CEILLI EXPECTED QUESTION

1) Which type of investment offer bigger capital and income growth?

A) investment with little risk

B) Investment with high risk
C) Investment with moderate risk
D) Investment with no risk

2) Share price are generally higher in the following situations

I. when there are more buyers than share available for sale

II. when the company making a good profit

III. when country economy unstable

IV. when the interest rate are higher

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

3) The factors do NOT influence the choice of deposits in bank include

I. prevailing market condition

II. The gender of depositor

III. The funds available for investment

IV. The academic qualification of the depositor

A) I and II
B) I and III
C) II and III
D) II and IV
4) What does the term “Prospect” refer t ?

A) Percentage of closing deal

B) Potential customer
C) Potential product
D) The future of the agent

5) The following are secondary objective of the investment EXCEPT

A) Safety
B) Hedging inflation
C) Retirement income
D) Achieving financial freedom

6) Which of the following considered INCONSISTENT with after- sales service?

A) Providing a basis for future sales on current needs

B) Explaining the policy’s provisions term and condition
C) Establishing the customer/agent relationship
D) Strengthening the customer /agent relationship

7) With regard to the investment-linked life policy, the uncertainty of investment gains or losses is shifted to

A) Insurers
B) Insured
C) Agents
D) Brokers

8) Using the dual policy method, calculate the cash value of 5000 units purchased at an offer price of RM 3 and sold at
bid price of Rm 1 with a mortality charge of 1% and RM 100 policy fee

A) RM 14,750
B) RM 4,850
C) RM 4,600
D) RM 9,350
9) What are the benefits of investing in investment link funds?

I. diversification

II. Flexibility

III. Expertise

IV. Easy access to well diversified investments

A) I,II and III

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

10) Investment – linked life insurance policies must have a minimum death benefit of

A) RM 3000
B) RM 4000
C) RM 5000
D) RM 6000

11) What fund is used to determine investment return for a with-profit life insurance policy?

A) Investment fund
B) Fixed asset fund
C) Life fund of the insurer
D) Excess of premium over classes fund

12) Short term government funding issued on a regular basis with payment normally within a year is known as ?

A) Government bond
B) Central bank bills
C) Finance bills
D) Treasury bills

13) Which of the following is NOT a characteristic of SUKUK bonds?

A) They are issued by pooled funds

B) They may be guaranteed or not by originator
C) They are based on hard assets that generate steady income and expectation
D) None of the above
14) Some of the information contained in sales materials to ensure adequate disclosure and transparency of investment
linked life insurance policy is

I. a general description of the investment policy and objective of the fund

II. the basis and frequency of valuation of assets underlying the fund

III. guarantee

IV. clear information that the investment risks are to be borne by the policy owners

A) I,II and III

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

15) What are the overriding obligations of intermediaries?

I. to sell only for one insurer

II. to conduct business at all time with utmost good faith

III. to upload integrity in conducting business

IV. to satisfy all customer demands

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

16) Using the single pricing method, calculate the cash value of 4000 units at a units at unit price of RM 1 a mortality
charge of 2% and a RM 100 policy fee

A) RM 3500
B) RM 3800
C) RM 3820
D) RM 3620

17) Which of the following statements is true regarding convertible stocks?

A) Convertible stocks can be converted to fixed income security

B) The decision to convert depends on the permission of the securities commission
C) The investor is entitled to a share of the company’s profit through dividends declared
D) None of the above
18) All life insurers have made it mandatory for agents to submit duly completed ______ together with new business
proposal form

A) Option form
B) Medical reports
C) Customer fact find form
D) All of the above

19) Funds that are restricted to investment in particular geographical regions or industries are known as ______ funds

A) Bond
B) Managed
C) Specialized
D) Balanced

20) The premium relief is allowable when the _____is on the life of the spouse of the individual

I. life insurance

II. deferred annuity

III. general insurance

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

21) What need to be understood before giving clients advice on investment ?

A) The amount of profit that can be made

B) The importance of managing investment
C) The key consideration in investment
D) The key consideration in management
22) Some of the criteria used to compare conventional insurance products with investment –linked insurance products
are:

I. surrender benefit

II. investment return

III. investment risk

IV. management expenses

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

23) Which type of investment fund fluctuates drastically in times of a volatile stock market?

A) Property fund
B) Equity fund
C) Fixed deposit fund
D) Specialized fund

24) What type of fee is charged under the investment-linked life policy to cover the administrative expenses of setting
up the policy?

A) Policy fee
B) Mortality charges
C) Surrender charges
D) Annual management charges

25) What is the purpose of a proposal form?

