-

1. A single premium policy means a policy

..a) requiring only a single premium each year b) under which only one premium payment is required
c ) only available to single individuals d)on which no more than one premium can be paid in advance

2. A fixed amount added to the premium of a given policy regardless of policy size is known as
a) Policy fee b) Policy reserve
c) Policy values d) extra premium
3. 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
d) all of the above
C ) face amount desired
4. To calculate premiums for the other modes of premium payment the annual premium is
a) divided by the desired number of premium payments
b) divided by a conversion factor for the mode of payment desired
c) multiplied by a conversion factor for the mode of payment desired
d) multiplied by a constant conversion factor
5. Benefits payable under health insurance policies cover
a) accidental death and dismemberment benefits b) expense reimbursement benefits
c) Disability income benefits d) all of the above
6. With employer -employee groups, an employee does not fill out personal application for insurance. Instead he
merely fills out
a) an enrollment card b) a registration card
c) a certificate of insurance coverage d) a salary deduction form
7. In the event an employee leaves the company in which he is a member of its group insurance policy, his group
coverage can be change to an individual policy using the
a) policy exchange facility b) conversion privilege
c) change of plan provision d) policy change form
8. For a contract to be legal and binding
a) parties to the contract must be members of the bar
b) parties to the contract must be legal competent
c) parties to the contract must be above 21
d) parties to the contract must possess blood relationship
 9 A father enters into a life insurance contract on behalf of his child. In this case, the father is the
a) Insured b) Beneficiary
c ) Insurer
d) Applicant owner
10. For life insurance coverage to be valid, insurable interest must exist
a) only on the inception of the policy
b) only at the time of the loan
c) throughout the entire lifetime of the policy
d) both at the time of the policy issue and at the time of the loan but not necessarily throughout the lifetime of
the policy
11. The insurance code specifies that a contract does not take effect unless
a) the policy is delivered to an insured, his assignee or agent, or to a beneficiary
b) payment of the first premium is made to the insurer or its authorized agent
* c) mo change has taken place in the insurability of the life to be insured between the time of the application was
completed and the time the policy was delivered
d) the insured has named in the policy mo fewer than two beneficiaries
12. All of the following would be practicable to become beneficiaries except
a) children by former marriage b) brothers and sisters
c) someone who owes you money d) someone to whom you owe money
13. Under the law pertaining to life insurance
a) only minor children can be named irrevocable beneficiaries
b) only the wife can be named irrevocable beneficiary
c) only the wife and the children can be named irrevocable beneficiaries
d) an person with insurable interest can be named irrevocable beneficiaries
14. When the proceeds of a life insurance policy are left with the company to earn interest
a) income tax is levied on the proceeds b) income tax is levied on the interest earnings of the proceeds
c) estate tax is levied on the proceeds d) donor's tax is levied on the proceeds
15. A person has insurable interest in the life of
a) his child or grandchild
b) any person upon whom he is wholly or in part dependent on, or from whom he is receiving support or
education
c) any person in whom he has pecuniary interest
d) all of the above
 16. Anybody can be designated a beneficiary except
a) a creditor b) minors
