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THE MALAYSIAN INSURANCE INSTITUTE

THE PRE-CONTRACT EXAMINATION FOR INSURANCE AGENTS

SAMPLE OF EXAMINATION QUESTIONS

DATE

DURATION 2 hours

LANGUAGE ENGLISH

ROUTE LIFE (A & C)

----------------------------------------------._---.------------------------------------------------ ... ---------------------------

Candidate's Full Name (as in Identity Card)

Candidate's I.C No.

This sample of examination question set is the property of

The Malaysian Insurance Institute and it should be used for educational
or training purposes only.

@ Copyright The Malaysian Insurance Institute.

THE MALAYSIAN INSURANCE INSTITUTE, NO 5, JALAN SRI SEMANTAN SATU, DAMANSARA HEIGHTS, 50490 KUALA LUMPUR.
GENERAL LINE: 03 - 2087 8882 CUSTOMER SERVICE: 03 - 2087 8883

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 The Pre-Contract Examination for Insurance Agents

Please read all the instructions carefully.

1. Copy your Candidate Examination Number (CEN) from your examination entry permit
into the box provided on the cover page of this question paper.

2. This examination consists of 100 questions with 4 answer choices and divided into two
parts:
Questions number
PART A - Basics of Insurance and including
Medical and Health Insurance: 1 to 50

PART C - Life Insurance: 101 to 150

The duration of this examination is two (2) hours.

3. Please check your Examination Entry Permit to ensure that you are given the
examination question paper matching the Part(s) that you have registered.

4. Mark all your answers on the answer sheet provided. You are to blacken only one oval
with the alphabet corresponding to your answer choice for each numbered row. If there
appears to be more than one answer choices, select the one you think is the best
alternative.

5. You may write anything on the examination question paper BUT Mil will not consider
anything that you have written for marking.

6. Only correct answers will be given a point. Wrong and unmarked answers will not be
given any points. Therefore you are to answer all questions even if you have to guess.

7. Please do NOT remove any papers from the examination room.

8. Use 2B pencils and soft erasers only.

9. This question book, answer sheet and other materials provided during this examination
are NOT permitted to be taken away from the examination hall. It is the onus, duty and
responsibility of the candidate to hand-in personally to the Presiding Official all these
materials before leaving the hall.
 PARTA

THE BASICS OF INSURANCE

(Consists of 50 questions. Questions 1 to 50)

 The Pre-Contract Examination for Insurance Agents

1. A health insurance contract is a contract of

A premature death.
B permanent disability.
e financial guarantees.
D easing the financial burden caused by adverse changes in health.

2. A health insurance policy is automatically terminated upon the earliest happening of

the following events EXCEPT

A on the death of an insured person.

B if the lifetime limit paid under the policy is exhausted.
e on the diagnosis that the insured person has contracted a dread disease.
D on the policy anniversary immediately following the insured's maximum
eligibility age.

3. Under current Malaysian tax regulations, a deduction of up to a maximum of

RM3,OOOin premium paid for education, insurance is allowable.

A or life
B or medical
e health or life
D health or personal accident

4. Using a broad definition, which of the following is NOT health insurance?

A A critical illness insurance plan

B A disability income insurance plan
e A workers compensation insurance plan
D A major medical expenses insurance plan

5. The legal document issued by an insurer to a policyholder that contains the

provision of an insured group plan is the

A master policy.
B application form.
e insurance certificate.
D summary plan document.

These (luestionsfor insurance companies' training purposes on(l'

1 Questions continued overleaf
 The Pre-Contract Examination for Insurance Agents

6. A situation where more sub-standard risks are accepted for insurance resulting in a
less favourable underwriting result is known as

A anti reaction.
B contradiction.
e anti rejection.
o anti selection.

7. Restrictions on the scope of the health insurance coverage are known as

A exclusion.
B conditions.
e the operative clause.
o the schedule of benefits.

8. Long term disability income insurance also known as

A a dread disease policy.

B an investment linked policy.
e a partial disability insurance policy.
o a permanent health insurance policy.

9. The three main health insurance claim payment limits are

A ordinary limit, short term limit and per disability limit.

B short term limit, lifetime limit and overall annual limit.
e overall annual limit. lifetime limit and per disability limit.
o per disability limit, overall annual limit and ordinary limit.

10. The function of the Financial Mediation Bureau (FMB) is to

A assist its members in detecting non-disclosures of facts by applicants.

