MODULE QUIZ

Module 1 – Foundations of Life Insurance

1. A fixed amount added to the premium of a given policy regardless of policy size is known
as

a. policy fee
b. policy reserves
c. policy values
d. extra premium

2. 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

3. To calculate premium 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 a conversion factor for the mode of payment desired
c. multiplied by a conversion factor for the mode of payment desired
d. multiplied by a constant conversion factor

4. 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

5. 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 Commisioner
d. Actuary

6. 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

7. 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
8. 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

9. Life insurance can provide money when income stops because of

a. disability
b. death
c. retirement
d. all of the above

10. 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

11. The number of years that persons at a given time 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

12. Part of the premium paid by a policyholder is invested by the insurance company. In
premium computation, this factor is know as

a. interest
b. investment
c. loading
d. mortality

13. A person’s human economic value is defined as the

a. Total value of his physical assets.

b. Total value of assets and any future earnings derived therefore.
c. Total value of the individual’s tax contribution to the national economy.
d. None of the above

14. A clean-up fund would be used to provide for all the following except

a. Burial expenses
b. Outstanding personal loans
c. Life income for the widow
d. Last illness expenses

15. A life insurance program is defined below as

a. A computer illustration of cash values and other policy details

b. An agency training schedule
c. A hardworking agent’s typical working day
d. A planned insurance estate
 MODULE QUIZ
Module 2 – Basic Plans

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. An insurance plan which offers both protection and savings is called

a. Temporary plan
b. Permanent plan
c. Participating plan
d. Non-participating plan

3. A man with moderate means can have maximum protection possible through

a. 20 Year Endowment
b. Limited Pay Life
c. Term Insurance
d. Whole Life Insurance

4. Mr. Jun Lacson wants a policy which will entitle him to receive dividends yearly. What will
you recommend to Mr. Lacson?

a. Participating plan
b. Non-Participating plan
c. Term Insurance
d. None of the above

5. Which of the following can give the longest protection?

a. 20 Year Endowment
b. 20 Pay Life
c. Ordinary Life
d. 20 Year Term

6. 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 Year Endowment
b. 20 Pay Life
c. 20 Year Term
d. None of the above

7. In a 20 Life Policy

a. protection is until age 100, payment of premium is for 20 years

b. protection is until age 100, payment of premiums is until age 100
c. protection is for 20 years, payment of premiums is for 20 years
d. protection is for 20 years, payment of premiums is until age 100
8. 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

9. Mrs. Lucia Torres owns a policy which does not provide for the build up of cash values
and whose premiums remain level. Mrs. Torres owns a/an

a. Ordinary Life
b. Limited Pay Life
c. Decreasing Term
d. Level Term

10. 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

11. A term insurance which allows the policyowners to convert it to a permanent insurance
within a specified period without evidence of insurability contains ___________ feature.

a. convertibility
b. renewability
c. dividend option
d. both a & b

12. A Term policy only offers

a. cash values
b. protection
c. savings
d. dividends

13. 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
b. permanent plans provide 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

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

a. dividends
b. cash values
c. maturity benefits
d. death benefits

15. A Term rider is

a. 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
 MODULE QUIZ
Module 3 – Supplementary Contracts

1. 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

2. 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

3. 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

4. If a policy with the accidental death rider becomes paid up

a. the accidental death rider ceases

b. the face amount of the policy is reduced
c. premiums on the basic policy stop but the rider premium continues
d. none of the above

5. 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

6. Ms. Pam Lim 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
b. receive the partial disability benefits
c. be granted the waiver of premiums
d. receive neither disability income nor waiver of premiums
7. 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. a waiver of premium
b. term insurance rider
c. guaranteed insurability rider
d. accidental death rider

8. One supplementary benefit offered is a payor’s benefit which is intended to

a. provide for the return of premiums to an adult payor in the event that a minor insured dies
b. provide a waiver of premium benefit in the event of death or disability of the person paying
the premiums
c. allow the insurance company to pay the policy’s proceeds to the person who seems
equitably entitled to the proceeds
d. assure that the adult payor will retain a vested interest in the policy when the insured
reaches the age of majority

9. 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 premiums being waived

10. A policy with a minor as the proposed insured is called

a. rated policy
b. juvenile policy
c. regular policy
d. substandard policy
 MODULE QUIZ
Module 4 – Risk Selection

1. 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

2. 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
c. minimum income requirement
d. all of the above

