PCE A & C ENGLISH SET A 1. " By spreading the risk of loss faced by a specific person or enterprise, all parties who pool their resources to pay for individual losses." This statement refers to ...A. agentB. insuranceC. warrantyD. broker 2. How does the insurance provide protection?A. by transfer the risk to other parties' shoulderB. eliminate the risk by the concept of pooling of riskC. help people to gain profitD. insure all types of risk 3. Insurance can be classified into...A. Life InsuranceB. General InsuranceC. A & BD. Risk Insurance 4. What is the Law of Large Number?A. Large number of similar loss exposureB. Loss exposure must be independentC. Random or chance occurrence of lossesD. All of the above 5. Which risk is not covered by Life Insurance?A. Premature deathB. Continuous stream of income during retirementC. Sickness or disabilityD. Suicide 6. Malaysian Insurance Business is control by...A. Insurance Act, 1963B. Insurance Act, 1996C. Insurance Act, 1966D. None of the above 7. The role of an insurance agent..A. bring financial relief in the event of property lossB. inculcate the discipline of savings among the working populationC. bring financial relief to aggrieved dependants of insured people who meet with an untimely deathD. All of the above 8. Risk cover by Life Insurance...A. Premature deathB. Continuous stream of income during retirementC. Sickness or disabilityD. All of the above 9. What is the cause of loss?A. HazardB. PerilC. RiskD. Sick 10. ____________ is determined when the total number of possible events are known.A. Judgmental probabilityB. Empirical probabilityC. Priori probabilityD. Risk 11. When a person knows that he is suffering from a disease but he still has the intention to hide this fact from the insurance company, this is called...A. anti-selectionB. moral hazardC. physical hazardD. peril 12. The insurance insure the following risk except...A. property damageB. premature deathC. sickness and disabilityD. investment and betting 13. Pure Risk is defined...A. lost investment in stock marketB. lost betting in a horse raceC. unprofitable in business ventureD. risk of premature death 14. Which of the following is NOT a Pure Risk?A. FireB. FloodC. RobberyD. Gambling 15. Moral Hazard defined...A. dishonestyB. carelessnessC. unreasonablenessD. All of the above 16. Which of the following bodies is NOT a characteristic of an insurance risk?A. It must be of a fortuitious natureB. It must be speculative in natureC. It must be a pure riskD. It must not be against public policy 17. The least effective approach to risk management...A. Ignoring the riskB. avoiding the riskC. transferring the riskD. retaining the risk 18. The characteristics of insurable risk...A. financial valueB. large number of similar riskC. pure risk onlyD. All of the above 19. Which one among the occupations stated below is non-hazardous?A. CookB. Trapeze artistC. Forklift operatorD. Long distance bus driver 20. As an entrepreneur, you may encounter one of the following situation...A. pure riskB. no riskC. pure and speculative riskD. speculative risk 21. In the practice of his profession, an underwriter is concerned with the assessment of risk. His assessment will almost exclusively be based on the consideration of both physical and moral hazards. Factors influencing the physical hazard would include:I. The health of the proposed insured II. The family of the proposed insured III. The age of the proposerA. I & IIB. II & IIIC. All of the aboveD. I only 22. Which of the following methods of handling risk is closest to insurance?A. Risk retentionB. Loss prevention and controlC. Transfer of risksD. Risk avoidance 23. Which of the following CANNOT be insured?A. To protect one's investment in case of depressionB. To protect one's car from being stolenC. To protect one's house when there is a fireD. To protect one's loss of income when disabled in an accident 24. What do you understand by fortuitous losses?A. An accident brought about intentionally by the insuredB. Losses that occur due to wear and tear and depreciationC. The loss is not within the control of the insuredD. An incident that occurs as expected 25. The selection of lives is a process of identifying the adverse factors. These factors are broadly classified into two categories. They are...I. physical hazards II. natural hazards III. catastrophic hazards IV. moral hazardsA. I & IIB. III & IVC. I & IVD. I, II, III & IV 26. In Life Insurance, insurable interest must exist...A. at the time of lossB. at the beginning onlyC. at the beginning and at the time of lossD. at the time when the contract has been in