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WorksheetsInsurance Commission Quiz
Total questions: 78
Worksheet time: 39mins
When a policy is assigned absolutely
The assignee acquires all the rights and interests of the original policyholder
The original policyholder still can exercise some of the rights
The original beneficiary is not changed
None of the above
If a policy did not contain the name of a beneficiary, the beneficiary will be
The wife
The children
The insured’s brothers and sisters
The insured estate
If the policyowner does not pay a premium on the due date, the policy will immediately
Lapse
Be converted to a paid-up policy for a lesser amount
Go into automatic premium loan
Continue in full force for a grace period
If a policyowner whose wife is the irrevocable beneficiary wishes to cash in his policy, he must
Tell his wife what he is going to do
First take a loan on the policy
Have the check issued in the name of his wife
Have the wife’s consent
Choose the incorrect statement: The entire contract between the policyowner and the insurance company include
The application and the policy
Any verbal statement made by the agent to the applicant
Any document attached to the policy when issued
Any subsequent written amendments to the contract
If a loan is taken on a participating policy, dividends for that policy while there is a loan against the policy will be
Suspended
Paid in a reduced rate
Unaffected
Increased
Interest is charged on policy loans
For registered policies only
If the loan is outstanding for more than a year, a loan repaid within a year is interest free
To replace investment income the insurer cannot earn since a loan has been granted
For participating policies only
An insurance plan which offers both protection and savings is called
Temporary plan
Permanent plan
Participating plan
Non-participating plan
A man with moderate means can have maximum protection possible through
20 Yr. Endowment
Limited pay life
Term insurance
Whole life insurance
Mr. Juan Valdez wants a policy which will entitle him to receive dividends yearly. What will you recommend to Mr. Valdez?
Participating plan
Non-participating Plans
Term insurance
None of the above
Which of the following can give the longest protection?
20 yr. Endowment
Endowment at 65
Ordinary life
20 yr term
In a 20 Life policy
Protection is until age 100, payment of premium is for 20 years
Protection is until age 100, payment of premiums until age 100
Protection is for 20 years, payment of premium is for 20 years
Protection is for 20 years, payment of premiums until age 100
A participating plan entitles the policyowner to receive a return of excess premiums. Such is termed as:
Endowments
Dividends
Cash values
Cash surrender value
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:
Ordinary Life
Limited Pay Life
Decreasing term
Level Term
Two attractive features of a term insurance are:
Convertibility and cash values
Cash values and dividends
Protection and dividends
Convertibility and renewability
A term insurance which allows the policyowners to convert it to a permanent insurance within a specified period without evidence of insurability contains__________feature:
Convertibility
Renewability
Dividend option
Both a & b
A term policy only offers
Cash values
Protection
Savings
Dividends
The main difference between a term plan and a permanent plan is
Permanent plans provide both protection and savings while term plans offer protection only
Permanent plans provide savings and dividends while term plans provide savings only
Permanent plans can be converted and renewed while term plans cannot
All of the above
A term rider is
A term policy with a waiver of premium
Another name for a convertible term policy
A renewable term policy
A term insurance added to a permanent plan
An optional rider which can be attached to a policy stopping further premium payments in the event of disability is called
Policyholder protection clause
Accidental death and dismemberment
Waiver of premium
Total disability monthly income
If a policy with the accidental death rider becomes paid-up
The accidental death rider ceases
The face amount of the policy is reduced
Premiums on the basic policy stop but the rider premium continues
None of the above
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
Receive the total disability income benefit and the waiver of premium
Receive partial disability benefits
Be granted the waiver of premiums
Receive neither disability income nor waiver of premiums
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
Term insurance rider
Guaranteed insurability rider
Accidental death rider
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
Cease
Continue at reduced rate
Continue as if the owner is paying the premium
Continue but they would be applied toward premium being waived
A policy with a minor as the proposed insured is called
Rated policy
Juvenile policy
Regular policy
Substandard policy
Life insurance policies for which higher than standard premium rates are payable are said to be
Rated policies
Contingent policies
Non-participating policies
Conditional policies
Which of the following factors would have the least effect on the premium charged for life insurance
Age
Occupation
Income
All of the above
Anti-selection occurs
When an agent thinks only of his own interest and not of his policyowners
When you purchase bad stocks with expectation that they will improve
When the insurance company accepts more than a share of poor risks
When persons in poor health wish to buy insurance
In insurance, risk means
Chances of you being paid by the company
Hazard on people’s lives
Chances of the beneficiary being paid
None of the above
Insurance companies have various sources of information and the insured. These are
Application form
Medical information bureau
Inspection report
All of the above
In insurance risks are classified as
Unacceptable and acceptable
Regular and irregular
Standard, substandard and declined
Complete and incomplete
Statement in the application forms are
Guarantees
Representation
Warranties
None of the above
Mr. Roel Reyes has been confined in a hospital for 3 years prior to his application for insurance. He therefore needs to give the following information
Name of attending doctor, diagnosis, date of confinement
The bill and medicines
Name of doctor only
Date of confinement only
Insurance companies have a source of confidential medical information on applicants for life insurance. This is the
Agents confidential report bureau
Inspection reports bureau
Financial standing bureau
Medical impairment bureau
An agent is filling up the Agent’s Confidential Report. What information must be put in his report?