3. 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

4. Anti-selection occurs

a. when an agent thinks only of his own interest and not of his policyowners
b. when you purchase bad stocks with expectation that they will improve
c. when the insurance company accepts more than as usual share of share of poor risk
d. when persons in poor health wish to buy insurance

5. 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

6. In an application, the information that must be disclosed include

a. only his date and place of birth

b. only his family history
c. every fact in his knowledge that is materials to the insurance
d. only information he wants the agent to know

7. Insurance Companies have various sources of information and the insured. These are

a. application form
b. medical information bureau
c. inspection report
d. all of the above
8. In insurance, risks are classified as

a. unacceptable and acceptable

b. regular and irregular
c. standard, substandard and declined
d. complete and incomplete

9. 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

10. A hazardous occupation could be defined

a. an occupation the duties of which expose the insured to 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

11. Mr. Ram Sy 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

12. Insurance companies have a source of confidential medical information on applicants for
life insurance. This is the

a. agents confidential report bureau

b. inspection reports bureau
c. financial standing bureau
d. medical impairment bureau

13. 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 and b only

14. All of the following statements regarding a life insurance application are correct, except
a. it must be signed by the applicant
b. usually it will be made a part of the policy contract
c. misstatements of material facts could void the policy during contestable period
d. statements made on the applications are warranties

15. 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 date of his prospects in connection with future sales
c. to avoid the necessity of the insurer putting all relevant detail in the contract
d. none of the above
 MODULE QUIZ
Module 5 – Legal Aspects

1. For a contract to be legal and binding

a. parties to be contract must be members of the bar

b. parties to the contract must be legally competent
c. parties to the contract must be above 21
d. parties to the contract must possess blood relationship

2. For life insurance coverage to be valid, insurance interest must exist

a. only at the inception of the policy

b. only at the time of the loan
c. throughout the entire lifetime of the policy
d. both at the time of the policy issue and at the time of the loan but not necessarily
throughout the lifetime of the policy

3. When the proceeds of a life insurance policy are left with the company to earn interest

a. income tax is levied on the proceeds

b. income tax is levied on the interest earnings of the proceeds
c. estate tax is levied on the proceeds
d. donor’s tax is levied on the proceeds

4. A person has insurable interest in the life of

a. his child or grandchild

b. any person upon whom he is wholly or in part dependent on, or from whom he is receiving
support or education
c. any person in whom he has pecuniary interest
d. all of the above

5. Anybody can be designated a beneficiary except

a. a creditor
b. minors
c. those expressly prohibited by law to receive donations
d. all of the above

6. The Parties involved in life insurance contract are the

a. Insurance company and agent

b. Insurance company and insured
c. Agent and insured
d. Insured and Beneficiary

7. According to insurance law, a common-law spouse cannot be designated a beneficiary

a. since there is no benefit of marriage in the relationship

b. if his/her partner is still living and the previous marriage has not been legally dissolved
c. the common-law relationship is an immoral relationship
d. all of the above
8. 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

9. If the policy did not contain the name of the beneficiary, proceeds will be paid to the
insured’s

a. state
b. wife
c. children
d. estate

10. In certain situations, a company may file an interpleader action with a Court of Law. This
remedy is used to

a. resolve the question of insurable interest

b. determine if the cause of the insured’s death was an excluded risk
c. decide conflicting claims on the same insurance proceeds
d. recommend the best settlement option for the beneficiary

11. Statement in the application forms are

a. Guarantees
b. Representation
c. Warranties
d. None of the above

12. Mr. Tim Tan walked out of his house one night and was never heard of again. His wife
wanted to make a claim on his life insurance policy as she believes that he is dead. Which
of the following statements is correct in this case?

a. The company would pay immediately

b. It would require 6 months before the court declare him dead.
c. It would be four years before the court could declare him legally dead.
d. It would be seven years before the court could declare him legally dead.

13. A housewife without gainful employment applies for a P3 million life coverage. Which of
the following should the agent do?

a. Be grateful
b. Examine the adequacy of the husband’s insurance coverage
c. Suggest she double the amount
d. Tell her she has no need for it
 MODULE QUIZ
Module 6 – Policy Provision

1. All of the following will be practicable to become beneficiaries except

a. children by former marriage

b. brothers and sisters
c. someone who owes you money
d. someone to whom you owe money

2. Under the law pertaining to life insurance

a. only minor children can be named irrevocable beneficiaries

b. only the wife can be named irrevocable beneficiary
c. only the wife and the children can be named irrevocable beneficiaries
d. any person with insurance interest can be named irrevocable beneficiaries

