Ceilli Sample Questions (Eng) – Set 3

SET 3: CEILLI SAMPLE QUESTIONS 1. Choose the combination that best described the features of Government bonds. I. The government guarantees government bonds. II. They provide a good hedge against inflation. III. Government bonds are used to borrow money from the public. IV. Government bonds are used to borrow money from the private sector. A. B. C. D. I & II only I & III only II & IV only I & IV only

2. The duties of the trustee of unit trust do not include ___________. A. B. C. D. Ensuring that the fund manager adhere to the provision of the trusts deeds. Acting generally to protect the unit holder. Holding the pool of money and assets in trust on behalf on the investors. Managing the portfolio of investment and administering the buying and selling of shares in the unit trust itself.

3. Apart from the investment management charges, what other kind of charges do single premium investment-linked policy charged? I. II. III. Policy Fee Administrative and mortality charges Assurance charges C. II and III only D. I, II and III only

A. I and II only B. I and III only

4. Policy fee payable by an investment-linked life insurance policy owner is to cover: A. B. C. D. The mortality costs of the investment-linked life insurance policy. The administrative expenses of setting up the investment-linked life insurance policy. The handling charges by professional investment managers. The price of each unit bought under the investment-linked life insurance policy.

5. The investment returns under an investment-linked life insurance policy: I. II. III. IV. A. B. C. D. Are not guaranteed Are assured Are linked to the performance of the investment fund managed by the life office Fluctuate according to the rise and fall of market prices I, II and III only I, II and IV only I, III and IV only II, III and IV only

Zurich confidential or proprietary information Prepared by: Agency Training & Development

Version: Jan 2013

Page 1

A. 7. Represent initial expenses which have already been incurred and recovered. Fixed monetary amount only through reduction of the life cover sum assured. Annual policy plan with renewal C. C. 11. Once the policy is in force. Are deducted from the value of units at surrender. D. C. B. The investment-linked policy only provides coverage and nothing else. Fund managers will make sure that the investment-linked policy is shielded from market fluctuations. Top-up policy plan D. D. Number of units or fixed monetary amount through cancellation of units. D. C. B. Are deducted from the value of units at the commencement of the policies. Managed funds 8. D.Ceilli Sample Questions (Eng) – Set 3 6. B. B. The investment-linked policy is directly linked to investment performance. fund management fee and the like under an investmentlinked life insurance policy are ______________. this is normally a ______________. C. Which one of the following best describes the policy benefits of investment-linked policies? A. Equity funds D. D. The administrative fee. for up to 12 months. 9. A. The policy benefits will depend on the long-term of the life office. Number of units through cancellation of units only. The policy benefits are payable only on death or disability. The policy benefits are directly linked to the investment performance of the underlying assets. Regular premium plan B. Which of the following funds normally include a provision for the deferment of unit redemption by the manager. Property fund B. The policy benefits are guaranteed. Government bond funds 10. Number of units or fixed monetary through reduction of the life cover sum assured. 12. except for death? A. EXCEPT: A. Under an investment-linked life insurance policy. All the following statements are true. Single premium plan C. insurance charge. Surrender charges under the investment-linked life insurance policies: A. Usually guaranteed Not subject to review Subject to change by the life office after written notice is given Always up-front charges Zurich confidential or proprietary information Prepared by: Agency Training & Development Version: Jan 2013 Page 2 . A. Are applicable to policies with no uniform allocation. C. if a policy owner pays a regular payment to the insurance company. the clients’ investments will grow steadily. B. Investment-linked life insurance policy owners may make withdrawals in terms of _________.

II. 17. I. Sales planning by the fund managers. I. Profit planning by the life officers. A fixed amount throughout the life of the policy. D. The switching facility under investment-linked life insurance policies is very useful for the purpose of __________________. Twisting D. Zurich confidential or proprietary information Prepared by: Agency Training & Development Version: Jan 2013 Page 3 . D. Replacing C. C. 1950 Transport Act. 1985 C. The stock market cannot be approached by ordinary people. Many investors have seen their fortune dwindling due to the financial crisis. Trustees are appointed on the issue of the stock. III and IV only D. C. D. The fall of many established financial institution in the last few years. I and II only B. I. B. The law that govern the other forms of life insurance is regulated by the laws that govern the business of investment-linked life insurance such as the ________________. C. Assets planning by the trustee. III. The adverse economic conditions. have made them be wary of investments. A. In case of default. Financial planning by the policy owners. in the last 15 years. II and III only B. One of the following statements about Debenture stocks is FALSE. II. the investor can sell the charged property to retrieve the loan. I. I. Why do you think client’s nowadays are adverse to investments? I. II and III only 18. B. B. II and IV only D. III. IV. 1965 Contracts Act. The price at which units under policy are offered for sale by the life office. A.Ceilli Sample Questions (Eng) – Set 3 13. The offer price under an investment-linked life insurance policy is__________. Changing 16. The price at which units under policy are bought back by the life office. 14. II and IV only 15. II. III and IV only A. 1996 and its regulation Companies Act. II. A. All of the above A. The company can repay the loan earlier if it wishes. Switching B. Misrepresentation resulting in inducing policy owner to cancel or have his policy made paid-up in order to purchase a new policy to earn more income for the agent is known as ___________. Also known as the bid price. Insurance Act. IV. C. There are unsecured loans that are made to a company. A.

