Manulife Business Academy

IC MOCK EXAM

1. A whole life policy provides

a. the highest level of savings for the insured within a specified term of years
b. protection for life of the policyholder with premiums payable for a limited term of
years
c. low cost protection only for a limited term of years with no savings
d. protection with premiums payable for life and a low level of savings as an alternative
to continued protection in old age

2. Limited payment life policies are called such because these policies
a. limit the conditions under which the policies are payable
b. shorten the period when benefits may be paid
c. limit the period during which premiums are payable
d. limit the number of beneficiaries thereby minimizing problems of paying too many
people

3. A term policy provides

a. the highest level of savings for the insured within a specified term of years
b. protection for the life of the policyholder with premiums payable for a limited term of
years
c. low cost protection only for a limited term of years with no savings
d. protection with premiums payable for life and a low level of savings as an alternative
to continued protection in old age

4. A policy requiring the payment of premiums through life, or until the cash
value equals its face value at age 100 is called
a. an income endowment policy
b. a limited pay life policy
c. an unlimited payment life
d. an ordinary life policy

5. Which of the following statements is incorrect?

a. The cash value of a whole life policy builds up at a slower rate than for a 20 year
endowment
b. The cash value of an endowment builds up faster than that of a limited pay life policy
of the same duration
c. Because of its very short duration the cash value of a yearly renewable term policy
grows very fast
d. The cash value in a permanent policy is guaranteed by the Company

6. Insurance provides protection against economic loss by enabling the

policyowner to
a. transfer responsibility for the loss to others
b. take speculative risk to compensate for the loss
c. reduce the possibility of the occurrence of the event causing the loss
d. share the loss with others exposed to a similar risk
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7. Life insurance guarantees cash benefits for all of the following except
a. clean-up fund
b. family dependency period income
c. educational fund
d. mortgage

8. When the death benefit of a policy is restricted in amount during the early
years of the policy, this restriction is known as
a. rate adjustment
b. an increasing death benefit
c. lien
d. a subtractive clause

9. Some insurance companies charge females a lower premium rate than males.
Which of the following reasons justifies that practice?
a. women are less likely to lapse their policies
b. generally women have less hazardous jobs
c. women have longer life expectancy than men
d. generally women buy the higher premium policies

10. The information on a life insurance application relating to an applicant’s

birthday, occupation, and avocation is used by the company primarily for the
purpose of:
a. appraising the risk
b. assigning the risk
c. determining the insurable interest
d. determining a suitable plan of insurance

11. Which of the following statements is NOT correct?

a. When an agent meets a prospect for the first time, he has to sell confidence in himself
b. When an agent makes a sales presentation, he has to sell confidence in the product
c. The primary job of an agent is to get people happily involved with the ownership of his
policy
d. The primary job of an agent is to squeeze as much money as possible out of making a
new sale

12. Life insurance companies make use of the laws of probability in order to
a. estimate future death rates among members of a given group
b. predict when an individual insured will die
c. develop statistics of past deaths among the general population
d. determine the experienced death rate among insured persons

13. Which one of the following statements best describes the Automatic Premium
Loan Provisions:
a. a provision whereby a loan up to the amount of the annual premium is automatic.
b. a provision whereby the company lends the insured the amount of a premium to
assure that the non-forfeiture options will be paid.
c. a provision whereby the company automatically pays the premium out of the loan
value and charges it as loan to the insured, if the said premium due is not paid within
the grace period.
d. a provision whereby one life insurance company will guarantee payment of the
premium to another life insurance company.
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14. Group life insurance covers

a. death, provided it is during working hours and in the place of employment.
b. accidental death only
c. death of employee regardless of cause, except suicide during the first year (sometimes
two years)
d. only death by heart attack, pneumonia or cancer

15. Which statement is incorrect when the owner borrows on a policy?

a. The policy will lapse if, after reasonable notice, the indebtedness exceeds the cash
value.
b. The proceeds of the policy will be reduced by the amount of unpaid loan plus interest,
if the insured dies.
c. Dividends will be reduced by the amount of the current interest.
d. If a large loan is taken after the policy has been in-force for some years, the interest
cost may exceed the premium.

