In the event that a policy owner elects the paid-up insurance option

The premiums cease and protection continues with a reduced amount of Coverage

The premiums stop and the policy continues for the full face amount until age 65

The insurance continues at a reduced amount and with a reduced premium

The policy will automatically terminate

The company will allow a policy change from a higher premium to a lower premium provided the insured

Presents satisfactory evidence of insurability

Momentarily assigns the policy to the company

Obtains written consent from his or her spouse

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

Participating whole life policy

Which of the following statements about “ Disability Waiver of Premium Rider” is false?

The insured has to die while disabled

Disability must occur before a stated date

It has to be attached to a life insurance policy

In most life insurance applications, the largest amount of information requested is data which

Relates to the insurability of the applicant

Describes the type of insurance applied for

Describes the desired benefits and mode of payment

Affect both cash and loan value of the policy

Don’t affect the cash value of the policy

Don’t affect the loan or cash value of the policy

Only affect the cash value of the policy

The total life coverage of a permanent basic policy can be greatly increased through the use of

An accidental death benefit rider

Life insurance companies make use of the laws of probability in order to

Estimate future death rates among members of a given group

Predict when an individual insured will die

Develop statistics of past deaths among the general population

Determine the experienced death rate among the insured persons

In the case of renewable term insurance, the policy owner may

Renew the coverage based on a higher premium

Change the life insured at renewal date

Renew providing the insurance company agrees to continue coverage

Renew at the same premium for further period of years

A man applied for a Ps. 20,000 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

Offers permanent insurance coverage effective as of the date of the application

Promises that the insurance coverage will become effective as of the date the application is approved

Guarantees the policy will be issued as applied for

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

Build up cash value rapidly in the early policy years

Provide for payment of the face amount if the insured is alive at the end of the specified period

Contain provisions for automatic continuation of the insurance protection at the end of a specified period

The extent of medical evidence required is determined by

The age of the applicant and the proposed sum to be insured

Financial condition of the applicant

Date of the last medical examination

The conservation of a life insurance policy is dependent on all the following except

The level of first year commission

Agent’s service oriented attitude

The use of effective needs selling

All of the following are sources of information to an insurance company pertaining to the insurability of an applicant except

The applicant’s personal appearance

If the applicant for life insurance fails to disclose or misrepresents material fact, the contract is

Valid unless the insurer can prove fraud

Valid if the insurer issues a policy which is delivered to the applicant

Voidable by the insurer if it has been in force less than 2 years

The settlement options provision may provide all of the following except:

Proceeds held by the company, with interest payable to the beneficiary on request

Payment of the proceeds for the life of the insured

Payment of the proceeds over a fixed period

Payments of the proceeds in fixed amounts until exhausted

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

Any guaranteed policy values will belong to the policy owner even if premium payments are discounted

No death claim will be denied for any misstatement on the application

The face amount of the policy will remain the same even if the insured’s health becomes impaired

The premium on the policy will remain the same even when another beneficiary is added to the policy

Purchasing a continuous-premium, whole life policy rather than a limited payment, whole life policy gives the policyowner the advantage of

More insurance protection for the same annual premiums outlay

Concentration of premium payments during the period of highest Earnings

Liberal risk selection procedures

More rapid accumulation of cash values

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

Determine if the cause of the insured’s death was an excluded risk

Resolve the question of insurable interest

Recommend the best settlement options for the beneficiary If the interest on a policy loan is not paid at the policy anniversary the insurance

Which of the following statement is false?

Because of its very short duration the cash value of a yearly renewable term policy grows very fast

The cash value of a whole life policy builds up at a slower rate than for a 20 year endowment

The cash value in a permanent policy is guaranteed by the company

The cash value of an endowment builds up faster than that for a limited pay life policy of the same duration

Which of the following does not have a legitimate insurable interest?

An individual on the life of his mistress

An individual on the life of his spouse

A finance company on the life of its borrower

Which of the following statements regarding insurance premiums is false?

Cash is required for all premiums paid in the grace period

A premium is the legal consideration needed to affectuate a life insurance policy

The grace period is usually 31 days

Premiums which are paid quarterly or semi-annually are higher than those paid annually

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

Demand full settlement of the loan

Refuse to grant future additional loan

A non-forfeiture option would ordinarily be selected at the time a policyowner

Discontinues premium payments for a whole life or endowment policy

Converts a term policy to a whole life policy

Chooses a mode of settlement for the life proceeds

The incontestability clause

Prevents the company from denying a claim after the policy has been in force for 2 years

Gives the company the right to rescind a policy at any time

Permits the company to pay claims within 2 years

Makes it necessary for the beneficiary to present proof of death in the event of a death claim

The insured named a primary and secondary revocable beneficiary for Ps. 20,000 policy. Which of the following is correct?