force 27. What is material fact?A. Is a fact which influence in deciding the acceptance of riskB. The property that insured under a policyC. Is a fact that help to compensateD. Is anti-selection 28. The consequence of breach of utmost good faith:A. a contract becomes voidB. a contract becomes voidable until the insurance company treat it voidC. a contract becomes unenforceableD. a contract still in force 29. Life Insurance is NOT ...A. a contract of indemnityB. a valued contractC. insured the life of a human beingD. reduction of losses 30. Life Insurance is NOT a contract of indemnity because...A. the insurable interest cannot be measured and cannot restore the insured to the same financial positionB. it involves a large number of moneyC. it is very unpredictableD. it gives extra proceeds to the insured 31. Breach of utmost good faith may occur in the following ways:I. By concealment II. By non-disclosure III. By innocent misrepresentation IV. By fraudulent misrepresentation A. I, II & IIIB. I, III & IVC. II, III & IVD. All of the above 32. The principle of Utmost Good Faith is that...A. the insured has to disclose some important facts regarding the risk to be insuredB. the insured has to disclose partial important facts regarding the risk to be insuredC. the insured has to disclose all important facts regarding the risk to be insuredD. All of the above 33. The principle of indemnity requires the insurers to...A. restore the insured to the same financial position as he had enjoy immediately before the lostB. restore the insured to better financial position as he had enjoy immediately before the lostC. restore the insured to the same financial position as he had enjoy immediately after the lostD. All of the above 34. Which of the following is CORRECT about Utmost Good Faith?I. It is a contract of uberrimae fides II. It is binding on the insurer III. It is binding on the insured IV. It is binding on the agent who sold the life policy A. II & IV onlyB. I, II & III onlyC. I, II, III & IVD. I & II only 35. It is the duty to the proposer to disclose clearly and accurately all material facts relating to the insurance proposed. Material facts, in this instance, would include:I. Facts which tend to render a risk proposed greater than normal II. Facts necessary to explain the exceptional nature of a risk proposed for insurance, without which, the insurer would justifiably believe the risk to be normal III. The proposer's medical history IV. The proposer's occupation A. I & II onlyB. I, II & IIIC. I, III & IVD. I, II, III & IV 36. A person effecting a Life Insurance policy on his own life has an insurable interest which is...A. unlimitedB. limited to his annual incomeC. dependent on his saving capacityD. dependent on his state of health 37. The company that owns by the shareholders are...A. insurance companyB. proprietary companyC. cooperative companyD. mutual company 38. Who will prove the losses and investigate the cause?A. insurance companyB. agentC. loss adjusterD. loss assessor 39. Recruiting, training of employees is a job of...A. Marketing DepartmentB. Administration DepartmentC. Investment DepartmentD. Customer Service Department 40. Centralization means...A. the underwriting, renewals etc will be handled at branchesB. no more branchesC. the underwriting, renewals etc will be handled at headquartersD. the headquarter will act as a sale outlet too 41. This person works for the insurance company and his primary responsibility is to access all applicants to determine the risk they present to the company and to decide whether to accept these applicants,A. UnderwriterB. Claims ExecutiveC. Medical ExaminerD. Accountant 42. The association established to protect the interest of insurance brokers is...A. IBAMB. NAMLIAC. PIAMD. LOMA 43. Who among the following is NOT the main components of the market for private insurance?A. BuyersB. UnderwritersC. SellersD. Intermediaries 44. Who among the following are termed as the intermediaries in the insurance business?I. Adjuster II. Agent III. BrokerIV. UnderwriteA. I & II onlyB. I & IV onlyC. II & III onlyD. III & IV only 45. To instil a better level of discipline and professionalism in the work force in insurance, the company established...A. Code of Utmost Good FaithB. Code of Ethics and ConductC. PIAMD. LIAM 46. Which of the following statements are consumers' basic rights?I. Right to satisfaction II. Right to choose III. Right to redress IV. Right to a safe & clean environmentA. I & IIB. I & IIIC. I, II & IIID. All of the above 47. The objective of the Insurance Mediation Bureau is to...A. undertake research in the