16. "Mr. Martinez walked out of his house one night and was never heard from
again. His wife wanted to make a claim on his life insurance policy, as she
believes he is already 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 could declare him dead
c. It would be 4 years before the court could declare him legally dead
d. It would be 7 years before the court could declare him legally dead

17. Non-forfeiture options are included in whole life and endowment policies to
assure the policyowner that certain minimum policy benefits shall remain with
him even under certain changed conditions. Non-forfeiture values guarantee
the policyholder that
a. The face amount of the policy will remain the same even if the insured’s health
becomes impaired
b. The premiums on the policy will remain the same even when another beneficiary is
added to the policy
c. Any guaranteed policy values will belong to the policyowner even if premium payments
are discounted
d. No death claim will be denied for any misstatement on the application

18. A client has a policy with you for P1,000,000 which is payable to his estate and
he tells you that he wants his wife to receive the money free from Estate Tax.
You recommend that he
a. appoint an irrevocable beneficiary
b. take out a new policy with the bank as a third party
c. make an absolute assignment
d. make a collateral assignment
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19. Mr. Barrio has been insured under the employee group life insurance plan for
several years. If he leaves his job, Mr. Barrio’s group life insurance will
a. terminate as of the date he leaves
b. be changed, upon the employer’s notice to the insurance company, to a permanent
plan of insurance for the same amount
c. continue to provide coverage of the same amount for a period of 31 days during which
Mr. Barrio can convert to an individual policy
d. cover him for a reduced amount of paid-up term insurance until the end of the current
year

20. The incontestability clause

a. permits the Company to pay claims within two years
b. gives the Company the right to rescind
c. prevents the Company from denying a claim after the policy has been in force for two
years
d. makes it necessary for the beneficiary to present proof of death in the event of a death
claim

21. 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

22. 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

23. The only instance when a life insurance contract is treated primarily as an
indemnity agreement is when a
a. person insures the life of a friend
b. creditor insures the life of his debtor to protect himself
c. person insures the life of his or her spouse to protect against the loss of income
earned by the spouse
d. person in a partnership insures the life of his partner to protect the firm against loss
due to the death of that partner

24. Mr. Alvarez bought a P150,000 policy with a 20-year reducing term rider. He
died 5 years after the policy issue date. After his death, his wife received
P150,000 and a monthly income thereafter for 15 years. This definitely has a
a. Family Maintenance Insurance
b. Family Income Rider
c. Straight Family Policy
d. Combination of whole life and level term insurance

25. 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
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26. An agent fills out 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 & b only

27. Most life insurance agents are expressly authorized to perform the following
functions:
a. solicit applications for insurance, accept the initial premium and issue a receipt on
behalf of the insurance company
b. solicit and approve the applications of the proposed insured
c. accept initial premium and waive the insurable interest requirement
d. Appraise the applicants and decide on a standard or sub-standard rating

28. 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.

29. If a policyholder wants to get the maximum immediate value from his non-
participating policy by surrendering it, which of the following would he get?
a. cash value
b. loan value
c. extended term Insurance
d. accumulated dividends

30. 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 the premium being waived

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

32. In a child insurance policy, the Parent Waiver Clause provides that:
a. if the father dies, the policy becomes reduced or paid-up
b. the premiums are waived if the father is disabled or dies
c. if the child becomes disabled, no further premiums are required
d. all premiums are refunded when the father reaches the age of 60.
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33. The Insurance Code specifies that a contract does not take effect unless
a. the policy is delivered to an insured, his assignee, agent, or 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
the application was completed and the time the policy was delivered
d. the insured has named in the policy no fewer than two beneficiaries

34. An insured misstated his age by 3 years in the application indicating that he
was younger than his actual age. If he dies 10 months later, the insurance
company will
a. pay the full face amount
b. not pay any of the benefits
c. refund the premium paid plus interest
d. pay the benefits that the premium would have purchased at the correct age