There is only one price quoted whether the policy owner is buying or selling his units. Ensure that there is a right combination of objectives and make sure proper risk analysis is done. Planning B. The principal legal document regulating income tax in Malaysia is the ________________. A. Educate a client to be an expert investor. 1965 C. Ensure that the advice is advantageous to the agent and the insurance company. 1950 D. Varied product 22. the term used in the consumer buying decision process is known as _____________. What are the customer’s habits? What are the customer’s personal and dependents details? What is the reputation of the consumer? What are the landed properties that the customers have? 25. The policy owner buys the unit at the life office’s buying price and sells the units at the life office’s selling price. Sales strategy 24. Companies Act. Controlling D. 1967 B. B. D. D. Information search B. Market-oriented D. Problem recognition D. Motivate the client to borrow money to invest in guaranteed investment vehicles. A. Educate clients’ with some basic and sound investment principles.Ceilli Sample Questions (Eng) – Set 3 19. Insurance Act. Sales goal C. Make decision on behalf of the client. Contracts Act. Hard sales C. _________________. Evaluation of problem 23. Customer Fact Finding Form by an investment-linked life insurance agent should provide answers to which of the following questions? A. A. The term used in marketing where results are measured against the plan and changes made when and where necessary is known as __________________. What must an agent do to ensure the client is given proper advice on investment? A. B. 20. A. Problem solution C. To recommend specific funds to invest in. C. The policy owner buys the units at the offer price and sells the units at the bid price. When a consumer becomes aware of a potential opportunity and feels the need for a product to satisfy his needs. D. B. Under the dual pricing method of single premium policies. Owing to changes in the market environment many insurance companies now sell their product on a _______________ basis. Zurich confidential or proprietary information Prepared by: Agency Training & Development Version: Jan 2013 Page 4 . The bid price is always higher than the offer price. C. 26. Show the wide selection of investment for the client to choose from. 1996 21. C. An agent owes the client a moral obligation to ________________. B. Sales-oriented B. C. A. D. A. Income Tax Act.

III. Three-way arrangements among the investors. He was impressed by the investment-linked life insurance policy that you bought when he was down for a holiday in Malaysia. Meeting the market demands and financial demands. B. Investment-linked permanent health insurance: I. Variable Life Insurance Plan D. C. III and IV only C. C. C. Unit trust is essentially for ___________________. II and IV only 32. II and III only B. B. 29. II. D.Ceilli Sample Questions (Eng) – Set 3 27. III and IV only D. Provide disability income Contain cash value No cash value Price is more competitive when compared to traditional with profit life insurance product C. the trustee and the fund manager. Two-way arrangements between the investors and the fund manager. D. the trustee and the supervisory authority. D. B. Market recommendation to the customer. II. What plan should he say that he wants to buy to his agent? A. Investment-linked funds can be structured into two ways: A. He is now on London and wants to buy a similar plan. Investment-Linked Life Insurance Plan B. To buy B. Warrant units and right units Investment units and distribution units Accumulation units and distribution units Term units and annuity units 30. D. Tap into a vast and very lucrative insurance market. Not to buy D. The response to the religious principles and practices of the Muslims. Conducting the fact-finding. I. IV. Three-way arrangements among the investors. Gathering all relevant financial data. What is the second stage in the process of providing advice to customer? A. Adam lives in UK. I. Assessing and satisfying customer’s needs. A. The Takaful Investment-linked Life Insurance Plan was developed due to: A. Unit-Linked Life Insurance Plan A. 33. A call option gives the holder the right ________________. C. The fact that there were no products suitable for Muslims in Malaysia before this. B. A. To sell C. I. Zurich confidential or proprietary information Prepared by: Agency Training & Development Version: Jan 2013 Page 5 . Not to sell 28. Universal-Variable Life Insurance Plan 31. Two-way arrangements between the investors and the trustee.