c) those expressly prohibited by law to receive donations d) all of the above
17. The common practice of most life insurers is that the life insurance goes into force
a) when the application is received by the branch Office b) when the policy is delivered to the applicant
c ) in accordance with the legal stipulation of the Insurer Code d) when the agent gives a binding receipt
18. The parties involved in life insurance contract are the
a) insurance company and agent b) insurance company and insured
c) agent and insured d) insured and beneficiary
19. According to insurance law, a common-law spouse cannot be designated a beneficiary
a) since there is no benefit of marriage in the relationship
b) if his/her legal partner is still living and the previous marriage has not been legally dissolved
c) since the common-law relationship is an immoral relationship
d) all of the above
20. Which one of the following provisions in a permanent life insurance policy may lapse for non-payment of
premium?
a) Guaranteed Insurability b) Automatic Premium Loan
c) Settlement Options d) Reinstatement Provision
21. The convertible feature of a term insurance policy provides that the policy may be
a) changed to a permanent insurance policy provides that the policy may be
b) changed to another life
c) cashed for a guaranteed sum
d) changed to permanent insurance with evidence of insurability
22. Within two years of buying a life insurance policy, you are accidentally killed when your car hits a tree. In these
circumstances the insurance company will
a) refund premiums because it is suicide b) pay double the face amount
c) pay the face amount d) pay nothing
23. A policyholder may obtain money from the insurance company and still remain insured by
a) surrendering the policy for its cash value b) mscontinuing payment if premium for some period
c) taking a policy loan d) taking the extended insurance option
 24. When you bought an insurance policy on your wife's life you were 27 and she was 26, but you stated that >
were 26 and she was 27. Five years later your wife died. The insurance company will pay
a) the face amount b) the face amount adjusted for misstatement of age
c) the sum of the premium paid d) slightly less than the face amount
25. When explaining dividends, the following information must be supplied
a) that they are not guaranteed b) the dividends paid up in the previous years
c) the anticipated dividends d) the relation to the cost of the policy
26. If the insured dies during the grace period of an unpaid life insurance policy, the amount payable to the
beneficiary is usually the
a) total premiums paid plus interest
b) cash surrender value of the policy minus the unpaid premiums
c) face amount of the policy minus the unpaid premiums
d) full face amount
27. The typical grace period provision in a life insurance policy obliges the life insurance company to
a) establish a policy loan to cover any premium which the policy owner fails to pay by due date
b) keep the policy in force for the duration of any major disability suffered by the policy owner
c) allow the policy owner a three-month extension beyond the due date to make the late premium payment
without penalty
d) none of the above
28. An automatic premium loan differs from the other policy loans in that an automatic premium loan
a) need not be repaid by the policy owner
b) must be repaid during the policy year in which it is granted
c) goes into effect requiring no separate action from the policy owner
d) involves higher interest payments because of the greater cost of adrninistration
29. When a policy is assigned absolutely
a) the assignee acquires all the rights and interests of the original policy holder
b) the original policy holder still can exercise some of the rights
c) the original beneficiary is not changed
d) none of the above
30. If a policy did not contain the name of a beneficiary, the beneficiary will be