35. Mr. Jesus Gonzales carried a P500,000 whole life policy for 25 years, never
borrowed from it, but forgot to pay premiums before leaving for a four-month
vacation to the USA. On his return trip, he was killed in a plane crash. As his
estate executor, you saw the lapse notice received from the insurance
company for this whole life policy. What action should you take?
a. None, since the policy has lapsed from non-payment of premium and benefits are not
paid
b. Investigate to see if the insured elected Premium Loan as a non-forfeiture option
c. Apply for the face amount if the policy is to be paid to the beneficiary since coverage
would have been afforded under the extended term insurance non-forfeiture option
d. Apply for the cash value of the policy under the non-forfeiture option

36. All of the following statements about group insurance are true except:
a. each covered employee receives a policy
b. a covered employee who terminates his employment continues to be covered for 31
days after termination date
c. in a noncontributory plan, 100% of the group members must be covered
d. most group policies pay dividends to employer

37. A policyholder tells you that if he dies before his son reaches the age of
majority he wants the life insurance company to hold the sum insured until the
son has reached the age of majority. Which of the following would you
recommend?
a. interest option
b. fixed income option
c. fixed period option
d. none of these

38. The company will allow a policy change from a higher premium to a lower
premium plan provided the insured
a. momentarily assigns the policy to the company
b. obtains written consent from his or her spouse
c. presents satisfactory evidence of insurability
d. buys a new plan altogether
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39. A father has his present life insurance payable to his estate and because he
has now retired he wants to pass the policy on to his son who will assume the
premium payments. Which of the following will he have to appoint his son to
achieve his desire and to protect the son from Estate Tax?
a. Collateral assignee
b. Irrevocable primary beneficiary
c. Revocable primary beneficiary
d. Absolute assignee

40. 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

41. A policy where an irrevocable beneficiary has been designated the insured,
without the beneficiary’s permission, can
a. Avail of a non-forfeiture option
b. Discontinue premium payments
c. Borrow minimal cash loan
d. Alter the dividend option now in effect

42. An insurance company generally has the right to rescind a life insurance
policy if
a. Company discovers at any time that the policy owner was actually a minor at the time
of application
b. Insured person intentionally kills himself during the suicide exclusion period specified
in the policy
c. Insured person is killed in military action during the contestable period of the policy
d. Company discovers during the contestable period that the application contains a
material statement.

43. Which of the following is the least important reason for requiring that
insurance agents be licensed?
a. To establish and maintain high professional and ethical standards
b. To protect the public
c. To give the government adequate control over the conduct of agents
d. To provide additional income to the government through license fees

44. In the event that a policy owner elects the paid-up insurance option
a. The premiums stop and the policy continues for the full face amount until age 65
b. The insurance continues at a reduced amount and with a reduced premium
c. The policy will automatically terminate
d. The premiums cease and protection continues with a reduced amount of Coverage

45. A policy which permits the policyholder to vary the level of premiums, the sum
insured and has its cash values dependent upon the investment performance
and the level of premium paid is known as
a. Participating whole life policy
b. Participating endowment
c. Universal life
d. None of the above
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46. Which of the following statements about “Disability Waiver of Premium Rider”
is false?
a. Disability must occur before a stated date
b. The insured has to die while disabled
c. There is a waiting period
d. It has to be attached to a life insurance policy

47. Paid-up additions

a. Affect both cash and loan value of the policy
b. Don’t affect the cash value of the policy
c. Don’t affect the loan or cash value of the policy
d. Only affect the cash value of the policy

48. The total life coverage of a permanent basic policy can be greatly increased
through the use of
a. An accidental death benefit rider
b. An interim term rider
c. A supplemental term rider
d. None of the above

49. In the case of renewable term insurance, the policy owner may
a. Renew the coverage based on a higher premium
b. Change the life insured at renewal date
c. Renew providing the insurance company agrees to continue coverage
d. Renew at the same premium for further period of years

50. A man applied for a PhP200,000 whole life policy and paid the full initial
premium to the soliciting agent. The agent issued a binding receipt. Under
such a receipt, the insurance company
a. Offers permanent insurance coverage effective as of the date of the application
b. Promises that the insurance coverage will become effective as of the date the
application is approved
c. Guarantees the policy will be issued as applied for
d. Immediately provides interim insurance that remains in effect until the policy is issued
or the application is declined

51. An agent who determines a prospect’s complete financial requirements

preparatory to offering him a policy using the correct selling approach knows
as
a. Counselor selling
b. Total needs selling
c. Planned selling
d. Multiple products selling