field of insurance and other related subjectsB. safeguarding the interest of those engaged in Life Insurance selling and sales managementC. provide dispute resolution procedure for policyholders (Personal Insurance only) and insurersD. establish a sound insurance structure in Malaysia 48. The main purpose of the guarantee scheme fund established under the Insurance Act is:A. to meet the liabilities of an insolvent insurance companyB. to ensure all insurance companies insolventC. to pay the liabilities of an insurance companyD. to ensure all insurance companies are solvent 49. Under the Insurance Act, 1963, a person attaining the following age are allowed to enter into a contract for a life policy.A. 10B. 18C. 21D. 16 50. Select all of the following statements which are true.I. A contract is legal that is, it can be enforced by law II. A contract is legal only when both parties voluntarily live up to the terms of the agreement III. A contract involves two or more parties IV. Consideration must be a part of the agreementA. I & III onlyB. II & III onlyC. I, III & IV onlyD. All of the above 51. An agent is encouraged to collect premium from the proposer for submission together with the proposal form. Why?A. To ensure that proposer will not change his mind since he has pay the premiumsB. The risk will not commence unless the first instalment premium is paidC. This will save the agent the additional trip of collecting the premium at another timeD. The commission from the premium will help the agent to cover his expenses incurred in the prospecting 52. Which of the following accepts part of the risk from another insurer?A. ReinsurersB. Loss adjustersC. Insurance agentsD. Insureds 53. When can a Life Insurance Company void a life policy?A. When an unpaid policy loan, plus interest, equals the cash value of the policy Center for Learning Excellence – AT&D Dept 14 PCE PART (A&C)B. When an unpaid policy loan, plus interest, equals the face value of the policyC. When the policy owner ceases to make payments on the loanD. When the policy owner ceases to exist 54. Which of the following is NOT a requirement for the formation of a valid contract?A. Offer and acceptanceB. Legality of objectC. Financial capacityD. intention to create legal relationship 55. One of the essential elements in the formation of a contract is consideration. In insurance contract, consideration refers to the...I. premium paid by the insured II. commission paid to the agent III. promises made by the insurer under the life insurance contract to pay the sum insured and any accrued bonusesA. I onlyB. I & III onlyC. II & III onlyD. All of the above 56. A Life Insurance Policy is a contract between...A. the life office and insuredB. the life office and beneficiaryC. the life office, insured and beneficiaryD. the life office, insured and beneficiary and the agent 57. The duty of an agent includes...A. to render accounts to the principle as requiredB. not to disclose confidential information obtained during the course of his dutiesC. not to delegate his duties to sub-agents without authorityD. All of the above 58. The agent can represent __________ general insurance companyA. 1B. 4C. 2D. more than 1 59. Who is an universal agent?A. One who is appointed to do a specific act or transactionB. One who may do anything for his principal within the limits of a general authority conferred upon himC. One who has unlimited authorityD. None of the above 60. An agency relationship may be created by the following way(s):I. By implication of lawII. By express appointment III. By subsequent ratification of an agent's unauthorised actA. I onlyB. I & II onlyC. I & III onlyD. All of the above 61. An agency may be terminated by the following acts EXCEPT one:A. The principal receiving many complaintsB. The agent renouncing the agencyC. The principal revokes the authorityD. The insurance company becoming bankrupt 62. The duty of an agent includes:A. Comply with his principal's instructions and to notify him when compliance becomes impossibleB. Delegate his duties to a sub-agent without authority, whether express or impliedC. Let his own interest conflict with his obligation to the principal whenever possibleD. Take secret profit from his client 63. An agent is a person who acts on behalf of another person. The person whom he represents is called the...A. insuredB. third partyC. principalD. broker 64. An agent of a life company is authorised to...A. issue policies binding on the companyB. print premium receiptC. solicit business, collect the initial premium and pays it to the companyD. get commission from the company 