. chances of the beneficiary being paid d. none of the above 42. In an application, the information that must disclosed include a. only his date and place of birth b. only his family history c. every fact in his knowledge that is material to the insurance d. only information he wants the agent to know 43. In insurance, risks are classified as a. unacceptable and acceptable b. regular and irregular c. standard, substandard and declined 7|Pa ge d. complete and incomplete 44. A risk is considered substandard based on any or all of the following criteria: a. death, occupation and moral character b. occupation, moral character and family health history c. income, educational attainment and occupation d. death, income and educational background 45. A hazardous occupation could be defined as a. an occupation the duties of which expose the insured to a degree of danger of sustaining injury b. an occupation in unhealthy working conditions exposing the insured to elements which can cause sickness c. an occupation which exposes the insured to social hazards d. all of the above 46. Statements in the application forms are a. guarantees. b. representations c. warranties d. none of the above 47. An agent is filling up the Agent's Confidential Report. What information must he put in his report? a. information about insured's standing in the community b. information about insured's finances c. all information he knows which are material to the application for insurance d. a & b only 48. Mr. Roel Reyes has been confined in a hospital 3 years prior to his application for insurance. He therefore needs to give the following information a. name of attending doctor, diagnosis, date of confinement b. the bill and medicines c. name of doctor only d. date of confinement only 49. Insurance companies have a source of confidential medical information on applicants for life insurance. This is the a. agent's confidential report b. inspection report c. financial standing d. medical impairment bureau. 8|Pa ge 50. Insurance companies which are owned by the policy-owners are examples of a. stock companies b. mutual companies c. family corporation d. open-end companies 51. Stock companies are owned by a. policy-owners b. stockholders c. creditors d. government 52. Why is it important that the application is the basis of the policy? a. because the completed application is the basis of the policy contract and the company may accept or reject an application based on the information given in the application b. for the agent to have available data of his prospect in connection with future sales c. to avoid the necessity of the insurer putting all relevant details in the contract d. none of the above 53. Which of the following statements is correct? a. advertising by life insurance agents is prohibited b. all information about a client or a prospective client has to be treated as confidential c. the agents should always recommend the amount and type of policy to at prospective client which would be profitable for the company d. when an agent advertises his services in the press, he is not allowed to state the name of his company 54. Choose the incorrect statement: The entire contract between the policyowner and the insurance company include a. the application and the policy b. any verbal statement made by the agent to the applicant c. any document attached to the policy when issued d. any subsequent written amendments to the contract 55. Life Insurance is a. Luxury afforded by the rich b. Only available to a specific group c. A cooperative risk-sharing plan d. A speculative risk. 9|Pa ge 56. A life insurance company earns income from two main sources a. premium income and investment income b. mortgage income and premium income c. dividend income and interest income d. mortgage income and dividend income 57. The official who makes the necessary assumption and calculation in respect of the principal elements in life insurance premium in order to arrive at the premium rates to be charged is the a. Life agent b. Senior statistician c. Insurance Commissioner d. Actuary 58. The term "Loading" means a. The difference between the gross and net premiums for the purpose of paying the insurance overhead expenses including commissions and taxes b. The amount which the company will lend to the policyholder with the policy as a security c. The amount payable in the event of the occurrence of a loss which renders him unfit for insurance d. None of the above 59. Life Insurance can provide money when income stops because of a. Disability b. Death c. Retirement d. All of the above 60. The three elements that make up a life insurance premium are a. Mortality experience. Investment earnings, and operating expenses b. Cash values, dividends, and paid up values c. Cash values, loan values, and paid up values d. Past dividend experience, present dividend, and projected interest 10 | P a g e