52. Name the provision in a permanent life insurance policy under which
premiums are discontinued, full insurance will be maintained for a specified
period:
a. Extended term insurance
b. Paid-up insurance additions
c. Life income option pension
d. Reduced paid-up insurance
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53. The extent of medical evidence required is determined by

a. The age of the applicant and the proposed sum to be insured
b. Occupation of the applicant
c. Financial condition of the applicant
d. Date of the last medical examination

54. If the applicant for life insurance fails to disclose or misrepresents material
fact, the contract is
a. Valid if the insurer issues a policy which is delivered to the applicant
b. Void from the beginning
c. Voidable by the insurer if it has been in force less than 2 years
d. Valid unless the insurer can prove fraud

55. The settlement options provision may provide all of the following except:
a. Payment of the proceeds for the life of the insured
b. Payment of the proceeds over a fixed period
c. Payments of the proceeds in fixed amounts until exhausted
d. Proceeds held by the company, with interest payable to the beneficiary on request

56. In certain situations, a company may file interpleader actions with a Court of
Law. This remedy is used to
a. Determine if the cause of the insured’s death was an excluded risk
b. Decide conflicting claims on the same insurance proceeds
c. Resolve the question of insurable interest
d. Recommend the best settlement options for the beneficiary If the interest on a policy
loan is not paid at the policy anniversary the insurance

57. Which of the following does not have a legitimate insurable interest?
a. An individual on the life of his mistress
b. An individual on his own life
c. An individual on the life of his spouse
d. A finance company on the life of its borrower

58. The basic coverage provided by the life insurance policies may be
supplemented by a separate provision that provides coverage for accidental
amounts or of a different nature. Collectively these provisions are known as
a. riders
b. deposit privileges
c. dividends
d. assignment

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

a. Cash is required for all premiums paid in the grace period
b. A premium is the legal consideration needed to affectuate a life insurance policy
c. The grace period is usually 31 days
d. Premiums which are paid quarterly or semi-annually are higher than those paid
annually

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

a. Renews a term life policy
b. Converts a term policy to a whole life policy
c. Chooses a mode of settlement for the life proceeds
d. Discontinues premium payments for a whole life or endowment policy
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61. If the interest on a policy loan is not paid at the policy anniversary the
insurance company may
a. Demand full settlement of the loan
b. Terminate the contract
c. Refuse to grant future additional loan
d. Increase the present loan by the interest

62. The insured named a primary and secondary revocable beneficiary for PhP
200,000 policy. Which of the following is correct?
a. The designation of a contingent beneficiary is subject to the primary beneficiary’s
approval
b. The insured can add a third beneficiary at any time
c. Any policy loan assignment will require the primary beneficiary’s signature
d. Upon the insured’s death the primary and secondary beneficiaries shall each receive
PhP 100,000

63. A yearly renewable term life insurance policy generally specifies that
a. The policyowner may renew the policy only once
b. Premiums shall increase every time the policy is renewed
c. Evidence of insurability shall be required every renewal
d. Cash values will increase for as long as the policy is in force

64. A businessman has arranged for a development loan which will be available in
1 year from now. Because he is unable to wait until then he has arranged an
interim loan with his bank. The only problem is that the bank wants the loan
secured against the risk of his death. What is the best economic arrangement
that you can recommend?
a. Yearly renewable term
b. Extended term
c. Interim term
d. Decreasing term

65. The basic purpose of a conditional premium receipt are to acknowledge

payment of the initial premium for life insurance and to
a. Guarantee that a policy will be issued as applied for
b. Eliminate the need for acceptance of the offer in forming the contract
c. Backdate the policy to save age
d. Provide insurance coverage earlier than the policy delivery date if certain requirements
are met

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

a. Dividend will be reduced by the amount of the current interest
b. The proceeds of the policy will be reduced by the amount of unpaid loan plus interest,
if insured dies
c. The policy willl lapse if, after reasonable notice the indebtedness exceeds the cash
value
d. If a large loan is taken after the policy has been in force for some years, the interest
cost may exceed the premium
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67. The following statements concerning insurable interest are correct, except:
a. Everyone has an insurable interest in his own life
b. It is deemed to exist by virtue of a relationship by blood or marriage
c. It is deemed to exist if economic loss would occur at the death of the insured
d. It is important for purposes of underwriting risk