B inform its members of specific underwriting actions taken by its members.
e serve as a central registry for all health policies issued on a medically sub-
standard basis.
o provide an investigation service for dealing with disputes between insurers
and policyholders.

These questionsfor insurance companies' training jJwposes on(1'

2 Questions continued overleaf
 The Pre-Contract Examination for Insurance Agents

11. Premium shall be paid on the due date specified in the policy. However, most life
insurance contracts provide that such payment can be made within 30 days from
the due date. This period is called the period.

A grace
B expiry
C extension
D termination

12. Outsourcing to providers located abroad is often described as

A overseas investment.
B offsourcing.
C offshoring.
D investing.

13. Which of the following is/are mediation bureau(s) for insurance and takaful
companies in Malaysia?

A Motor Insurers' Bureau

B Financial Mediation Bureau
C Insurance mediation Bureau
D Motor Insurers' Bureau and Financial Mediation Bureau

14. Which of the following are the objectives of a family takaful plan?

I To provide death coverage

II To save regularly over a period of time
III To earn investment returns in accordance with Islamic principles

A I and II
B I and III
C II and III
D L II and III

These questiollsfor insurance companies' training purposes only

3 Questions continued overleaf
 The Pre-Contract Examination for Insurance Agents

15. If an act which is not within his authority is performed by an agent, and the
principal agrees to accept the same as having been done on his behalf, it is
known as

A ratification.
S assignment.
C acceptance.
D authorization.

16. Which of the following is NOT a duty of an agent?

A To exercise care and skill.

S To perform his duty in a professional manner.
C To make secret profits from any party with whom he deals on behalf of the
principal.
D Not to disclose confidential information obtained during the course of his
duties as agent.

17. The responsibilities of a company secretary include(s)

A writing minutes of meetings and preparing the annual report.

S the administration of the organization as a registered company.
C ensuring the company complies with laws or acts related to company and
insurance laws.
D All of the above

18. When contracts are tainted by defects, their validity may be

I void.
II voidable.
III unenforceable.

A I and II
S I and III
C II and III
D I, II and III

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4 Questions continued overleaf
 The Pre-Contract Examination for Insurance Agents

19. Which of the following are the essentials of a valid contract?

I Consideration
II Offer and acceptance
III Legality of the contract
IV Capacity of parties to contract

A I and II
B I, III and IV
C II, III and IV
o I, II, III and IV

20. Which of the following stages make(s) up the 'consumer buying decision
process'?

I Information search and purchase.

II Problem recognition and information search.
III Evaluation of alternatives, purchase and post-purchase evaluation.

A II only
B I and II
C I and III
o I, II and III

21. Under which of the following statutes is the maintenance of the policy register a
requirement?

A The Insurance Act, 1996

B The Companies Act, 1965
C The Official Secrets Act, 1970
o The Internal Security Act, 1960

22. The Insurance Act, 1996, empowers to supervise insurance

companies.

A the agent
B the public
C Bank Negara Malaysia (BNM)
o The Malaysian Insurance Institute (Mil)

These questions.for insurance companies' trainingpwposes only

5 Questions continued overleaf
,.
The Pre-Contract Examination for Insurance Agents

23. An insurance broker acts on behalf of

A the agent.
B reinsurer.
C the insured.
D the insurance company.

24. The intermediaries in the insurance market are mainly

A agents and brokers.

B reinsurers and coinsurers.
C adjusters and fire authorities.
D Persatuan Insurans Am Malaysia (PIAM) and the government.

25. Which of the following are appointed by insurance companies to represent them?

A Insurers
B Reinsurers
C Insurance agents
D Insurance brokers

26. In Malaysia, the age of majority is _ years.

A 16
B 18
C 20
D 21

27. Which of the following are NOT part of the insurance market in Malaysia?

A Reinsurers
B Loss adjusters
C Real estate agents
D Insurance companies

These questions for insurance companies' training purposes {)n~J!

6 Questions continued overleaf
 l

,. The Pre-Contract Examination for Insurance Agents

28. The Takaful Act 1984 is divided into four parts. Which of the following is NOT one
of them?

A The part that provides for the interpretation, the classification and
references to the takaful business.
B The part that specifies the powers vested in the Prime Minister's
Department in regulating the takaful business.
C The part that provides for the administration and enforcement of matters
such as indemnity and the submission of annual reports.
D The part that provides the mode and conduct of the takaful business such
as the conditions of registration, the establishment and maintenance of
takaful funds.

29. The duty of utmost good faith is

A optional in insurance contracts.

