Mr. Alvarez bought a Pl 50,000 policy with a 20-year reducing term rider. He died 5 years after the policy issue date. After his death, his wife received P 150,000 and a monthly income thereafter for 15 years. This definitely has a

Combination of whole life and level term insurance

Disability benefits are not paid

if there is a loan against the policy

if all the policy dividends have been withdrawn

if disability resulted from sickness only

A hazardous occupation could be defined as

an occupation the duties of which expose the insured to a degree of danger of sustaining injury

an occupation in an unhealthy working condition exposing the insured to elements which can cause sickness

an occupation which exposes the insured to social hazards

An agent fills out the Agent's Confidential Report. What information must he put in his report?

all information he knows which are material to the application for insurance

information about insured's standing in the community

information about insured's finances

Most life insurance agents are expressly authorized to perform the following functions:

solicit applications for insurance, accept the initial premium and issue a receipt on behalf of the insurance company

solicit and approve the applications of the proposed insured

accept initial premium and waive the insurable interest requirement

Appraise the applicants and decide on a standard or sub-standard rating

An agent is prohibited from doing all of the following except:

make complete comparisons of policies he sells and those offered by competing insurance companies.

alter an application without the applicant's prior written approval.

convince a prospective client to cancel his policy in one insurance company in order to buy a policy in the insurance company represented by the agent

refund some of his commission to his client.

The convertible feature of a term insurance policy provides that the policy may be

changed to a permanent insurance policy without evidence of insurability

changed to permanent insurance with evidence of insurability

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

continue as if the owner is paying the premium

continue but they would be applied toward the premium being waived

All of the following statements regarding a life insurance application are correct except:

statements made on the application are warranties

misstatement of material facts could void the policy during the contestable period

it must be signed by the applicant

usually, it will be made part of the policy

a cooperative risk-sharing plan

only available to a specific group

paid-up insurance (reduced amount)

The guaranteed cash value is

the amount that the company will pay if the policy is surrendered

the amount that can be borrowed at any time

the paid-up value of the policy

In a child insurance policy, the Parent Waiver Clause provides that:

the premiums are waived if the father is disabled or dies

if the father dies, the policy becomes reduced or paid-up

if the child becomes disabled, no further premiums are required

all premiums are refunded when the father reaches the age of 60.

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

to provide additional income to the govemment through license fees

to establish and maintain high professional and ethical standards

to give the govemment adequate control over the conduct of agents

The basic of a conditional premium receipt is to acknowledge payment of the initial payment of the premium for life insurance and to

provide insurance coverage earlier than the policy delivery date if certain requirements are met

eliminate the need for acceptance of the offer in forming the contract

guarantee that a policy will be issued as applied for

backdate the policy to save age

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

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

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

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

A living benefit in an insurance policy is

the guaranteed insurability benefit

the right to change beneficianes

the waiver of premium for disability

Under the law pertaining to life insurance

any person with insurable interest can be named irrevocable beneficiary

only minor children can be named irrevocable beneficiaries

only the wife can be named irrevocable beneficiary

only the wife and the children can be named irrevocable beneficiaries

Insurable interest is necessary when a person insures another

to establish that there is a genuine risk

so that the person being insured may be properly appraised

because interest on premiums must be earned

to make sure that he will pay the premiums

A policyholder may obtain money from the insurance company and still remain insured by

surrendering the policy for its cash value

discontinuing payment of premium for some period

taking the extended insurance option

An automatic premium loan differs from the other policy loans in that an automatic premium loan

goes into effect requiring no separate action from the policyowner

need not be repaid by the policy owner

must be repaid during the policy year in which it is granted

involves higher interest payments because of the greater cost of administration

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 insurance company will pay

the face amount adjusted for misstatement of age

slightly less than the face amount

Mr. Lorenzo and his primary beneficiary die in a common accident It is established that the primary beneficiary died ahead of Mr. Lorenzo and there are no contingent beneficiaries named. The proceeds of Mr. Lorenzo's life insurance policy will be paid to

the estate of the primary beneficiary

both the estates of the insured and the primary beneficiary on a 50/50 percent basis

Which of the following are requirements in reinstating a policy after it has lapsed for non-payment of premiums?

Payment of all overdue premiums

Application for reinstatement within the specified time

Evidence of insurability and payment of interest on overdue premiums

Which of the following statements regarding insurance premiums is false?

