General Insurance Exam Questions and Answers

IIAP EXAM SET 3 Instructions: 1. Encircle the letter of your answer. 2. You are given one (1) hour to finish the examination. 1. An insurance plan which offers both protection and saving is called a) temporary plan c) participating plan b) permanent plan d) non-participating plan 2. Mrs. Rose Cortez owns a policy which does not provide for the build up of cash values and whose premiums remain level. Mrs. Cortez owns: a) Ordinary Life c) Decreasing Term b) Limited Pay Life d) Level Term 3. For the waiver of premium to be effective a) disability must be total b) disability must be permanent 4. A policy with a minor as the proposed insured is called a) rated policy c) regular policy b) juvenile policy d) substandard policy 5. 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 agent to know 6. An agent is filling up the Agent’s Confidential Report. What information must he put in his report7 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 7. Stock companies are owned by a) policyowners b) stockholders 8. 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 c) both a & b d) either a or b c) creditors d) government Page 1 9. An insurance agent’s license can be revoked for a) fraudulent practices b) violation of any provision of the Insurance code c) misrepresentation in the application for license d) any or all of the above 10. Selling a person more insurance than what is warranted by his sources is called a) overloading c) rebating b) twisting d) knocking 11. What are the basic settlement options? a) cash surrender value, automatic premium loan b) fixed amount, fixed period, interest, fixed period and for like c) double indemnity, total disability waiver of premium d) policy loans, assignment, beneficiary designation 12. In the event that the policyowner elects the paid up insurance option a) premiums stop 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 1 3. Since the purchase of life insurance is a voluntary choice the individual must meet a) a comprehensive inspection report b) certain standards of health and occupation c) a satisfactory medical examination d) a minimum income figure 14. 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 b) life income option c) life annuity d) life expectancy 15. A man with moderate means can have maximum protection possible through a) 20 Yr. Endowment c) term insurance b) limited pay like d) whole life insurance 16. Two attractive features of a Term insurance are: a) convertibility and cash values b) cash values and dividends c) protection and dividends d) convertibility and renewability Page 2 17. If a policy with the accident death rider becomes paid up a) the accidental death rider ceases b) the face amount of the policy is reduced c) premiums on the basic policy stop but the rider premium continues d) none of the above 18. Insurance companies have various sources of information about the insured. These are: a) application form c) inspection report b) medical information bureau d) all of the above 19. In the case of life insurance, a sale is considered completed if the applications is signed and payment of the first premium is made by the applicant. For the sale to be considered completed a) a medical examination has to be made first b) payment of the first premium has to be made by the applicant in full or in part, as specified. One of the acceptable methods of settlement is by cash or check in part, with a note for 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 20. A term insurance which allows the policyowners 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 & b 21. In insurance risks are classified as a) unacceptable and acceptable b) regular and irregular c) standard, substandard and declined d) complete and incomplete 22. 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 23. In the event an employee leaves the company in which he is a member of its group insurance policy, his group coverage can be changed to an individual policy using the a) policy exchange facility b) conversion privilege c) change of plan provision d) policy change form 24. Under the law pertaining life insurance Page 3 a) b) c) d) only minor children can be named irrevocable beneficiaries only the wife can be named irrevocable beneficiaries only the wife and the children can be named irrevocable beneficiaries any person with insurable interest can be named irrevocable beneficiaries 25. 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 26. Which one of the following provisions in a permanent life insurance policy may lapse for nonpayment of premium? a) Guaranteed insurability b) Automatic premium loan c) Settlement options d) Reinstatement provision 27. The convertible features of a term insurance policy provide that the policy may be a) changed to a permanent insurance policy without evidence of insurability b) change to another life c) cashed for a guaranteed sum d) changed to permanent insurance with evidence of insurability 28. 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 29. A policyholder may obtain money from the insurance company and sti!! remain insured by a) surrendering the policy for its cash value b) discounting payment of premium for some period c) taking a policy loan d) taking the extended insurance option 30. When you bought an insurance policy on your wife’s life you were 27 and she was 26, but you stated that you were 26 and she was 27. Five years later your wife died. The insurance company a) b) c) d) the face amount the face amount adjusted for misstatement of age the sum of the premium paid slightly less than the face amount Page 4