B compulsory only in marine contracts.
C compulsory in all insurance contracts.
D optional in general insurance contracts.

30. A person is said to possess an insurable interest if he

A suffers financial loss when his business venture fails.

B suffers financial loss upon the happening of the insured event.
C stands to make a profit upon the occurrence of an insured event.
D encounters mental suffering as a result of the occurrence of the insured
event.

31. The most effective cause in a loss is termed the cause.

A remote
B proximate
C substantial
D contributory

32. Which of the following are methods of indemnity adopted by insurers?

A Cash only
B Repair only
C Replacement and repair only
D Cash, repair. replacement or reinstatement

These questions/or insurance companies' training purposes only

7 Questions continued overleaf
 --
The Pre-Contract Examination for Insurance Agents

33. A breach of utmost good faith

I has no effect at all on the contract.

II renders the contract void from inception.
III renders the contract voidable by the affected party.

A III only
B I and II
e I and III
D II and III

34. What is the meaning of 'concealment'?

A When one party becomes insane.

B When there is failure to disclose material fact.
e When the subject matter of a contract does not exist.
D When there is the inability to perform an agreed performance.

35. In any assignment, there are two parties, namely, the assignor and the

A owners.
B receiver.
e assignee.
D beneficiary.

36. Property which is partially saved from a loss or damage is called

A salvage.
B left over.
e constructive loss.
D partial loss goods.

37. The contribution condition states that

A the insured must bear the first RMX (specified Ringgit amount) of each and
every loss.
B the insured can receive more than the actual amount of his loss.
e the insured cannot recover from any other insurers except from his own
insurer.
D where there are two or more policies covering one loss, the insured must
claim from all the policies.

These questions/or insurance companies' trainingpUlposes (}n~JI

8 Questions continued overleaf
 The Pre-Contract Examination for Insurance Agents

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38. The principle of subrogation prevents the insured from

A renewing his policy if a loss occurs.

B recovering from more than one insurer.
C receiving more than the actual amount of his loss.
o calling upon other insurers to contribute to the loss.

39. Which of the following is NOT a method of handling risks?

A Transfer
B Retention
C Avoidance
o Investment

40. Which of the following is a risk transfer method in risk management?

A Good housekeeping of premises.

B The installations of a burglar alarm system.
C The training of employees in fire prevention.
o Entering into a comprehensive insurance programme.

41. Identify the characteristics of an insurable risk.

I The risk must be a pure risk.

1/ The risk must be a speculative risk.
1/1 The risk must be of fortuitous in nature.

A I and 1/
B I and II/
C 1/ and III
o I, II and III

42. The agent's duties is/are to

I obey his principal's instructions.

II use proper care and skill in exercising his authority.
III act honestly and not in any way that is detrimental to the principal's
interest.

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

These questionsfor insurance companies' training purposes only

9 Questions continued overleaf
 The Pre-Contract Examination for Insurance Agents

43. In most cases, the financial value of a risk will the insured
event occurs.

I be known before
II not be known after
III not be known before

A L9DlY
B I and II
e II and III
D I, II and III

44. The cause of a loss is a definition of

A risk.
Bloss.
e peril.
D hazard.

45. Insurance deals with fortuitous losses which are

A all losses.
B physical hazards.
e accidental losses.
D risks, the severity/frequency of which is within the control of the insured
persons.

46. Which of the following statements is correct?

A Pure risks are uninsurable.

B Speculative risks are insurable.
e Speculative risks are always catastrophic in nature.
D There is the possibility of a gain in a speculative risk.

47. Insurance is

A a means of providing charity.

B an investment business only.
e a mechanism for computing risks.
D a mechanism for transferring risks.

These questionsfor insurance companies' trainingpluposes only

10 Questions continued overleaf
." The Pre-Contract Examination for Insurance Agents

48. Which Act is introduced for the purpose of regulating the conduct of the insurance
business in Malaysia?

A The Company Act, 1963

B The Company Act, 1965
C The Insurance Act, 1965
D The Insurance Act. 1996

49. The functions of insurance include

I providing employment to many.

II freeing funds otherwise tied up as reserves.
III indemnifying insured's against losses sustained as a result of fortuitous
events.