Information about insured’s standing in the community
Information about insured’s finances
All information he knows which are material to the application for insurance
a & b only
An annuity plan
offers life insurance protection
offers the waiver of premium benefit
is the same as an endowment plan
is a purchase of income
The person who purchases the annuity plan is called the
assignor
owner
insured
annuitant
A life insurance company earns income from two main sources
premium income and investment income
mortgage income and premium income
dividend income and premium income
dividend income and interest income
mortgage income and dividend income
Policy reserves are future obligations on the part of
the insurance commission
the insurance company
the beneficiary
the policyowner
Stock companies are owned by
policyowners
stockholders
creditors
government
In the case of life insurance, a sale is considered completed if the application is signed and payment of the first premium is made by the applicant. For the sale to be considered completed
a medical examination has to be made first
payment of the first premium has to be made by the applicant in full or in part, as specified. One of the acceptable methods of settlement is by cash or check in part, with a note for the balance
payment of the first premium has to be made in full by a note first
the first premium has to be paid for in full and in cash
Why is it important that the application is the basis of the policy?
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
For the agent to have available data of his prospect in connection with future sales
To avoid the necessity of the insurer putting all relevant details in the contract
None of the above
Which one of the following statements is correct?
Advertising by life insurance agents is prohibited
All information about a client or a prospective client has to be treated as confidential
The agents should always recommend the amount and type of policy to a prospective client which would be profitable for the company
When an agent advertises his services to the press, he is not allowed to state the name of his company
Prior to granting a license, the IC requires proof of
A clean record of employment
A reasonable educational background
A prospective agent’s character and reputation
All of the above
The IC has the power to adjudicate insurance claims against companies for any single claim not exceeding
1,000,000.00
250,000.00
100,000.00
500,000.00
Which one of the following statements is correct?
