1.

Both endowment and term life policies provide that

d. Insurance protection will be limited to a specified period

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

a. To give details pertaining to non-forfeiture options

3. 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?

b. Absolute assignee

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

b. Discontinue premium payments

5. What are the basic settlement options?

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

6. An insurance company generally has the right to rescind a life insurance policy if

a. Company discovers at any time that the policy owner was actually a minor at the time of application

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

d. To provide additional income to the government through license fees

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

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

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

b. Presents satisfactory evidence of insurability

10. 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

c. Universal life

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

b. The insured has to die while disabled

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

c. Relates to the insurability of the applicant

13. Paid-up additions

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

c. A supplemental term rider

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

a. Estimate future death rates among members of a given group

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

a. Renew the coverage based on a higher premium

17. 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

d. Immediately provides interim insurance that remains in effect until the policy is issued or the application is declined

18. Endowment life insurance and term life insurance are similar in that both plans

c. Provide life insurance protection for only the period of time specified in the policy contract

19. An agent who determines a prospect’s complete financial requirements preparatory to offering him a policy using the correct selling
approach knows as

b. Total needs selling

20. Name the provision in a permanent life insurance policy under which premiums are discontinued, full insurance will be maintained for a
specified period:

a. Extended term insurance

21. Notwithstanding various possible legal impediments, if the owner of an endowment at age 65 policy tells you that 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?

c. Interest option

22. The extent of medical evidence required is determined by

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

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

c. Pressure selling

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

d. Government tax records

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

d. Valid unless the insurer can prove fraud

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

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

27. 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

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

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

c. More insurance protection for the same annual premiums outlay

29. In certain situations a company may file interpleader actions with a Court of Law This remedy is used to

b. Decide conflicting claims on the same insurance proceeds

30. Which of the following statement is false?

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

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

a. An individual on the life of his mistress

32. The basic coverage provided by the life insurance policies may be supplemented by a separate provision that provides coverage for
accidental amounts or of a different nature. Collectively these provisions are known as

a. riders

33. Which of the following statements regarding insurance premiums is false?

a. Cash is required for all premiums paid in the grace period

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

d. Discontinues premium payments for a whole life or endowment policy

35. If the interest on a policy loan is not paid at the policy anniversary the insurance company may

d. Increase the present loan by the interest

36. The incontestability clause

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

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

b. The insured can add a third beneficiary at any time

38. 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

c. The face amount adjusted for misstatement of age

39. If the interest on a policy loan is not paid at the policy anniversary the insurance company may

a. Increase the present loan by the interest

40. A yearly renewable term life insurance policy generally specifies that

b. Premiums shall increase every time the policy is renewed

41. The following statements concerning insurable interest are correct, except:

d. It is important for purposes of underwriting the risk.

d. Furnish evidence of insurability which satisfactory to the insurance company

43. 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

a. The face amount of the policy minus the unpaid premium

44. Life insurance guarantees cash benefits for all the following except

d. Educational fund

45. Under an endowment policy, if the person whose life is insured survives to the end

of the period stated in the policy, the

a. Face amount of the policy will be paid

46. 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 provision for the future

d. All of the above

47. A yearly renewable term life insurance policy generally specifies that

a. Premium shall increase every time the policy is renewed

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

a. Dividend will be reduced by the amount of the current interest

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

b. An entire contract clause

50. All of the following term policies can be sold as a basic policy contract except

a. Six months interim term

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

b. Examine the adequacy of the husband’s insurance coverage

______________________________________________________________________________

1. In a case where the premium has not been paid and the cash values has been exhausted, the policy can still avail of the grace period.

=false

2. 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

3. Anti-selection occurs when persons in poor health wish to buy insurance.

=true

4. 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

5. 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

6. A policy that provides guaranteed cash values plus extra annual distributions and pays the insured after a specified time is known as a
participating endowment.

=true

7. 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

8. An endowment at age 65 policy with premium payable for a limited period of 20 years pays the full amount after 20 years.

=false

9. In most life insurance applications, the largest amount of information requested is data which identifies the applicant.

=false

10. A policy is not rendered void by reason of misstatement of the assured’s death.

=true