A I and II
B I and III
C II and III
D I. II and III

50. How can risks be classified?

A Pure and speculative risks

B Pure and fundamental risks
C Speculative and particular risks
D Fundamental and particular risks and pure and speculative risks

These questionsfor insurance companies' training pUiposes only

11 Questions continued overleaf
 PARTC

LIFE INSURANCE

(Consists of 50 questions. Questions 101 to 150)

 The Pre-Contract Examination for Insurance Agents

101. The main purpose of delivering the life policy through the agent is to

A enable the agent to close more cases.

B advertise the image of the insurance company.
C enable the agent to collect the first premium due.
o enable the agent to stress the importance of the policy and to explain
again the various conditions and privileges contained in the policy.

102. Features of life insurance contract being long term and implications of surrender
values being less than total premiums paid, are usually part of information found
in

A agent's report.
B endorsements.
C sales literature.
o proposal forms.

103. Under the guidelines on the code of conduct, cases of fraud must be reported
immediately to the

A police only.
B police and to the board of directors.
C police and to Bank Negara Malaysia (BNM).
o police and to the audit! disciplinary committee.

104. Choose one practice which is ethical.

A Paying the first premium for the prospect.

B Investing the insured premium and sharing the profit together.
C Holding all information about the prospect's previous surgery from the
underwriters.
o Holding in trust information about the prospect such as weight. salary and
past medical history.

These questions/or insurance companies' training purposes on{v

12 Questions continued overleaf
 The Pre-Contract Examination for Insurance Agents

105. The main sources of surplus in ~ life company are

I interest.
II mortality.
III expenses.
IV surrender policies.

A I and II
B II and III
C III and IV
D " I" III and IV

106. The process by which the proceeds of a policy are paid other than as a lump sum
cash payment is called

A dividend.
B reinstatement.
C settlement option.
D non-forfeiture option.

107. The following can be used as proof of death EXCEPT

A the coroner's report.

B a certificate of death.
C an international passport.
D an order pronouncing a statutory presumption of death.

108. Which one the following is NOT settlement option of a maturity claims?

A Cash maturity proceeds

B Leave the proceed in a bank
C Draw the cash by instalments
D Conversion of proceeds to an annuity

109. Before any claim payment is made for maturity claims, which one of the following
documents must be produced?

A A probate of the will

B The policy document
C The estate duty certificate
D The income tax statement

These questions/or insurance companies' training purposes on{v

13 Questions continued overleaf
 The Pre-Contract Examination for Insurance Agents

110. Which of the following particulars are usually found in the schedule of a policy?

I Sum assured
II Date of maturity
III Name and address of the insurer
IV Name and address of the assured

A I, II and III
B I. II and IV
e I, III andN
D I, II, III and IV

111. For the proper assessment of risk, information obtained from the following
sources is important:

I ajgent's report.
II medical report.
III the proposal form.
IV attending physician's statement.

A I, II and III
B I, II and IV
e I, III and IV
D I. II. III and IV

112. Information relating to financial position and sources of income of the life
proposed is generally obtained from the

A agent's report.
B proposal form.
e health declaration.
D employer's certificate.

113. This is a method of distributing surplus:

A extra or surpluses bonuses.

B common and general bonuses.
e simple or compound interest bonuses.
D simple or compound reversionary bonuses.

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14 Questions continued overleaf
 The Pre-Contract Examination for Insurance Agents

114. Life insurance companies usually give certain discounts on premium chargeable
to female lives because

A females usually receive smaller incomes.

B lesser insurance coverage is given to female lives.
C they wish to attract female lives in greater numbers.
o the female mortality rate is generally lower than that of male lives of the
same age.

5t
115. Aminah prefers the yearly mode of premium payment which is due on the 1 of
January every year. In the 4th year, she encountered some financial difficulties
which resulted in payment being made on the 3rd of February. Her policy is
considered to have

A lapsed.
B forfeited.
C cancelled.
o not lapsed.

116. What do you understand by the term 'high persistency'?

A It means that a high percentage of claims arise.

B It means that a high percentage of agents dropped out of the sales scene.
C It means that a high percentage of potential insureds sent in proposal
forms.
o It means that a high percentage of policies stay in force to the end of the
period of cover.

117. The particulars asked for in the proposal form which will help to calculate the
premium rates are

I age and gender.

II occupation.
III additional benefits.
IV sum assured and type of policy.

A I, II and III
B I, III and IV
C II, III and IV
o I, II, III and IV

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15 Questions continued overleaf
 The Pre-Contract Examination for Insurance Agents

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118. Which of the following are elements of gross premium for participating policies?