Feels that by giving this relief. I. Non-participation whole life insurance B. None of the above 37. Investment B. I only I & II only I. C. D. What is defined as “the management process responsible for identifying. investment trusts and options. 38.Ceilli Sample Questions (Eng) – Set 3 34. 39. C. anticipation and satisfying customers requirement profitably”? A. D. II & III only All of the above C. The government has allowed insurance premiums paid as relief to a certain extend because the government _____________. Debenture stocks. all Malaysians will be able to purchase insurance easily. The bid price is: A. Temporary insurance 40. Future. Marketing investment 36. Offer price C. Fixed income stocks. When units are cashed to meet death. The three basic types of corporate stocks include: A. Bid price D. C. Participation endowment insurance D. C. B. The price at which the agent buys the units in the investment fund. B. C. Feels that the tax they will collect if the relief is not given is considerably low and insignificant. Traditional with-profit life insurance products include: A. treasury bills and time deposits. The price at which the life office buys the units in the investment fund. Can be found in the public sector A. D. B. loan stocks and convertible stocks. B. A. Is giving this relief to encourage national thrift and promote individual financial independence. unit trusts and derivatives. Is allowing this relief to make sure it is popular. The price at which the investor sells the units held in the fund. Non participation endowment policy Zurich confidential or proprietary information Prepared by: Agency Training & Development Version: Jan 2013 Page 6 . At the bid-offer spread B. Marketing D. A. Investment-linked 35. Bond funds __________. Can be found in the private sector IV. D. The price at which the agent sells the unit linked policy. Are also called “fixed income funds” III. Preference stocks. these are cashed at the ______. maturity or surrenders. Are also called “income funds” II.

Recommend that his agent be given a letter of recommendation and an award from the company III. Undercut slow agents with productive ones. Do not meet their needs.III. II. For the dual pricing method. III and IV only II. C. C. A.IV only. He is happy with his agent and the plans that have been offered to him. They might not afford to pay.II & III only All of the above Zurich confidential or proprietary information Prepared by: Agency Training & Development Version: Jan 2013 Page 7 . Equivalent to the premium paid divided by investment return. I & III only II.Ceilli Sample Questions (Eng) – Set 3 41. III. IV. B. I. Siva will definitely do the following: I. II and IV only I. I. B. B. a market-oriented insurance company should undertake the following functions. I. His agent has done a lot for him. II. They surrender for its value or paid up I.IV only. Help him in prospecting and referring his friend to the agent. the number of units that can be purchased is _______. B.III. D. Customers who have purchased policies from an organization who are sales-oriented. III and IV only . II and III only I. Speak highly about the level of commitment and service given to him by his agent. 44. IV. Siva is a very satisfied insurance client. A. Generally. 43. Equivalent to the premium paid divided by the offer price. D. usually ended buying policies which I. Product development. Keep his agent a very well guarded secret. II. A. 42. Market identification. Planning and control. Equivalent to the premium paid divided by the bid price. III.III & IV only I. C.III only.II. A.VI only. They do not understand.II. D. C. IV. Equivalent to the premium paid divided by the bid-offer spread. I. II. D.

B. II and III only C. Money market instrument B. II. II and IV only 50. I. II. Shares C. A. Preference shares C. III and IV only I. C. By selling the warrants given to an investor in the first instance. The public generally invest their money to provide: I. 7(1)(b) 71(b) 70(1)(b) 7(2)(b) 48. Funds for a company Comfortable standard of living Income in retirement Funds for the education and upbringing of their children C. II. It is one of the methods used by government to borrow money from the public. Which of the following section of the insurance Act 1996 explains the term “investment -linked insurance business”? A. Government bond D.Ceilli Sample Questions (Eng) – Set 3 45. III. Zurich confidential or proprietary information Prepared by: Agency Training & Development Version: Jan 2013 Page 8 . Like ordinary shares. It is a short-term funding vehicle issued by Central Bank and it is also the safest type of investment which carries no risk except the country is politically unstable. Debenture stock 47. III and IV only D. The disadvantages of warrants or TSR is _________________. the investor cannot benefit from the capital gain. III and IV only D. II and III only B. D. D. Investors have to pit in a large initial outlay to establish and expose the shares. IV. Which of the following is NOT a type of fixed income securities? A. B. Government bonds D. III. II. IV. it is A. there is no chance for price recovery. C. All of the above 46. On expiry. I. Establishing relationship with the client Recommendations and record of advice Gathering all relevant financial data Establishing current financial position and goals I. B. Bank account B. None of the above 49. A. III and IV only A. warrants which are not exercised lose their value completely. I. What are the stages involved in providing effective advice to investment-linked life insurance customers? I.