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

The grace period is usually 30 days

Cash is required for all premiums paid during the grace period

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

An insured misstated his age by 3 years in the application indicating that he was younger than his actual age. If he dies 10 months later, the insurance company will

pay the benefits that the premium would have purchased at the correct age

refund the premium paid plus interest

The grace period provision in life insurance policies is designed to

give the insured more time to pay the premium while coverage remains in force

compel the insured to pay premiums more promptly

permit the company to extract extra charges

terminate the contract of insurance automatically

In most cases, policy loan which has not been repaid at the time of the insured's death will be

deducted from the proceeds of the policy when the death claim is paid

charged to the person responsible for paying the debts of the insured

collected from the life insurance company's reserve

written off against the insurance company under the terms of the premium loan repayment

Mr. Jesus Gonzales carried a P500,000 whole life policy for 25 years, never borrowed from it, but forgot to pay premiums before leaving for a four-month vacation to the USA. On his return trip, he was killed in a plane crash. As his estate executor, you saw the lapse notice received from the insurance company for this whole life policy. What action should you take?

Investigate to see if the insured elected Premium Loan as a non-forfeiture option

None, since the policy has lapsed from non-payment of premium and benefits are not paid

Apply for the face amount if the policy is to be paid to the beneficiary since coverage would have been afforded under the extended term insurance non-forfeiture option

Apply for the cash value of the policy under the non-forfeiture option

In personal accident and/or sickness contracts, "blanket policies" refer to

group insurance covering loss from specific hazards, incidental to or related to particular activities

insurance for all types of hospital and health care expenses

All of the following statements about group insurance are true except:

most group policies pay dividends to employer

each covered employee receives a policy

a covered employee who terminates his employment continues to be covered for 31 days after termination date

in a noncontributory plan, 100% of the group members must be covered

A client tells you that his bank wants him to use his life insurance policy so that his bank loan will be paid off if he dies. You recommend that he

appoints an irrevocable beneficiary

Anne Santos is designated as the irrevocable beneficiary of a policy owned by her father on his life. Therefore, unless Anne consents, her father is not permitted to

make an effective assignment of the policy

change the frequency of the premium payments

discontinue the premium payments

Instead of taking a lump sum settlement under a policy, the insured or the beneficiary can elect to take a

new single premium life insurance policy

All of the following are standard provisions of a life insurance policy except

an automatic premium loan clause

VUL 1

Authored by Aaron Ravago

Professional Development

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MULTIPLE CHOICE QUESTION

2 mins • 1 pt

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 provisions for the future

all of the above

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

One supplementary benefit offered is a payor's benefit which is intended to

provide for the retum of premiums to an adult payor in the event that a minor insured dies

provide a waiver of premium benefit in the event of death or disability of the person paying the premium

allow the insurance company to pay the policy's proceeds to the person who seems equitably entitled to the proceeds

assure that the adult payor will retain a vested interest in the policy when the insured reaches the age of majority

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

A whole life policy with an initial premium rate that applies to the first 5 years of the policy and a higher premium rate that applies to the remainder of the premium-payment period is known as

an extended life policy

a modified life policy

an experience-premium policy

a guaranteed renewable policy

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

A risk is considered substandard based on any or all of 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

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

The only instance when a life insurance contract is treated primarily as an indemnity agreement is when a

person insures the life of a friend

creditor insures the life of his debtor to protect himself

person insures the life of his or her spouse to protect against the loss of income earned by the spouse

person in a partnership insures the life of his panner to protect the firm against loss due to the death of that parmer

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

Which of the following describes the convertible feature of a term insurance policy?

It may be changed to another term insurance policy without evidence of insurability

It may be changed for a guaranteed sum

It may be changed to another whole life policy

It may be changed to a permanent insurance without evidence of insurability

MULTIPLE CHOICE QUESTION

2 mins • 1 pt

A policy which permits the policyholder to vary the level of premium or the sum insured, and has its cash values dependent investment performance and the level of premiums paid is known as a(an) _________ policy.

participating whole life

term with advance premium deposit provision

annuity

universal life

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VUL 1

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

One supplementary benefit offered is a payor's benefit which is intended to

A whole life policy with an initial premium rate that applies to the first 5 years of the policy and a higher premium rate that applies to the remainder of the premium-payment period is known as

A risk is considered substandard based on any or all of the following criteria

The only instance when a life insurance contract is treated primarily as an indemnity agreement is when a

Which of the following describes the convertible feature of a term insurance policy?

A policy which permits the policyholder to vary the level of premium or the sum insured, and has its cash values dependent investment performance and the level of premiums paid is known as a(an) _________ policy.

A policy which affords coverage for uto or more persons simultaneously with the face amount of the policy payable when any of the insured dies at which time the policy terminates automatically is known as a

The savings element of permanent plans allows for the build up of

Mr. Alvarez bought a Pl 50,000 policy with a 20-year reducing term rider. He died 5 years after the policy issue date. After his death, his wife received P 150,000 and a monthly income thereafter for 15 years. This definitely has a

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