I Interest
II Mortality
III Expenses
IV Bonus loading

A I, II and III
B I, II and IV
C I, III and IV
0 I, II, III and IV

119. On August 1, Mr Chong submitted a proposal form to an insurer. A letter of

acceptance was issued on August 8, and was delivered to Mr Chong on August
10. Mr Chong paid the initial premium on August 17. A life insurance policy was
issued and delivered to Mr Chong on September 4. Mr Chong's life insurance
policy was effective on

A August 8.
B August 10.
C August 17.
o September 4.

120. Under the 'cooling-off' period, a new life policyholder may, within
________ of the delivery of the policy to him, return the policy to the
insurer for cancellation due to objections to certain terms in the policy.

A one week
B one month
C 15 days
o 21 days

121. Special conditions that need to be endorsed at the time of issuing the policy are
those

I affecting the premium.

II affecting the sum insured.
III incorporating special benefits.
IV incorporating special restrictions.

A I and II
B II and III
C III and IV
o I, II, III and IV

These questions/or insurance companies' training purposes only

16 Questions continued overleaf
 The Pre-Contract Examination for Insurance Agents

122. Some of the risk factors of mortality are

I age.
II sex.
III occupation.
IV social status.

A I, II and III
B 1,IIandiV
C I, III and IV
D I, II, III and IV

123. When an insurance company encounters a substandard risk, the company can
take the following actions:

I increase premium.
II to charge a debt or a lien.
III to offer an alternate form of contract.

A III only
B I and II
C I and III
D I, II and III

124. When an applicant for insurance is classified as substandard risk, it means the
applicant

A will soon die from a disease.

B will soon die from an accident.
C possesses an average or less than average likelihood of a loss.
D possesses a greater than average likelihood of creating a loss.

125. Proceeds from a personal life insurance policy are

A taxable.
B deductible.
C chargeable.
D not taxable.

These questions/i)/' insurance companies' trailling purposes on~y

17 Questions continued overleaf
 The Pre-Contract Examination for Insurance Agents

126. This is the value which attaches to a policy of life insurance after a period of at
least three years of being in force.

A Paid up value
B Residual value
C Cash value
o Forced sale value

127. The conditions in a life insurance policy can be categorized into three groups,
namely,

A rights, limiting and explaining.

B privileges, limiting and clauses.
C rights, privileges and restrictions.
o privileges, limiting and explaining.

128. A provision in a life insurance policy which states that any premium not paid by
the end of the grace period be automatically paid by a policy loan if there is
sufficient cash value is called

A the renewal provision.

B an automatic premium loan.
C the reinstatement provision.
o an automatic paid-up provision.

129. A misrepresentation in a life insurance application is considered to be a material

misrepresentation when the

I misrepresentation is not relevant to the insurer's acceptance of the risk.

II insurer discovers the misrepresentation after the policy's contestable
period.
III misrepresentation influence the judgement of the underwriter in deciding
whether to accept or decline the risk or in fixing the premium rate.

A II only
B III only
C I and II
o I and III

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18 Questions continued overleaf
 The Pre-Contract Examination for Insurance Agents

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130. An absolute assignment of an endowment policy entitles the

A assured to take a policy loan.

B assured to surrender the policy.
C assured to receive policy proceeds on maturity.
D assignee to receive policy proceeds in the event of a claim arising.

131. Which one of the following statements is true about the incontestability clause?

A The incontestability clause is in the Insurance Act, Section 16(C).

B The incontestability clause is in the Insurance Act, Section 17(C).
C No policy after expiry of two years from the date on which it was effected
can be called in question by an insurer on the ground that there is a
misrepresentation of age.
D No policy after expirv of two years from the date on which it was effected
can be called in question by an insurer on the ground that there is a
misrepresentation made in the personal statement.

132. Normally, the life insurance company requires when reinstating a

lapsed policy.

A a health declaration
B a formal letter from the insured
C a new application to be submitted
D the consent of the life insurance agent

133. Which one of the following statements is NOT true?

A An assignment effectively transfers the ownership or legal rights under the

policy.
B An assignment is the transfer of rights and obligations under a contract
from one person to another.
C The person who transfers the rights is called an assignor and the person to
whom the rights are transferred is called an assignee.
D The person who transfers the rights is called an assignee and the person
to whom the rights are transferred is called an assignor.

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19 Questions continued overleaf
 The Pre-Contract Examination for Insurance Agents

134. A is the evidence of a contract between the insurer and the

insured.