a) the wife b) the children

b) the insured's brothers and sisters d) the insured estate
 31. If a policy owner does not pay a premium on the due date, the policy will immediately
a) Lapse b) be converted to a paid-up policy for a lesser amount
c ) go into automatic premium loan d) continue in full force for a grace period

32. If a policy owner whose wife is the irrevocable beneficiary wishes to cash in his policy, he must
a) tell his wife what he is going to do b) first take a loan on the policy
d) have the wife's consent
c) have the check issued in the name of his wife
33. Choose the incorrect statement
The entire contract between the policy owner and the insurance company include
a) the application and the policy
b) any verbal statement made by the agent to the applicant
c) any document attached to the policy when issued
d) any subsequent written amendments to the contract
•

34. If a loan is taken in a participating policy, dividends for that policy while there is a loan against the policy will be
a) Suspended b) paid a reduced rate
c) Unaffected d) increased
35. Interest is charged on policy loans
a) for registered policies only
b) if the loan is outstanding for more than a year, a loan repaid within a year is interest free
c)
d) to replace investment income the insure cannot earn since a loan has been granted
for participating policies only
36. An insurance plan which offers both protection and saving is called
a) Temporary Plan c) Participating Plan
d) Non-participating Plan
b) Permanent Plan
37. A man with moderate means can have maximum protection possible through
a) 20 Yr. Endowment c) Term Insurance
d) Whole life Insurance
b) Limited Pay Life
38. Mr. Juan Valdez wants a policy which will entitle him to receive dividends yearly. What will you recommend to
Mr. Valdez?
a) Participating Plans c) Term Insurance
b) Non-participating Plans d) None of the above
 39. Which of the following can give the longest protection?
a) 20 yr. Endowment c) Ordinary Life
b) Endowment at 65 d) 20 Yr. Term
40. An individual at age 35 purchases a policy under which he will in 20myears receive the face amount of the policy
himself, if he is still alive at that date. This policy is obviously a
a) 20nYr. Endowment c) 20 Yr. Term
b) 20 pay Life d) - None of the above
41. In a 20 Life policy
a) Protection is until age 100, payment of premium is for age 20 years
b) Protection is until age 100, payment of premiums until age 100
c) Protection is for 20 years, payment of premium is for 20 years.
d) Protection is for 20 years, payment of premiums until age 100
42. A participating plan entitles the policy owner to receive a return of excess premiums. Such is termed as:
a) Endowments J c) cash values
b) Dividends d) cash surrender
43. Mrs. Rose Cortez owns a policy which does not provide for the buildup of cash values and whose premiums
remain level Mrs. Cortez owns:
a) Ordinary life c) Decreasing term
b) Limited Pay Life d) Level Term
44. Two attractive features of a term of insurance are:
a) Convertibility and cash values b) Cash values and dividends
c) Protection and dividends d) Convertibility and renewability
45. A term insurance which allows the policy owners to convert it to a permanent insurance within a specified period
without evidence of insurability contains feature
a) Convertibility c) dividend option
b) Renewability d) both a and b
46. A term policy only offers

a) Cash values c) savings

b) Protection d) dividends
 47, The main difference between a Term Plan and a Permanent Plan is
a) Permanent Plans provides both protection and savings while Term Plans offer protection only
b) Permanent Plans provides savings and dividends while Term Plans provide savings only
c) Permanent Plans can be converted and renewed while Term Plans cannot
d) All of the above
e)
48. The savings elements of Permanent Plans allows for the buildup of
a) Dividends c) maturity benefits
b) Cash values d) death benefits
49. A Term Rider is
a) A term policy with a waiver of premium b) Another name for a Convertible Term Policy
C ) A Renewable Term Policy d) A Term insurance added to a Permanent Plan
50. An optional Rider which can be attached to a policy stopping further premium payments in the events of disability
is called:
a) Policy holder protection clause b) Accidental death and dismemberment
c) waiver of Premium d)^total disability monthly income
51. For the waiver of Premium to be effective
a) Disability must be total b) Disability must be permanent
c) Both a and b d) Either a orb
52. If a policy with the accidental death rider becomes paid-up
a) the accidental death rider ceases
b) the face amount of the policy is reduced
c) premiums ion the basic policy stop but the rider premium continues
d) none of the above
53. 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 had been withdrawn
d) If disability resulted from sickness only
54. Mr. Pedro Cruz became paralyzed as a result ofjumping out of the window in a attempt to commits suicide.
Under the usual provisions of disability income policy, he would be entitled to
a) Receive the total disability income benefit and the waiver of premiums
b) Receive partial disability benefits
c) Be granted the waiver of premiums
d) Receive neither disability income nor waiver or premiums
 55. A person wanting a greater coverage for the less amount of premium has an option of attaching what Rider in his
Permanent Life Policy?