Accessibility of funds Availability of funds Investment horizon Investment objectives C. The requirement of the Securities Exchange ct 1934 that all insurance agents and agency office employees dealing in variable life insurance must pass an examination in securities business. such assets are usually the last to depreciate. One of the factors that have contributed to the expansion of the investment-linked life insurance business in Singapore was _______________. A. Invest in stocks & shares and the magnitude of the change in unit prices will depend on the quantity only of the equities held. C. In respect of investment-linked life insurance funds. B. D. 52. 10% . B. 54. Equity funds _____________. The introduction of the Enhanced Investment Scheme (EIS) by the Central Provident Fund (CPF) in 1993. 5% . A. namely accumulation units and distribution units. thus the unit price decreased and the policy owner gets more units. thus the unit price remains unchanged but the policy owner gets more units. Invest in stocks and shares and during market recession. II. D. financial information of the insurer. Ploughed back into the fund. I and II only Zurich confidential or proprietary information Prepared by: Agency Training & Development Version: Jan 2013 Page 9 .Ceilli Sample Questions (Eng) – Set 3 51. I only B. the investment income of the fund is ____________. C. Investment-linked funds can be structured into two ways.6% of offer price D. chargeable fees and expenses and rights of policy owners. B.20% of offer price B. The introduction of the new generation of investment-linked life insurance products. specialized funds & diversified funds. thus the unit prices will increase over the long term. What are the key considerations in investment? I. A. Used to purchase additional units to be distributed to the policy owner. All of the above A.20% of bid price C. 5% . IV. 10% . D. thus the unit prices will decrease over the long term. I. III. 55. Invest in stocks and shares and investor who buy such assets usually aim for capital appreciation. A. The regulations of investment company’s management and operation including that of how the premiums are going to be invested. property funds. Used to purchase additional units to be distributed to the policy owner. bond funds. Invest in stocks and shares and are inherently of lower risk in nature and the prices of stocks and shares are stable. Ploughed back into the fund. C. II and III only D. In accumulation units. the difference between the offer and bid prices in normal market condition is _________________. the Hambro Whole Life in 1997.6% of bid price 53. Investment-linked funds can be invested in any financial instruments including cash funds.

Client has the option to make decisions on how the company must invest his money totally. Sell high premium policy with good income for herself. To ensure that the insurer has the expertise and technical knowledge to market and manage the business soundly. Dual Price_ Single Price 60. IV. Deal with or source other specialist advice when in doubt except from his supervisor. II and IV only D. Combination of level premium and natural premium system Level premium system Multiple level premium system Natural premium system 59. Ending Value of Investment__ Beginning Value of Investment B. D. Client is expected to monitor and switch the funds on his own all the time the policy is in force. To ensure that there is no competition amongst insurers who does the same thing. In Part II of General Sales Principles of LIAM’s Code of Conduct. Because section 7(1)(b) makes it compulsory II. III. II & III only D. III and IV only A. III. I. A. C. B. Why does Bank Negara require insurer to submit a proposal on investment linked business before they can be allowed to operate such line of business.Ceilli Sample Questions (Eng) – Set 3 56. The burden of fund management is borne by the company’s professional management team and does not burden the client. 57. III & IV only B. C. Beginning Value of Investment Ending Value of Investment C. IV. D. A. Offer Price Bid Price D. I. The premium system used in the calculation of premium rates in an investment-linked policy is using a ________________. Make inaccurate or unfair criticism of any insurers. II. intermediate are forbidden to I. C. I & IV only 58. Client has the option to instruct the fund managers to follow his investment outlook and strategies. II and III only Zurich confidential or proprietary information Prepared by: Agency Training & Development Version: Jan 2013 Page 10 . To reduce competition between investments linked business and unit trust business. The benefits of investing in an investment-linked policy are all false EXCEPT: A. B. The formula for the circulation of Return on Gross Premium (RGP) is: A. Attempt to persuade a prospect to cancel any existing policies unless these are clearly unsuited to his needs. I & II only C. I and II only B.

27. 6. 56. 40. 35.Ceilli Sample Questions (Eng) – Set 3 ANSWERS 21. 51. 8. 2. 4. 47. 7. 28. 30. 20. 18. 3. 16. 59. 53. 22. 34. 39. 26. 38. 46. 19. 32. 29. 50. 42. 36. 23. 5. 43. 10. A A B C B C B D D B C C C A D B D D A C 1. 48. 14. 54. 49. 13. 45. 24. 55. 12. 52. 11. B D A B C A A D A D D C A B C A B A C A Zurich confidential or proprietary information Prepared by: Agency Training & Development Version: Jan 2013 Page 11 . 57. 9. C C C B C A A C C D B C B C D B B A C D 41. 15. 60. 37. 25. 31. 17. 44. 58. 33.

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