65. Grace period is a term of the contract that a due premium shall be paid on the date specified. It consists of __________ days.A. 15B. 16C. 30D. 60 66. Salesmanship is ____________.A. an art of public speakingB. a skill in opening an insurance agency businessC. the art of convincing people to purchase somethingD. an art of acting 67. What characteristics does a market-oriented agent have?I. Satisfying customer requirements II. Satisfying customer needs III. profit making IV. policy distributionA. I onlyB. I & II onlyC. I, II & III onlyD. All of the above 68. Marketing emphasizes...A. planning and controllingB. product developmentC. improved services to customersD. All of the above 69. Basic marketing decision for an agent includes the following EXCEPTA. personnel sellingB. measuring of resultsC. the submission of accountsD. proposing proper plan for client 70. A professional agent must be trained to...A. close a businessB. handle objectionsC. conduct sale interviewsD. All of the above 71. The requirements an agent must be prepared to meet in order to be successful are:I. knowledge II. proper selling attitude III. professional attitude IV. skills A. I, II & III onlyB. I, II & IV onlyC. All of the aboveD. I & II only 72. Insurable interest in Life Insurance needs to exist only...A. at the time of claimB. at the time of surrenderC. at the time of inception of the insuranceD. at the time of changing the beneficiaries 73. A life insurance contract is a contract of...A. premature deathB. financial guaranteesC. permanent disabilityD. uberrima fides (Utmost Good Faith) 74. An insurance contract must have 'insurable interest' as required by the...A. Insurance Act, 1962B. Insurance Act, 1963C. Life Insurance Act, 1963D. Insurance Act for life 1963 75. If no insurable interest exists at the time a life policy is effected, the policy becomes...A. void, the company is not obliged to pay a claim under the policyB. voidable, the company may or may not be obliged to pay a claim under the policy depending on the discretion of the managementC. voidable, depending on the judgement of the high courtD. Unenforceable, the company is not obliged to pay a claim 76. The purchaser of life insurance must stand to suffer a legal financial loss on the death of the other person on whom he buys the insurance. This is known as:A. Utmost Good FaithB. Common LawC. Insurable interestD. Insurance Act 1963 77. The risks covered by life insurance included the following EXCEPT...A. retirement benefitB. premature deathC. financial lossD. permanent disability 78. __________ contract pays out a lump sum on the diagnosis of any of a number of specified diseases.A. Permanent HealthB. Dread Disease CoverC. Personal AccidentD. Term 79. Three kinds of Life Insurance contract:I. Home service II. Group insurance III. Ordinary IV. Health policyA. I, II & III onlyB. II, III & IV onlyC. I & III onlyD. All of the above 80. What is term insurance?I. The earliest life insurance II. The sum assured is payable only in the event of death of the life assured III. The sum assured is payable only if the life assured survives the term IV. Can convert it to whole life and endowment A. I & II onlyB. II & III onlyC. II, III & IV onlyD. I, II & IV only 81. It is used for the dual purpose of providing for old age or augmenting pension and for protection of the family's interest.A. Limited Whole Life InsuranceB. Decreasing Term InsuranceC. Endowment AssuranceD. Increasing Investment 82. In this policy, the office makes a series of payment to the annuitant, this policy is called...A. term insuranceB. annuityC. whole lifeD. endowment 83. The insurer will pay the policyholder with installment cash during the term of the policy, if the policyholder survives till the end of the term, he will be paid only the balance of the installment payment, usually 50%. The benefit of this policy is the full sum assured is payable in the event of the life insured's death. This policy called...A. whole lifeB. anticipated endowmentC. term insuranceD. annuity 84. __________ provides guaranteed payment over fixed period and therafter till death. If the annuitant dies during the fixed period, the annuity payment will continue to be paid till the end of the guaranteed period.A. Deferred annuityB. Single life immediate annuityC. Guaranteed immediate annuityD. Annuity certain 85. In a group insurance, a minimum number of lives to be insured are...A. 100B. 10C. 5D. 50 86. Family Takaful Plans may elect to incorporate the following supplementary benefits:I. Takaful Mortgage II. Health and Medical Takaful Plan III. Personal Accident IV. Takaful