A letter of acceptance
B life insurance policy
C life insurance proposal form
o written presentation by an agent

135. This type of insurance provides for instalment cash payments to policy holders
with the sum assured being payable in the event of death anytime during the term
of this policy.

A Whole life policy

B Short term endowment
C Single life immediate annuity
o Anticipated endowment insurance

136. The earliest and simplest form of life insurance is the

A annuity scheme.
B whole life insurance.
C level term insurance.
o endowment insurance.

137. One of the following policies does NOT accrue any cash or surrender value.

A Term insurance
B Whole life insurance
C Endowment insurance
o limited payment whole life insurance

138. Accidental death benefit is a form of

A bonus.
B basic benefit.
C permanent benefit.
o supplementary benefit.

These questiollsji.)r insurance companies' training purposes on(v

20 Questions continued overleaf
 The Pre-Contract Examination for Insurance Agents

139. In this policy, payment of the sum insured is made only in the event of the death
of the life assured within the stipulated term of the policy and nothing is payable if
the life assured survives the term:

A children policies.
B group insurance.
C term assurance.
D whole life assurance.

140. Identify the major difference between an ordinary whole life policy and a limited
payment whole life policy.

A An ordinary whole life policy accumulates cash value faster than a limited
payment whole life policy.
B An ordinary whole life policy is non-participating whereas a limited payment
whole life policy is participating.
C An ordinary whole life policy gives protection for a lifetime while a limited
payment policy provides protection for a limited period.
D Premiums on an ordinary whole life policy are payable for the lifetime of
the insured whilst premiums on a limited payment whole life policy are
payable for a limited period.

141. Which of the following are the uses of an endowment policy?

I As an incentive to save in a systematic manner.

II As a convenient and easy means of providing for old age.
III As a means of accumulating a fund for a specific purpose.
IV As a means of hedging against the possibility of untimely death.

A I, II and III
B I, II and IV
C II, III and IV
D I, II, III and IV

142. A participating policy is

A for juvenile policies only.

B a policy that shares in the company"s surplus.
C a policy that determines a company's risk exposure.
D a policy that does not share in the company's surplus.

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21 Questions continued overleaf
 The Pre-Contract Examination for Insurance Agents

143. The policyholder of a life insurance policy can transfer all the rights under the
policy to another person by

A making an absolute assignment of the policy to that person.

S naming that person as the beneficiary of the policy.
C appointing that person as his agent.
D making a conditional assignment of the policy to that person.

144. Mr and Mrs Lee, aged 65 and 60 respectively, are receiving income payment from
a life insurance company. The income will be paid as long as either annuitant is
alive. The income payment will stop upon the death of the last annuitant. What
type of annuity contract has been acquired by the couple?

A Joint life annuity

S Deferred annuity
C Single life annuity
D Last survivor annuity

145. Which one of the following is NOT a feature of an endowment policy?

A It can be a participating or non-participating policy.

S The endowment period can be 10, 15, 20 or 30 years.
C It provides maximum death protection and minimum savings.
D The contract is divided into two parts, namely, a decreasing term insurance
and investment accumulation.

146. Mr Lim purchased a ten years duration convertible term policy at the age of 30. If
he elects to convert the term to a whole life policy at the age of 35 on an attained
age basis, then the premium for the whole life policy will be

A term premium age 30.

S whole life premium age 30.
C whole life premium age 35.
D whole life premium age 40.

147. Life insurance is the most practical means of meeting one's financial obligations
arising from premature death because it

A creates an immediate estate.

S always provides the most money.
C is more accessible than savings or stocks.
D is a compulsory form of long-term savings.

These questions/or illsurance compallies' traillillg purposes OIl{Y

22 Questions continued overleaf

 The Pre-Contract Examination for Insurance Agents

148. The life insurance contract requires the proposer to disclose to the life office all
material facts. For how long must this duty of disclosure continue?

A Until the policy attains cash value.

B For the entire duration of the policy.
C Until submission of the proposal form to the life office.
o Until payment of the first premium and a binding premium receipt is issued.

149. If no insurable interest existed at the time a life policy was effected, the policy
would

A remain valid.
B become voidable depending on the judgement of the high court.
C become void; the company is not obliged to pay a claim under the policy.
o become voidable; the company mayor may not be obliged to pay a claim
under the policy depending on the discretion of management.

150. In life insurance, the law requires the applicant for a life policy to have insurable
interest at the time the

A claim is paid.
B policy is issued.
C insured person dies.
o application for life insurance is made.

»> End of paper «<

These questions/or insurance companies' traill

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