3. The common practice of most life insurers is that the life insurance goes into force

a. when the application is received by the branch office

b. when the policy is delivered to the applicant
c. in accordance with the legal stipulation of the insurance Code
d. when the agent gives a binding receipt

4. Which one of the following provisions in a permanent life insurance policy may lapse for
non-payment of premium?

a. Guaranteed Insurability
b. Automatic Premium Loan
c. Settlement Options
d. Reinstatement Provision

5. Within two years of buying a life insurance policy, you are accidentally killed when you 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

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

a. surrendering the policy for its cash value

b. discontinuing payment of premium for some period
c. taking a policy loan
d. taking the extended insurance option

7. 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

a. the face amount

b. the face amount adjusted for misstatement of age
c. the sum of the premium paid
d. slightly less than the face amount
8. If the insured dies during the grace period of an unpaid life insurance policy, the amount
payable to the beneficiary is usually the

a. total premiums paid plus interest

b. cash surrender value of the policy minus the unpaid premiums
c. the face amount of the policy minus the unpaid premiums
d. full face amount

9. The typical grace period provision in a life insurance policy obliges the life insurance
company to

a. establish a policy loan to cover any premium which the policyowner fails to pay by due date
b. keep the policy in force for the duration of any major disability suffered by policyowner
c. allow the policyowner a three-month extension beyond the due date to make the late
premium payment without penalty
d. none of the above

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

a. need not be repaid by the policyowner

b. must be repaid during the policy year in which it is granted
c. goes into effect requiring no separate action from the policyowner
d. involves higher interest payments because of the greater cost of administration

11. When a policy is assigned absolutely

a. the assignee acquires all the rights and interests of the original policyholder
b. the original policyholder still can exercise some of the rights
c. the original beneficiary is not changed
d. none of the above

12. If a policy did not contain the name of a beneficiary, the beneficiary will be

a. the wife
b. the children
c. the insured’s brothers and sisters
d. the insured’s estate

13. If a policyowner does not pay a premium on the due date, the policy will immediately

a. lapse
b. be converted to a paid up policy for a lesser amount
c. go into automatic premium loan
d. continue in full force for a period of grace

14. If a policyowner whose wife is the irrevocable beneficiary wishes to cash in his policy, he
must

a. tell his wife what he is going to do

b. first take a loan on the policy
c. have the check issued in the name of his wife
d. have the wife’s consent
15. If a loan is taken on a participating policy, dividends for that policy while there is a loan
against the policy will be

a. suspended
b. paid a reduced rate
c. unaffected
d. increased

16. Interest is charged on policy loan

a. for registered policies only

b. if the loans is outstanding for more than a year, a load repaid within a year is interest free
c. to replace investment income the insurer cannot earn since a loan has been granted
d. for participating policies only

17. The suicide clause is in effect

a. the first 6 months

b. the first year
c. the first 2 years
d. the 18 months

18. The three non-forfeiture values in a permanent policy are

a. cash dividends, bonus additions and extended term insurance

b. cash surrender value, loan value, assignment
c. waiver of premium, reinstatement and the policy loan
d. cash surrender value, paid value, extended term insurance

19. In the event that a policy elects the paid up insurance option

a. the premium stops and the policy continues for the full face amount until age 65
b. the premium cease and protection continues with a reduced amount of coverage
c. the insurance continues at a reduced amount and with a reduced premium
d. the policy will automatically terminate

20. What are the basic settlement options?

a. cash surrender value, automatic premium loan

b. fixed amount, fixed period, interest fixed period and for life
c. double indemnity, total disability waiver of premium
d. policy loans, assignment, beneficiary designation

21. Name the provision in a permanent plan insurance policy under which if the premiums are
discontinued, full insurance coverage will be maintained for a specified period

a. extended term insurance

b. paid up insurance
c. paid up additions
d. life income option

22. Any policy which has lapsed can be reinstated subject to normal conditions of proof of
insurability within

a. three years
b. six months
c. one year
d. two years
23. Which one of the following is not derived from the non-forfeiture values

a. cash surrender value

b. paid up insurance
c. dividends
d. extended term insurance

24. In the event that the policyowner elects the paid-up insurance option

a. premium stops and the policy continues for a full face amount until age 65
b. premium ceases and protection continues for a reduced amount
c. insurance continues at a reduced amount and with a reduced premium
d. the policy will automatically terminate

25. Which of the non-forfeiture options give the largest amount of protection?

a. fully paid insurance

b. cash surrender value
c. extended term insurance
d. all of the above give equal protection
 MODULE QUIZ
Module 7 – Annuities

1. An annuity plan

a. offers life insurance protection

b. offers the waiver of premium benefit
c. is the same as endowment plan
d. is a purchase of income

2. The person who purchases the annuity plan is called the

a. assignor
b. owner
c. insured
d. annuitant

3. An “immediate annuity” is

a. a kind of regular annual savings arrangement to provide a pension for life with no life
coverage
b. a single premium whole life policy
c. an arrangement where a person can pay a life insurance company a sum of money in
return for a pension for life
d. an on-time payment for a pension to start a pre-determined date.