A) To disclose all material fact which will influence the acceptance of the proposal by insurer
B) To simplify the work of an agent
C) To serve as ground for claim rejection
D) To include a statement on claim procedures
26) The administrative fee, insurance charge and fund management fee under an investment –linked life insurance
policy are :

A) Guaranteed
B) Not subject to review
C) Subject to change by insurance companies
D) Always “up front” charges

27) Misrepresentation resulting in inducing a policy owner to cancel or have his own policy made paid-up in order to
purchase a new policy to earn more income for the agent is known as

A) Switching
B) Changing
C) Replacing
D) Twisting

28) The value of an investment- linked life policy is determined by the

I. unit price of fund

II. market value of fund

III. number of units accumulated

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

29) In claim settlement, a life insurer may reject or delay a claim on

A) The grounds of non –disclosure or misrepresentation

B) Late submission of accompanying documents
C) Non-payment of claim processing fees
D) A claim reported after the time limit for notification

30) The trust deed in a unit trust sets out the following EXCEPT

A) The accounting and auditing rules

B) The fund managers investment powers
C) The structure of the unit holders
D) The remuneration of the fund managers
31) Which of the following statements are true?

I. equity assets are inherently lower risk in nature

II. bond funds are also known as “income” or “fixed income” funds

III. specialized funds are normally segmented based on geographical regions or particular
industries

IV. property funds are generally considered to be safer than equity funds, but have lower
liquidity

A) I,II and III

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

32) According to the textbook, there is a _______ between expected return and risk that should prevail in a rational
environment

A) Trade off
B) Correlation
C) Relationship
D) Reverse proportion

33) ________is a form of misrepresentation in which a policy owner is induced to discontinue an existing insurance
policy, and purchase a new policy

A) Twisting
B) Switching
C) Withdrawal
D) Money laundering

34) Which type of investment –linked fund has lowest risk?

A) A less diversified fund

B) A company with a big fund from many policy owners
C) A well-diversified fund
D) A well-known insurance company specializing in certain funds
35) Under the calculation of the death benefit on unit value or death cover basis, what are the criteria for payment upon
death?

A) The unit value

B) The unit value plus sum assured
C) The sum assured
D) Unit value or death cover, which ever higher

36) What is an important ingredient for a successful sales interview?

A) The agents skill in handling objection from a prospect

B) A reduction in the product pricing
C) A change in the sales plan
D) The agent making objection and drawing the prospects attention to the advantages of the product

37) In investment-linked insurance, when the investment premium placed in unitized fund?

A) When stocks market goes up

B) Once the premium has been paid
C) When property price falls
D) When the policy holders agrees to pay the full premium

38) During an equity market crash,_______ usually the first to depreciate in high amounts

A) Property funds
B) Balanced funds
C) Corporate funds
D) Equity asset/funds

39) What are the two factors which determine the value of an investment-linked insurance policy?

I. the sum assured

II. the investment return

III. the value of each unit

IV. the number of units the policy has accumulated up to date

A) I and II
B) II and III
C) II and IV
D) III and IV
40) Which of the following charges will NOT be levied on investment-linked life insurance policies

A) Premium holiday fee

B) Mortality charges
C) Surrender charges
D) Annual fund management fee

41) An investment-linked life insurance policy has a free look provision at least____ days

A) 14
B) 15
C) 21
D) 30

42) Under the current investment-linked whole life plan, the policy has total flexibility to alter a policyholders need for
investment and protection in accordance with the

A) Market trend
B) Insurers suggestion
C) Policyholders wishes
D) Change of law

43) The deposit insurance system in Malaysia launched in September 2005 was managed by

A) PIDM
B) PIAM
C) LIAM
D) BNM

44) Under the 1996 budget, an extra tax deduction of ______ was allowed for education and medical insurance
premium

A) RM3000
B) RM6000
C) RM9000
D) RM5000
45) If the bond fund is worth of RM 10 million and there are 2 million units, what will be the price per unit for the bond
fund?

A) RM1
B) RM3
C) RM5
D) RM7

46) Mr Nathan intends to buy a single premium investment-linked life policy with a single premium of RM 50 000. He
wants to redeem the policy’s value after eight years.

Calculate the death cover now, if its based on sum assured cover only .

A) RM50,000
B) RM62,500
C) RM67,500
D) RM51,000

47) The switching facility provided in investment-linked life insurance policies is very useful for the purpose of :

A) Financial planning by policy owner

B) Profit planning by life offices
C) Sales planning by fund managers
D) Assets planning by trustee

48) What is the amount of life cover for Encik Ahmad who bought a single premium investment-linked whole life plan
with RM20,000 single premium ?

A) RM5,000
B) RM10,000
C) RM25,000
D) RM30,000
49) Which of the following criteria are normally used when comparing investment-linked life insurance policies with
traditional policies?

I. policy loan

II. Option to top up

III. premium computation

IV. investment returns and risks

A) I,II and III

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

50) In a proposal for whole-life or endowment assurance, which of the contract features below must be highlighted in
the literature

I. that these are long term contracts

II. that these are safe contracts

III. that the surrender values in the early years are often less than the total premium paid

IV. these are mainly for life coverage

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

51) Who has limited investment option?