a) A waiver of Premium c) guaranteed incurability rider

accidental death rider
b) Term Insurance Rider d)
56. One supplementary benefit offered is a Payor's Benefit which is intended to
a) Provide for the return of premiums to an adult payor in the event that a minor insured dies
b) Provide a waiver of premium benefit in the event of death disability of the person paying the premiums
c) Allow the insurance to pay the policies proceeds to the persons who seems equitably entitled to the proceeds
d) Assure that the adult payor will retain a vested interest in the policy when the insured reaches the age of
majority
57. 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 reduce rate
c) Continue as if the payer is paying the premium
d) Continue but they would be applied toward premium being a waived
58. A Policy with a minor as the propose insured is called
a) Rated policy b) Juvenile policy
c) Regular policy d) Substandard policy
59. Life Insurance Policies for which higher than standard premium rates are payable are said to be
a) Rated policies b) Contingent policies
c) Non-participating policies d) Conditional policies
60. Since the purchase of Life insurance is voluntary choice the individual must meet
a) Agents report b) Certain Standards of health and occupation
b) Minimum income requirement <J) All of the above
61. Which of the following factors would have the least effect on the premium charged for life insurance
a) Age c) income
b) occupation d) all of the above
62. Anti-selection occurs
a) When an agent thinks only of his own interest and now of his policy owners.
b) When you purchase bad stocks with expectations that they will improve.
c) When the insurance company accepts more than a share of poor risk.
d) When person in poor health wish to buy insurance.
 63. In insurance, risk means
a) Chances of you being paid by the company b) Hazards on people's lives
c) Chances of the beneficiary being paid d) None of the above
64. In an application, the information that must be disclosed include
a) only his date and place of birth
b) only his family history
c) every fact in his knowledge that is material to the insurance
d) only information he wants the agents to know
65. Insurance companies have various sources of information and the insured These are:
a) Application form b) Medical information bureau
c) Inspection report d) All of the above
66. The insurance risk are classified as:
a) Unacceptable and acceptable b) Regular and irregular
c) Standard-substandard and declined ' d) Complete and incomplete
67. A risk is considered substandard based an any or all of the following criteria
a) Death, occupation and moral character
b) Occupation, moral character and his family health history
c) Income, educational attainment and occupation
d) Death, income and educational background
68. A hazardous occupation could be defined
a) An occupation the duties of which exposed the insured to a degree of danger of sustaining injury
b) An occupation in an unhealthy working conditions exposing the insured to elements which can caused
sickness
c) An occupation which exposed to insured to social hazards
d) All of the above
69. Statement in the application forms are
a) Guarantees c) warranties
b) Representation d) none of the above
70. Mr. Roel Reyes has been confined in a hospital 3 years prior to his application for insurance. He therefore needs
to give the following information
a) Name of attending doctor, diagnosis, date of confinement
b) The bill and medicines
c) Name of doctor only
d) Date of confinement only
 71. Insurance companies have a source of confidential medical information in applicants lor me insurance,
the
a) Agents confidential report bureau b) Inspection reports bureau
c) Financial standing bureau d) Medical impairment bureau
72. An agent is filling up the Agent's Confidential Report. What information must he put in his report?
a) Information about insured 's standing in the community
b) Information about insured's finances
c) All information he knows which are material to the applications for insurance
d) a and b only
73. an annuity plan
a) Offers life insurance protection b) Offers the waiver of premium benefit
c) Is the same as an endowment plan d) Is a purchase of income
74. The person who purchases the annuity plan is called the
a) Assignor b) Owner c) Insured d) Annuitant
75. A life insurance company earns income two main sources
a) Premium income and investment income
b) Mortgage income and premium income
c) Dividends income and interest income
d) Mortgage income and dividend income
76. Policy reserves our future obligations on the part of
a) fhe insurance commission b) The insurance company
c) The beneficiary d) The policy owner
77. Insurance companies which are owned by the policy owners are examples of
a) Stock companies b) Mutual companies
C) Family corporation d) Open-end companies
78. Stock companies are owned by
a) Policy owners b) Stock holders
c) Creditors d) Government
 79. In the case of life insurance assail is considered completed if the applications is signed and payment of the first