4. An “immediate deferred annuity” is

a. a kind of regular annual savings arrangement to provide a pension for life with no life
coverage
b. a single premium whole life policy
c. an arrangement where a person can pay a life insurance company a sum of money in
return for a pension for life
d. an on-time payment for a pension to start a pre-determined date

5. An “retirement annuity” is

a. a kind of regular annual savings arrangement to provide a pension for life with no life
coverage
b. a single premium whole life policy
c. an arrangement where a person can pay a life insurance company a sum of money in
return for a pension for life
d. an on-time payment for a pension to start a pre-determined date

6. A widow, the beneficiary of a life policy tells you that she wants all the money that she can
get now. Which of the following do you recommend?

a. interest option
b. fixed income option
c. fixed period option
d. life annuity option
e. none of the above
 MODULE QUIZ
Module 8-10 – Health Insurance, Industrial Insurance,
Group Insurance

1. Benefits payable under health insurance policies cover

a. accidental death and dismemberment benefits

b. expense reimbursement benefits
c. disability income benefits
d. all of the above

2. With employer-employee groups, an employee does not fill out a personal application for
insurance. Instead he merely fills out

a. an enrollment card
b. a registration card
c. a certificate of insurance coverage
d. a salary deduction form

3. In the event an employee leaves the company in which he is a member of its group
insurance policy, his group coverage can be changed to an individual policy using the

a. policy exchange facility

b. conversation privilege
c. change of plan provisional
d. policy change form

4. The most common type of group insurance sold in the Philippines is

a. Group Whole Life

b. Group Endowment
c. Group Universal Life
d. Group Yearly Renewable Term

5. Group Yearly Renewable Term

a. Requires medical every year for each employee

b. is the most expensive form of group insurance available
c. is the lowest cost life plan available
d. excludes claims arising from deaths that are not work related

6. Group life insurance covers

a. Death provided it is during working hours and in the place of employment

b. Death of employees regardless of cause except suicide during the first year (sometimes
two years)
c. Accidental Death only
d. None of the above

7. A policy that may provide for an increase or decrease in the sum insured and/or level
premium payment and has the savings portion tied to a common stock fund with no
guaranteed values

a. participating whole life

b. participating endowment
c. annuity
d. universal life
 MODULE QUIZ
Module 11- 12 – Investments in Insurance
IC rules and code of ethics

1. The insurance code specifies that a contract does not take effect unless

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

b. payment of the first premium is made to the insurer or its authorized agent
c. no change has taken place in the insurability of the life to be insured between the time of
the application was completed and the time the policy was delivered
d. the insured has named in the policy no fewer than two beneficiaries

2. Insurance companies which are owned by the policyowners are examples of

a. stock companies
b. mutual companies
c. family corporation
d. open-end companies

3. Stock companies are owned by

a. policyowners
b. stockholders
c. creditors
d. government

4. 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

5. Policy reserves are future obligation on the part of

a. the Insurance Commission

b. the Insurance Company
c. the beneficiary
d. the policyowner

6. Prior to granting a license, the IC requires proof of

a. a clean record of employment

b. a reasonable education background
c. a prospective agent’s character and reputation
d. all of the above

7. The IC has the power to adjudicate insurance claims against insurance companies for any
single claim not exceeding

a. P1,000,000
b. P250,000
c. P100,000
d. P500,000
8. Which one 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 confidential
c. the agents should always recommend the amount and type of policy to a 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

9. Which one of the following statements is correct?

a. an insurance agent’s license will be renewed when the Commissioner is satisfied that the
information in the application is accurate and all requirements are met
b. an insurance agent’s license is valid only for one month
c. an insurance agent’s license is valid during the lifetime of the agent
d. and insurance agent’s license will be renewed when the corresponding application and fee
are received by the insurance Commissioner

10. The insurance industry is under government regulations because

a. it is required to account for money spent in company operations

b. it pays high taxes
c. if affects public interest
d. it is a charitable institution