The insured can add a third beneficiary at any time

The designation of a contingent beneficiary is subject to the primary beneficiary’s approval

Any policy loan assignment will require the primary beneficiary’s signature

Upon the insured’s death the primary and secondary beneficiaries shall each receive Ps. 10,000

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

The face amount adjusted for misstatement of age

Slightly less than the face amount

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

Refuse to grant future additional loan

Demand full settlement of the loan

A yearly renewable term life insurance policy generally specifies that

Premiums shall increase every time the policy is renewed

The policyowner may renew the policy only once

Evidence of insurability shall be required every renewal

Cash values will increase for as long as the policy is in force

The following statements concerning insurable interest are correct, except:

It is important for purposes of underwriting the risk.

Everyone has an insurable interest in his own life.

It is deemed to exist by virtue of a relationship by blood or marriage.

It is deemed to exist if economic loss would occur at the death of the insured.

One requirement a policyowner must meet in order to reinstate a life insurance policy is to

Furnish evidence of insurability which satisfactory to the insurance company

Agree to apply future policy dividends toward the payment of premium

Assign the policy collaterally to the insurance company for the amount of the overdue premiums plus any outstanding policy loan

Pay future premiums at the rate for his or her attained age at the time of reinstatement

If the person whose life is insured dies during the grace period and the premiums was not paid, the amount that the insurance company will pay to the beneficiary is usually the

The face amount of the policy minus the unpaid premium

Cash surrender value of the policy minus the unpaid premium

Total premiums paid up to the data of birth plus interest

Life insurance guarantees cash benefits for all the following except

Family dependency period income

Under an endowment policy, if the person whose life is insured survives to the end of the period stated in the policy, the

Face amount of the policy will be paid

The extended term insurance option will go into effect

Policy will terminate without value

Policy will automatically be converted to paid-up whole policy

Life insurance contributes directly to the welfare and progress of the country by

Accumulating capital for investment in commerce and industry

Partially relieving the community of the care of dependents

Encouraging provision for the future

A yearly renewable term life insurance policy generally specifies that

Premium shall increase every time the policy is renewed

Cash values will increase for as long as the policy is in force

Evidence of insurability shall be required every renewal

The policyowner may renew the policy only once

Which statement is false when the owner borrows on a policy?

Dividend will be reduced by the amount of the current interest

The proceeds of the policy will be reduced by the amount of unpaid loan plus interest, if insured dies

The policy will lapse if, after reasonable notice the indebtedness exceeds the cash value

If a large loan is taken after the policy has been in force for some years, the interest cost may exceed the premium

All of the following are Standard Provision of a life insurance policy except:

An automatic premium loan clause

A housewife without gainful employment applies for a P500,000 life coverage. Which of the following should the agent do?

Examine the adequacy of the husband’s insurance coverage

Tell her she has no need for it

IC Reviewer- Traditional

Authored by M Bernardino-Claudio

Professional Development

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61 questions

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MULTIPLE CHOICE QUESTION

1 min • 1 pt

Both endowment and term life policies provide that

No cash value is available to the policy owner during the term of the policy

Renewal and conversion privileges are available

A benefit will be paid at the end of the period of coverage if the person is then alive

Insurance protection will be limited to a specified period

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Indicate which of the following is not a function of an application for life insurance policy.

To give details pertaining to non-forfeiture options

To furnish information on which the contract of life insurance may be written

To furnish initial information as to insurability

To convey to the company the desire of the applicant to obtain insurance

MULTIPLE CHOICE QUESTION

1 min • 1 pt

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?

Irrevocable primary beneficiary

Absolute assignee

Irrevocable secondary beneficiary

Revocable primary beneficiary

MULTIPLE CHOICE QUESTION

1 min • 1 pt

A policy where an irrevocable beneficiary has been designated the insured, without the beneficiary’s permission, can

Avail of a non-forfeiture option

Discontinue premium payments

Borrow minimal cash loan

Alter the dividend option now in effect

MULTIPLE CHOICE QUESTION

1 min • 1 pt

What are the basic settlement options?

Policy loan, guaranteed insurability

Cash surrender value, automatic premium loan

Fixed amount, fixed period, life income, interest on deposit

Double indemnity, total and permanent disability waiver

MULTIPLE CHOICE QUESTION

1 min • 1 pt

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

Insured person intentionally kills himself during the suicide exclusion period specified in the policy

Insured person is killed in military action during the contestable period of the policy

Company discovers during the contestable period that the application contains a material statement.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Which of the following is the least important reason for requiring that insurance agents be licensed?

To establish and maintain high professional and ethical standards

To protect the public

To give the government adequate control over the conduct of agents

To provide additional income to the government through license fees

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