premium is made by the applicant For the sales to be considered completed
a) A medical examinations has to be made first
b) Payment of the first premium has to be made by the applicants in full of in part, as specified One of the
acceptable methods of settlement is by cash or check in part, with a note in the balance.
c) Payment of the first premium has to be made in full by a note first
d) The first premium has to be paid for in full and in cash
80. Why is it important that the application is the basis of the policy?
a) Because the completed application is the basis of the company contract and the company by accept or reject
an application based on the information given on the application
b) For the agent to have available data of his prospect in connection with future sales
c) To avoid necessity of the insurer putting all relevant details in the contract
d) None of the above
81. Which one of the following statements is correct?
a) Advertising by life insurance agents is prohibited
b) All information about a client or a prospective client has to be treated as confidential.
c) The agents should always recommend the amount and type of policy to a prospective client which would be
profitable for the company.
d) When an agent advertises his services in the press, he is not allowed to state the name of his company.
82. All of the following statements regarding a life insurance application are correct except,
a) It must be signed by the applicant.
b) Usually it will be made a part of the policy contract.
c) Misstatements of material facts could void the policy during the contestable period.
d) Statements made on the applications are warranties.
83. Prior to granting a license, the IC requires proof of
a) A clean record of employment. b) A reasonable educational background,
c ) A prospective agent's character and reputation d) All of the above
84. The IC has the power to adjudicate insurance claims against insurance companies for any single claim not
exceeding
a) PI,000,000.00 b)P250,000.00
c) P100,000.00 d)P 500,000.00
85. Which one of the following statements is correct?
a) An insurance agent's license will be renewed when the Commissioner is satisfied that the information in the
application is accurate and all requirements are met.
b) An insurance agent's license is valid only for one month.
c) An insurance agent's license is valid during the lifetime of the agent.
d) An insurance agent's license will be renewed when the corresponding application and fee are received by the
Insurance Commissioner.
 94. The following are unethical practices in the solicitation and procurement ot insurance excepi
a) Misleading estimates of the dividends or shares of surplus to be received thereon.
b) Inducing a policyholder to lapse, forfeit or surrender a policy he holds for another company
c) Misrepresenting the terms of any policy issued by any insurance company or the benefits or advantages
promised thereon.
d) Obtaining or attempting to obtain a license by fraud or misrepresentation.
95. Twisting is
a) Paying the premium on one policy by surrendering the dividends of another policy.
b) The replacement of a policy in one company with another policy in another company.
c) An attempt made by an insurance company to secure the services of an agent from another company.
d) An offense which does not apply to variable concepts.
96. The misstatement of facts by either of the parties of insurance to the other whether in writing or orally prelirninary
and in reference to making the insurance contract is
(
a) Knocking b) Overloading
C ) Misrepresentation i) Twisting
97. Selling a person more insurance than what is warranted by his sources is called
a) overloading c) rebating
b) twisting d) knocking
98. An agent is prohibited from doing all of the following except:
a) Alter an application without the applicants 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) Makeancomplete
99. Inducing insured comparisons of policies
to lapse or forfeit he sells and those offered by cornering insurance companies.
his insurance
a) Is not allowed by the conditions if the contract. b) Is always to the advantage of the policyholder.
c ) Is an offense in the great majority of cases. d) Is a matter left entirely to the discretion of the agent
100. The suicide clause is in effect for
a) The first 6 months b)The first year
c) The first 2 years d)The first 18 months
101. The three non-foifeiture values in a permanent policy are
a) cash dividends, bonus additions and extended term insurance
b) cash surrender value, loan value, assignment
c) waiver of premium, reinstatement and the policy loan
d) cash surrender value, paid value, extended term insurance
 102. In the event that a policy elects the paid-up insurance option
a) the premiums stop and the policy continues for the full face amount until age 65
b) the premium cease and protection continues with a reduces amount of coverage
c) the insurance continues at a reduced amount and with a reduced premium
d) the policy will automatically terminate