plan for education A. I, II & III onlyB. III onlyC. I onlyD. IV only 87. Under the "Group Insurance Scheme", the parties to contract are the...A. employers and the employeesB. employees, employer and the insurance companyC. employer and the insurance companyD. beneficiary, employees, employer and the insurance company 88. A term policy is also sometimes known as 'temporary assurance'. Which of the following statements is true?A. Provides protection for an unlimited period of timeB. Premiums are comparatively higherC. A small cash value is payable at the expiry of the termD. Sum assured is not payable if life assured survives the term 89. Term Insurance is useful when...A. buyer has a need for insurance but cannot afford the premiums of permanent plansB. buyer has a need for insurance but does not feel it is importantC. buyer has a huge tax bill to payD. agent has run out of products to sell 90. Participating (PAR) policies can only be bought with the following types of life policies:I. Whole Life II. Endowment III. Term IV. Annuity A. I , II, III onlyB. I , II, IV onlyC. II, III & IV onlyD. All of the above 91. "Premium are paid for a limited number of years after which the policy becomes paid-up for its full amount and no further premiums are required." The paragraph above describes...A. this member leaves the groupB. endowment policiesC. renewable term policiesD. investment linked policies 92. An endowment life insurance policy differs from a term life insurance policy in that the endowment policy provides...A. for only death cover during the term of insuranceB. no cash value at any time during the period of coverageC. for payment of the face amount, if the insured is still living at the end of the period of coverageD. for an automatic conversion of the policy, if the insured is still living at the end of the period of coverage 93. Policies generally issued for the purpose of mortgage protection are usually in the nature of...A. Whole Life InsuranceB. Increasing Term InsuranceC. Decreasing Term InsuranceD. Convertible Term Insurance 94. A life insurance contract written on two or more lives is called...A. Co-Life PolicyB. Twin-Life PolicyC. Joint-Life PolicyD. Group Insurance Policy 95. "Accidental Death Benefit" is a form of...A. basic benefitB. permanent benefitC. temporary benefitD. supplementary benefit 96. Under the Family Takaful Plans, the amount credited into the participant's account and the participant's special account is made with the intention of, EXCEPT...A. paying annual cost of Takaful against the covered riskB. saving and investmentC. payment of benefits to the poor who are not participants of the planD. payment of Takaful benefits to the heir of any participant who may die before reaching the term of the plan 97. The provision which allows the policy owner to change in the plan of insurance from term life insurance to whole life insurance is commonly referred as the...A. reinstatement provisionB. renewal provisionC. conversion provisionD. policy provision 98. As a result of an accident, Mr.Koh was totally disabled for 26 months. During that time, a special provision in his whole life insurance policy exempts him from making premium payments, while the full insurance coverage continues in force. The provision in Mr.Koh's policy which exempts him from paying premium is called the...A. disability income benefitB. accidental means benefitC. waiver of premium for disability benefitD. dread-disease benefit 99. What are supplementary benefits?A. These are benefits or riders attached to the basic policies subject to the payment of extra premiumsB. These are benefits such as bonuses given out on participating policiesC. These are benefits given to better-than average livesD. These are benefits that comes with the basic plan 100. This policy permits the insured to exchange the acquire cash value for a paid-up term insurance. The term insurance depends on the available amount of cash value applied. This policy is...A. paid up policyB. extended term assuranceC. endowment insuranceD. annuity 101. If the insured commits suicide within a stated period of time,A. the insurance company is not liable to pay any claim and premium paidB. the insurance company is not liable to pay any premium paidC. the insurance company is liable to refund all premium paidD. the insurance company is not liable on anything 102. If there has been a misrepresentation of age, the following measures could be adopted:A. if the age has been overstated, the company will not liable on anythingB. if the age has been overstated, the amount of money payable would be treated as