11. Which one of the following statements is correct?

a. an agent is allowed to share commissions when selling a whole life policy but not when
selling a term policy
b. an agent is allowed to share commissions with another licensed agent or agents but with
no one else
c. sharing the commission with any other person is called twisting
d. an agent is allowed to share commissions with any person

12. Which one of the following statements is correct?

a. rebating of premiums can only be authorized by the head office of the insurer
b. a life insurance is not allowed to identify on his letterhead the name of insurer he
represents
c. life insurance agents are allowed to act for two insurers at the same time under the same
license
d. rebating of premiums by an insurance agent is prohibited

13. Persuading a policyowner, directly or indirectly, to surrender or lapse a policy on one

company and replacing it with a policy in another company is

a. rebating
b. twisting
c. knocking
d. discounting

14. Rebating is

a. dating the policy a month in advance

b. giving false information
c. twisting
d. premium discrimination against policyholders
15. An insurance agent’s license can be revoked for

a. fraudulent practices
b. violation of any provision of the Insurance Code
c. misrepresentation in the application for license
d. any or all of the above

16. One example covered under the ethical practices and procedures is

a. keep all policyholders information confidential

b. always recommend a will
c. never drink in front of a client
d. always pick up the first premium with the application for insurance

17. The term knocking means

a. promising to pay to two annuitants a fixed annual income as long as both survive
b. making derogatory remarks about competing underwriters or companies
c. the number of years that a person at a given age will live on the average as shown by the
mortality table
d. none of the above

18. The following are unethical practices in the solicitation and procurement of insurance
except

a. misleading estimates of the dividends or shares of surplus to be received thereon

b. inducing a policyholder to lapse, forfeit or surrender a policy he holds for another company
c. misrepresenting the terms of any policy issued by any insurance company or the benefits
or advantages promised thereon
d. obtaining or attempting to obtain a license by fraud or misrepresentation

19. Twisting is

a. paying the premium on one policy by surrendering the dividends of another policy
b. the replacement of a policy in one company with another policy in another company
c. an attempt made by an insurance company to secure the services of an agent from
another company
d. an offense which does not apply to variable concepts

20. 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

a. knocking
b. overloading
c. misrepresentation
d. twisting

21. Selling a person more insurance than what is warranted by his sources is called

a. overloading
b. twisting
c. rebating
d. knocking
22. An agent is prohibited from doing all of the following except

a. alter an application without the applicant’s prior written approval

b. 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
c. refund some of his commission to his client
d. make complete comparisons of policies he sells and those offered by competing insurance
companies

23. Inducing an insured to lapse or forfeit his insurance

a. is not allowed by the conditions of the contract

b. is always to the advantage of the policyholder
c. is an offense in the great majority of cases
d. is a matter left entirely to the discretion of the agent

24. Inducing an insured to lapse or forfeit his insurance

a. is not allowed by the conditions of the contract

b. is always to the advantage of the policyholder
c. is an offense in the great majority of cases
d. is a matter left entirely to the discretion of the agent
 ANSWER KEY

MODULE 1 MODULE 2 MODULE 3 MODULE 4

1. A 1. B 1. D 1. A
2. D 2. B 2. C 2. B
3. C 3. C 3. C 3. C
4. C 4. A 4. A 4. D
5. D 5. C 5. A 5. B
6. A 6. A 6. D 6. C
7. A 7. A 7. B 7. D
8. D 8. B 8. B 8. C
9. D 9. D 9. C 9. B
10. A 10. D 10. B 10. D
11. D 11. A 11. A
12. A 12. B 12. D
13. B 13. A 13. C
14. C 14. B 14. D
15. D 15. D 15. A

MODULE 5 MODULE 6 MODULE 7 MODULE 8-10

1. B 1. C 1. D 1. D
2. A 2. D 2. D 2. A
3. B 3. D 3. C 3. B
4. D 4. B 4. D 4. D
5. C 5. C 5. A 5. C
6. B 6. C 6. E 6. B
7. B 7. B 7. D
8. B 8. C
9. D 9. D
10. C 10. C
11. B 11. A
12. D 12. D MODULE 11-12
13. B 13. D 1. B 14. D
14. D 2. B 15. D
15. C 3. B 16. A
16. C 4. A 17. B
17. C 5. B 18. D
18. D 6. D 19. B
19. B 7. C 20. C
20. B 8. B 21. A
21. A 9. A 22. D
22. A 10. C 23. C
23. C 11. B
24. B 12. D
25. C 13. B