103. What are the basic settlement options?

a) cash surrender value, automatic premium loan
b) fixed amount, fixed period, interest, fixed period and for life
c) double indemnity, total disability waiver of premium
d) policy loans, assignment, beneficiary designation

104. In case of misstatement of age

a) the policy is cancelled and a new one is issued for the correct age
b) the insured can be changed
c) extended term insurance option
d) interest on insurance proceeds

105. Which one of the following is a settlement option

a) Policy loan b) Cash surrender value
c) Extended term insurance option d) Interest on insurance proceeds.
106. Name the provision in a permanent life insurance policy under which, if the premium are
discontinued full insurance coverage will be maintained for a specified period.
a) extended term insurance b) paid up insurance
c) paid up additions d) life income options
107. Which one of the following is not derived from the non-forfeiture values
a) Cash surrender value b) Paid up insurance
c) dividends d) Extended term insurance
108. Mr. Dela Cruz stated in his applications that he was 30 years of age and a policy was issued to him
basis. When he died 20 years later it was found out that, infact he was 34 years of age at that time of his
application. In conformity with the insurance of the company
a) Paid the amount of insurance payable to his beneficiary reduced in relation to his actual age at
time that the contract was signed
b) Paid one half of the face value of the policy
c) Need not paid the face value of the policy but refund all premiums paid
d) Paid the full face value of the policy without any extra charges
 In the event that the policy owner elects the paid up insurance options
a) premium stock and the policy continues for a full face amount until age 65
b) premium cease and protection continues for a reduced amount
c) insurance continues at a reduced amount and with reduced premium
d) the policy will automatically terminate
110. If the policyowner commits suicide within one year, what the companies liability?
a) The company is not liable at all
b) The company would be liable for the payment of the face value of the policy
c) The company would be liable for the payment of the premium paid by the insured only
d) None of the above
111. Which of non forfeiture options gives the largest amount for protection
a) fully paid insurance
b) cash surrender value
c) Extended term insurance
d) All of the above give equal protection
112. Any policy which has lapsed can be reinstated subject to normal conditions of proof of insurability with
a) 3 years b) 6 months c) 1 year d) 2 years
113. Life Insurance is
a) a luxury afforded by the rich - b) only available to a specific group
c) a cooperative risk-sharing Plan d) a speculative risk
114. The official who makes the necessary assumption and calculation an respect to the principal elements in
Life insurance premium in order to arrive at the premium rates to be charge is that
a) Life agent b)Senior statistician c) Insurance commissioner d) Actuary
115. Since the purchase of life insurance is a voluntary choice the individual must meet
a) a comprehensive inspection report b) certain standard of health and occupation
c) a satisfactory medical examination 4) a minimum income figure
116. The fundamental advantage of the use of insurance as means of meeting economic looses is that through
insurance these looses are
a) Spread over a large number of people
b) Differed for specify period of time
c) Reduce for the group as a whole through the multiplier effect
I
d) Met as they arise through savings accumulated on a assessment basis
 117. The Term loading means
a) The difference between the gross and net premiums for the purpose of paying the insurance overhead
expenses including commissions and taxes
b) The amount which the company wili lend to the policy holder with the policy as the security
c) The amount payable in the event of the occurrence of a loss which renders him unfit for insurance
d) None of the above
118. 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
119. Life insurance can provide money when income stops because of
a) Disability b) Death c) Retirement d) All of the above
120. The three elements that make up a life insurance premium are
a) Mortality experience, investment earnings and operating expenses
b) Cash values, dividends and paid up values
c) Cash values, loan values and paid up values
d) Past dividend experience, present dividend and projected interest
121. The number of years that persons at a given age will live on the average as shown by the mortality table is
called
a) Law of large numbers c) life annuity
b) Life income option d) life expectancy
122. Part of the premium paid by a policyholder is invested by the insurance company. In premium
computation, this factor is known as
a) Interest
b) Investment
c) Loading
d) Mortality
 ANSWER KEY
1. b 41. a 81. b
2. a - 42. b 82. d
3. d 43. d 83. d
4. c 44. d 84. c
5. d 45. a 85. a
6. a 46. b 94. d
7. b 47. a 95. b
8. b °* 48. b 96. c
9. d 49. d 97. a
1G. a 50. c 98. d
11. b 51. c 99. c
12. c 52. a 100. c
13. d 53. a 101. d
14. b . 54. d 102. b
15. d 55. b 103. b
16. c 56. b 104. c
17. d 57. c 105. d
18. b 58. b 106. a
19. b 59. a 107. c
20. b 60. d 108. a
21. a 61. c 109. b
22. c 62. d 110. c
23. c 63. b 111. c
24. b 64. c 112. a
25. a 65. d 113. c
26. c I* 66. c 114. d
27. d 67. b 115. b
28. c 68. d 116. a
29. a 69. b 117. a
30. d 70. a 118. d
31. d 71. d 119. c
32. d 72. c 120. a
33. b 73. d 121. d
34. c 74. d 122. a
35. c 75. a
36. b 76. b
37. c 77. b
38. a 78. b
39. c 79. a
80. a
40. a