A) A speculative investor
B) A long term investor
C) An investor with large funds available
D) An investor with small fund available

52) Investment link life insurance was introduced in Malaysia in the late

A. 1970s
B. 1980s
C. 1990s
D. 2000s
53) The investment linked insurance business is a contract of

A. Investment in human life

B. Insurance providing life coverage and investment return
C. Investment in properties
D. Life insurance

54) Deposit insurance coverage includes the following, EXCEPT

A. All current and saving deposit accounts and fixed deposits

B. Foreign currency fixed deposit accounts
C. Islamic and conventional fixed deposits
D. Unit trust bought through the bank

55) According to the textbook, there is a law that states that our investment returns are ________ to the risk we take

A. Directly proportional
B. Positively proportional
C. Negatively proportional
D. Indirectly proportional

56) What is the term given to the strategy of placing money into several different categories of investment ?

A. Diversification
B. Hedging
C. Profit maximization
D. Risk control

57) In times of volatile equity market, the cash and maturity values of an investment linked life insurance policy will

I. Rise
II. Fall drastically
III. Fluctuate slightly

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

58) The term and the interest rate of government bond

A. Are fixed
B. Vary according to the amount invested
C. Are negotiable
D. Change in response to market trends
59) From the statements about the similarities and differences between single premium investment linked life insurance
( SP-IL) and Unit trust (UT) given below, select the statement that not true

A. EPF withdrawal is allowed for investment in both UT’s and SP-IL

B. Fund switching is allowed for both UT’s and SP-IL
C. A policy fee is charged only in the case of SP-IL
D. Cost of insurance only applicable to SP-IL

60) Investment linked life insurance policies

A. Lack the smoothing process of traditional with-profit life policies

B. Have a greater smoothing process than traditional with-profit life policies
C. Always receive greater investment returns than traditional with-profit life insurance
D. Will never suffer any financial losses

61) Who do buying and selling of shares for investors

A. Insurance brokers
B. Stock brokers
C. Stock agents
D. Share advisers

62) What is the minimum age to apply own investment linked life insurance policy

A. 17
B. 16
C. 18
D. 19

63) Valuation of units in an investment linked fund must be done

A. Every day
B. Every business day
C. Every month
D. Once a year

64) If a policy cancelled within free look period the insurer shall not refund

A. The unallocated fund

B. 5% bonus
C. Value of unit
D. Any insurance charges and policy fee that been deducted

65) When can a unit split/ combination can be done?

A. Once in a Financial year

B. Once in a Month
C. Daily
D. Every Quarter
66) According to illustrated return for generic fund, the projected investment return for managed fund should be within
the limits

A. 3% to 8%
B. 3% to 9%
C. 4% to 7%
D. 4% to 9%

67) Secured loans with security being charged on the company’s property or on its asset

A. Convertible stock
B. Loan
C. Debenture stock
D. Trading

68) The death and disability benefits of an investment linked policy are based on

A. The sum assured and guarantee investment return

B. The sum assured and/or value units
C. On the guaranteed investment return only
D. The minimum fixed value unit

69) When in doubt about the code and conduct, employees can seek guidance from

I. An experience agent
II. The company management
III. Bank Negara
IV. Their respective heads of department
A. I,II,III
B. I,II and IV
C. II,III and IV
D. I,II,III and IV

70) Which funds are the top end of the risk-return graph?

A. Cash fund
B. Equity fund
C. Balanced fund
D. Managed fund

71) Unsecured loans to a company are known as

A. Debenture stock
B. Government stock
C. Loan stock
D. Convertible stock

72) The payment made to the insured upon the cancellation of a policy is called?

A. Investment value
B. Return of premium
 C. Surrender value
D. Penalty payment

73) Traditional guaranteed without life insurance products do NOT include

A. Temporary assurance
B. Non-participating whole life insurance
C. Investment linked insurance
D. Non-participating endowment insurance

74) Amount of premium allocated to buying of units is RM5000

o Service charge 5%
o Unit price Rm 1/unit
o Mortality charge 1%
o Policy fee Rm 72

Based on the above information, calculate its cash value using single pricing

A. Rm 4,250
B. Rm 4,750
C. Rm 4,900
D. Rm 4,630.50

75) Currently, the financial instruments in which investment-linked funds are invested

I. Cash
II. Equity
III. Property
IV. Diversified

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

76) Investment linked policies normally consist of what kind of funds?

I. Equity fund
II. Property fund
III. Cash fund
IV. Bond fund

A. I and II C. III and IV

B. I and IV D. I,II,III and IV
Answer
1. B 26. C 51. D 76. D

2. C 27. D 52. C

3. D 28. B 53. B

4. B 29. A 54. D

5. A 30. A 55. A

6. C 31. C 56. A

7. B 32. A 57. A

8. B 33. A 58. A

9. D 34. C 59. A

10. C 35. B 60. B

11. C 36. A 61. B

12. D 37. B 62. C

13. D 38. D 63. B

14. C 39. D 64. B

15. C 40. A 65. A

16. C 41. B 66. A

17. C 42. B 67. C

18. C 43. A 68. B

19. C 44. A 69. C

20. A 45. C 70. B

21. C 46. B 71. C

22. D 47. A 72. C

23. B 48. C 73. C

24. A 49. D 74. D

25. A 50. B 75. C