68. All the following are Standard Provision of a life insurance policy except:
a. A grace period clause
b. An entire contract clause
c. An automatic premium loan clause
d. A misstatement of age clause

69. A policy that is in force for less than the original sum assured with no
indebtedness has availed of
a. Grace Period
b. Paid-up insurance option
c. The reinstatement provision
d. Cancellation

70. Generally, a reinstatement application will be accepted from the owner of a

lapsed insurance policy
a. Only a premium due date or during the grace period of an unpaid premium
b. Any time during the lifetime of the insured
c. Any time within the extended term insurance period regardless of its length
d. Within a period of three years after the date of lapse as specified in the policy

71. In life insurance, the term "substandard rates" generally is used to refer to
a. Mortality rates that are lower than those expected by the company according to its
mortality table
b. Mortality rates that are lower than the rates suggested by the regulatory authorities
c. Premiums charged to persons who are considered to be higher-than-average risk
categories
d. Premiums charged for policies with low amounts

72. Participating life insurance policies are policies which

a. Permit beneficiaries to exercise certain ownership rights during the lifetime of the
insured
b. Allow variation in the wording of certain provisions
c. Provide for the distribution of dividends to the policyowner
d. Develop profit which must be paid to stockholders

73. A hazardous occupation could be defined as

a. An occupation which exposes the insured to social hazards
b. An occupation in unhealthy working conditions exposing the insured to elements which
can cause sickness
c. An occupation the duties of which expose the insured to a degree of sustaining injury
d. All the above
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74. "Critical years" in the programming of life insurance means:

a. Period during which children are small and cannot provide for themselves
b. Retirement years
c. Years between the time the youngest child is 15 years old and the mother is 62 years
old
d. Years immediately following the insured's death

75. 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. Accidental death rider
b. Guaranteed insurability rider
c. Term insurance rider
d. Waiver of premium

76. Life insurance policy loans are limited to an amount which with interest will
not exceed the
a. Net amount of risk
b. Present value of future premiums
c. Cash value of the policy
d. Total premiums paid

77. In a life insurance company, risk appraisal is necessary to

a. Calculate the mortality rate for a given policy
b. Collate mortality statistics
c. Project dividend rates for participating policies
d. Prevent any anti-selection

78. A housewife without gainful employment applies for a Php500,000 life

coverage. Which of the following should the agent do?
a. Tell her she has no need for it
b. Examine the adequacy of the husband's insurance coverage
c. Suggest she doubles the amount
d. Be grateful

79. All of the following term policies can be sold as a basic policy contract except
a. Six months interim term
b. Decreasing term
c. Ten year term
d. Yearly renewable term

80. One requirement a policy owner must meet in order to reinstate a life
insurance policy is to
a. Agree to apply future policy dividends toward the payment of premium
b. Assign the policy collaterally to the insurance company for the amount of the overdue
premiums plus any outstanding policy loan
c. Pay future premiums at the rate for his or her attained age at the time of
reinstatement
d. Furnish evidence of insurability which satisfactory to the insurance company
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81. In practice, most claims for the death benefits of life insurance policies are
a. Settled by interpleader proceedings
b. Paid on the first policy anniversary after the death of the insured
c. Paid promptly as soon as properly completed claim forms are received by the
company
d. Investigated thoroughly for evidence of misrepresentation or fraud before payment is
made

82. Applicants for life insurance with moderate physical impairments are called
substandard risks and
a. May be insured at increased rates to compensate for the extra hazard
b. Are issued policies without any non-forfeiture values
c. Therefore cannot obtain life insurance in any company
d. Are required to pay premiums on an annual basis

83. If a policyholder changes his occupation without notifying the company, might
it affect the benefits under his policy?
a. Yes, unless the policy specified otherwise, if he engaged in a more hazardous
occupation, his benefits may be prorated
b. No, benefits and premiums may only be changed at the renewal date of the policy
c. No, benefits agreed upon at the inception of the policy may not be changed
d. None of the above