Rebating of premiums can only be authorized by the head office of the insurer
A life insurance is not allowed to identify on his letterhead the name of the insurer he represents
Life insurance agents are allowed to act for two insurers at the same time under the same license
Rebating of premiums by an insurance agent is prohibited
Persuading a policyowner, directly or indirectly, to surrender or lapse a policy in one company and replacing it with a policy in another company is
Rebating
Twisting
Knocking
Discounting
Rebating is
Dating the policy a month in advance
Giving false information
Twisting
Premium discrimination against policyholders
An insurance agent’s license can be revoked for
Fraudulent practices
Violation of any provision of the insurance code
Misrepresentation in the application for license
Any or all of the above
The term knocking means
Promising to pay two annuitants a fixed annual income as long as both survive
Making derogatory remarks about competing underwriters or companies
The number of years that person at a given age will live on the average as shown by the mortality table
None of the above
The following are unethical practices in the solicitation and procurement of insurance except
Misleading estimates of the dividends or shares of surplus to be received thereon
Inducing a policyholder to lapse, forfeit or surrender a policy he holds for another company
Misrepresenting the terms of any policy issued by any insurance company or the benefits or advantages promised thereon
Obtaining or attempting to obtain a license by fraud or misrepresentation
Twisting is
Paying the premium on one policy by surrendering the dividends of another policy
The replacement of a policy in one company with another policy in another company
An attempt made by an insurance company to secure the services of an agent from another company
An offense which does not apply to variable concepts
The misstatement of facts by either of the parties of insurance to the other whether in writing or orally preliminary and in reference to making the insurance contract is
Knocking
Overloading
Misrepresentation
Twisting
Selling a person more insurance than what is warranted by his sources is called
Overloading
Twisting
Rebating
Knocking
Inducing an insured to lapse or forfeit his insurance
Is not allowed by the conditions of the contract
Is always to the advantage of the policyholder
Is an offense in the great majority of cases
Is a matter left entirely to the discretion of the agent
The suicide clause is in effect for
The first 6 months
The first year
The first 2 years
The first 18 months
The three non-forfeiture values in a permanent policy are
Cash dividends, bonus additions and extended term insurance
Cash surrender value, loan value, assignment
Waiver of premium, reinstatement and the policy loan
Cash surrender value, paid value, extended term insurance
In the event that a policy elects the paid-up insurance option
The premiums stop and the policy continues for the full face amount until age 65
The premiums cease and protection continues with a reduced amount of coverage
The insurance continues with a reduced amount and a reduced premium
The policy will automatically terminate
In case of misstatement of age
The policy is cancelled and a new one is issued for the correct age
The insured can be changed
The amount of insurance is adjusted to the amount which the premium paid at the correct age would have purchased
The policy remains in force and the company cannot contest it
Which one of the following is not derived from the non-forfeiture values
Cash surrender value
Paid-up insurance
Dividends
Extended term insurance
Mr. Dela Cruz stated in his application that he was 30 years of age and a policy was issued to him on that basis. When he died twenty years later it was found out that, in fact, he was 34 years of age at the time of his application. In conformity with the Insurance Code, the company
Paid the amount of insurance payable to his beneficiary reduced in relation to his actual age at the time the contract was signed
Paid one-half of the face value of the policy
Need not pay the face value of the policy, but refund all premiums paid
Paid the full face value of the policy without any extra charges
If a policyowner commits suicide within one year. What’s the company’s liability?
The company is not liable at all
The company would be liable for the payment of the face value of the policy
The company would be liable for the payment of the premiums paid by the insured only
None of the above
Which of the non-forfeiture option gives the largest amount of protection?
Fully paid insurance
Cash surrender value
Extended term insurance
All of the above give equal protection
Any policy which has lapsed can be reinstated subject to normal conditions of proof of insurability within
Three years
Six months
One year
Two years
Life insurance is
A luxury afforded by the rich
Only available to a specific group
A cooperative risk sharing plan
A speculative risk
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
Life agent
Senior statistician
Insurance commissioner
Actuary
Since the purchase of life insurance is a voluntary choice the individual must meet
A comprehensive inspection
Certain standards of health and occupation
A satisfactory medical examination
A minimum income figure
The fundamental advantage of the use of insurance as means of meeting economic losses is that through insurance these losses are
Spread over a large number of people
Deferred for a specified period of time
Reduced for the group as a whole through the multiplier effect
Met as they arise through savings accumulated on an assessment basis
The term loading means
The difference between the gross and net premiums for the purpose of paying the insurance overhead expenses including commissions and taxes
The amount which the company will lend to the policyholder with the policy as a security
The amount payable in the event of the occurrence of a loss which renders him unfit for insurance
None of the above
Life insurance can provide money when income stops because of
Disability
Death
Retirement
All of the above
The three elements that make up a life insurance premium are
Mortality experience, investment earnings and operating expenses
Cash values, dividends and paid up values
Cash values, loan values and paid up values
Past dividend experience, present dividend and projected interest
The number of years that persons at a given age will live on the average as shown by the mortality table is called
Law of large numbers
Life income option
Life annuity
Life expectancy
Part of the premium paid by a policyholder is invested by the insurance company. In premium computation, this factor is known as
Interest
Investment
Loading
Mortality
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
Indicate which of the following is not a function of an application 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
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
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
Which of the following is the least important reason for requiring that insurance agents is 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