84. Limited payment life policies are called such because those policies
a. Limit the number of beneficiaries thereby minimizing problems of paying too many
people
b. Limit the conditions under which the policies are payable
c. Limit the period during which the premiums are payable
d. Shorten the period when the beneficiaries may be paid

85. Purchasing a continuous-premium, whole life policy rather than a limited

payment, whole life policy gives the policyowner the advantage of
a. Concentration of premium payments during the period of highest earnings
b. Liberal risk selection procedures
c. More insurance protection for the same annual premiums outlay
d. More rapid accumulation of cash values

86. Notwithstanding various possible legal impediments, if the owner of an

endowment at age 65 policy tells you that the maturity of the policy he wants
to provide his church with a monthly donation for as long as the church exists.
Which option do you recommend?
a. Fixed income option
b. Periodic annuity option
c. Interest option
d. Life annuity option

87. Which of the following statement is false?

a. when a policy lapses, the agent loses all future commissions on renewal premiums
b. Too many lapsed policies can cause an agent's agreement to be cancelled
c. Agents with persistent business seldom stay long with one company
d. when a policy lapses, the agent loses a valuable source of prospect
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88. Life Insurance companies practice risk selection primarily to

a. Gather and test mortality statistics
b. Establish dividend rates on participating policies
c. Guard against anti-selection
d. Determine policy reserve amount

89. Under an endowment policy, if the person whose life is insured survives to the
end of the period stated in the policy, the
a. Face amount of the policy will be paid
b. The extended term insurance option will go into effect
c. Policy will terminate without value
d. Policy will automatically be converted to paid-up whole policy

90. 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

91. Which of the following statements regarding insurance premium is FALSE?

a. Cash is required for all premium paid in the grace period
b. A premium is the legal consideration needed to affectuate a life insurance policy
c. The grace period is usually 31 days
d. Premium which are paid quarterly or semi annually are higher than those paid
annually

92. In practice, most claims for death benefits of life insurance policies are
a. Settled by interpleader proceedings
b. Paid on the first policy anniversary after death of the insured
c. Paid promptly as soon as properly completed claim forms are received by the
company
d. Investigated thoroughly for evidence of misrepresentation or fraud before payments is
made

93. If the person whose life is insured dies during the grace period and the
premium was not paid, the amount that the insurance company will pay to the
beneficiary is usually the
a. Face amount of the policy minus the unpaid premium
b. Cash surrender value of the policy minis the unpaid premium
c. Full face amount of the policy
d. Total premiums paid to the date of birth plus interest

94. Applicants for life insurance with moderate physical impairments are called
sub-standard risks and
a. therefore cannot obtain life insurance in any company
b. may be insured at increased rates to compensate for the extra hazard
c. are issued policies without any non-forfeiture option
d. are required to pay premiums on an annual basis
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95. For a given policy, the total 12 monthly premiums are greater than the annual
premium. Which of the following statement is not reason for this?
a. Increased collection cost
b. Premiums are calculated on an annual basis
c. Interest is lost by not having the full premium in advance
d. The company considers the amount that will never be collected if the insured dies
before paying monthly premiums for a full year

96. The guaranteed cash value is

a. The amount that the company will pay if the policy is surrendered
b. The amount which can be borrowed at any one time
c. The paid-up value of the policy
d. The face amount

97. All of the following policies can be used to afford retirement income except
a. Endowment at age 60
b. Whole life
c. Limited payment life
d. Term to age 65

98. Insurable interest is necessary when a person insures another

a. So that the person being insured may be properly appraised
b. To establish that there is a genuine risk
c. Because interest on premiums must be earned
d. To make sure that he will pay the premiums

99. An automatic premium loan differs from other policy loans in that an APL
a. Must be repaid during the policy year in which it is granted
b. Need not be repaid by the policyowner
c. Involves higher interest payments because of the greater cost of administration
d. Goes into effect requiring no separate action from the policyowner

100. Under the law pertaining to life insurance

a. Only minor children can be named irrevocable beneficiaries
b. Only the wife can be named irrevocable beneficiaries
c. Only the wife and the children can be named irrevocable beneficiaries
d. Any person with insurable interest can be named irrevocable beneficiaries