the premium paid according to the true ageC. the contract will become voidD. the insured needs to reinstate the policy again 103. Policy alterations includes:I. decrease the sum assured II. increase the sum assured III. change of name of beneficiary IV. change of class of policyA. I & II onlyB. II, III & IV onlyC. I, II & III onlyD. I, III & IV only 104. The following documents is NOT accepted as proof of age in Malaysia.A. School leaving certificateB. identity cardC. certificate of baptismD. credit card 105. An assignment of a life policy is a transfer of...A. equitable interest onlyB. ownership and legal rightsC. risk from life assured to assigneeD. beneficial interest only 106. The cash value of a life insurance policy is the amount of money the insurance company...A. guarantees to pay the beneficiaryB. may be prepared to grant as a loan on security of the policyC. guarantees to pay the policy owner if the policy is surrendered before its maturityD. must hold in assets in order to be able to pay a policy claim whenever it is due 107. 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. renewal provisionB. automatic premium loanC. reinstatement provisionD. automatic paid-up provision 108. Some of the alterations that can be made to a life policy are listed below. Which of these are true?I. Reduction in the sum assured II. Change in the mode of premium payment III. Increase in the sum assured IV. Change of name of the life assured A. I, II & III onlyB. I, II & IV onlyC. II & III onlyD. All of the above 109. The incontestability clause in a life insurance policy is intended to...A. limit the time during which the policy owner has the right to cancel the policyB. limit the time during which the insurance company can deny claims on the basis of statements made in the applicationC. prevent delay on the part of the insurance company in the payment of legitimate claimsD. provide for time limit for the proposer to challenge the underwriter's decision under his proposal 110. A lapsed policy is one for which the...A. policy owner made the premium payment during the grace periodB. policy owner has failed to make the premium payment within the grace periodC. premium has not been paid during the last 30 days of the policy periodD. policy owner has failed to pay premium after the 30 days period 111. Most life insurance contracts include a provision which states that if the person whose life is insured dies by suicide within a specified period, the...A. company will ignore the cause of death and settle the claimB. company has no liability whatsoeverC. liability of the company is limited to the amount of the premium paidD. liability of the company is limited to the cash value of the policy at the time of death 112. A policy owner wants to discontinue paying the premiums on a life insurance policy, but wishes to retain life insurance coverage for the same period and on the same plan as provided by the original policy. The non-forfeiture option which the policy owner should select is the...A. Extended Term Insurance OptionB. Reduced Paid-Up Insurance OptionC. Fixed-Period OptionD. Automatic Premium Loan 113. Which one of the following statements about "days of grace" is NOT true?A. Interest will be charged for payment of premium within the periodB. Interest will not be charged for payment of premium within this periodC. The policy will still remain in force if payment is made within this periodD. The policy ceases to have any further coverage if renewal premium is not paid within the days of grace 114. On revival of a policy, a new contract is said to have come into existence in place of the original one that had lapsed. Which one of the following statement is FALSE?A. The incontestability clause may start afresh under the new contractB. The insurer may impose an extra premium or any other restrictive condition at the time of revival, if felt necessaryC. A new policy document will be prepared in all casesD. Suicide clause will begin anew 115. The ABC Insurance Company's policyholder service department has received a request for the reinstatement of a whole life insurance policy. In order to comply with the request, the policyholder service department probably will check to see that the policyholder has...I. submitted satisfactory evidence of insurability II. paid all unpaid premiums in arrears plus interest III. submitted the request for reinstatement within the specified time after the lapse of the policy IV. repaid any outstanding loan against the lapsed policy or agreed to have the loan restored as a lien against the reinstated policy A. I, II & IV onlyB. II, III & IV onlyC. All of the aboveD. I, II & III only 116. What is the risk factor of mortality?I. Sex II. Social status III. Avocation IV. Marital Status A. I & II onlyB. II, III & IV onlyC. I, II & III onlyD. All of the above 117. The insurer usually employs any one of the following methods to deal with sub-standard lives:I. charge the higher premium II. debt or lien III. postpone the premium IV. postpone the coverageA. I, II & III onlyB. I, II & IV onlyC. II & IV onlyD. I & IV only 118. Extra risks are classified generally as falling into 3 main groups EXCEPT...A. increasing extra mortalityB. level extra mortalityC. constant extra mortalityD. decreasing extra mortality 119. The following are major factors affecting mortality EXCEPT...A. personal habitsB. ethnicityC. sexD. wealth 120. Financial underwriting is done by insurance company to uncover...A. physical hazardB. fire hazardC. wealth hazardD. moral hazard 121. In the transaction of life business, the insurers are on risk...A. as soon as a letter of acceptance is issued and received by the proposed insuredB. as soon as the completed proposal form is submittedC. as soon as a letter of acceptance is issued and the first premium is paidD. as soon as a letter of acceptance is issued and the first premium is paid and accepted by the insurer 122. An impairment which causes increasing extra mortality is one which, with increasing duration, becomes more and more a potent factor in affecting longevity. Which of the following is classified as increasing extra mortality in the underwriting of risks?A. A construction workerB. A person who is overweightC. A person who is engaged in the liquor tradeD. A young person who has suffered from tuberculosis but has been pronounced as cured 123. The tendency of persons with greater likelihood of loss to apply for life insurance is called...A. impairmentB. persistencyC. anti-selectionD. physical hazard 124. Normally, the ordinary life insurance policyholder is given 15 days to review the terms and conditions of the policy. He can return the policy with objections in writing and the insurer will refund the premium paid in full. This period is called...A. testing periodB. observing periodC. cooling-off periodD. days of grace period 125. Who bears a great responsibility in the transaction of non-medical business?A. AgentB. Life insuredC. ProposerD. Insurer 126. A life office does not accept automatically all applications for insurance, they will examine all the elements of risk carefully. This process is called...A. inspectionB. prospectingC. selectionD. anti-selection 127. Participating policies enjoy the right to share in profits of operations of life insurance company in the form of bonuses. The insured has to pay a slightly higher premium than their non participating. This additional premium is known as...A. Premium loadingB. Bonus loadingC. TaxD. Financing cost 128. Installment and true premium is...A. Annual premiumB. Periodical premiumC. Net premiumD. Gross premium 129. If a policyholder is engaged in a hazardous occupation (site worker) at the inception of the policy, and after 2 years, he changes his occupation to a office job, the insurer normally will consider ...A. Reducing the basic premium rateB. Reducing the occupational loading amountC. Allowing the removal of occupational loadingD. Maintaining the premium rate with original loading 130. If the health of the insured deteriorates after the policy is effected, the insurer...A. can ask for extra premiumB. can terminate the policyC. can allow removal of extra premiumD. cannot ask for extra premium 131. The extra premium for occupational risk will only be imposed or removed when...A. the proof of age has been submitted B. the change of occupation has been notified C. the policy has been in force for more than three years D. the person's health is goodB. the change of occupation has been notified C. the policy has been in force for more than three years D. the person's health is goodC. the policy has been in force for more than three years D. the person's health is goodD. the person's health is good 132. What is the sources of surplus?I. Expense II. Mortality III. Morbidity IV. InterestA. I, II, IVB. I, II, IIIC. II, III, IVD. All of the above 133. The bonus that is only paid on policies resulting into claims either by maturity or death...A. cash bonusB. terminal bonusC. interim bonusD. guaranteed bonus 134. There are various ways in which the policyholder's share of surplus is distributed. Which among the following is NOT TRUE?A. Simple reversionary bonusB. Cash bonusC. Interim bonusD. Policy loan bonus 135. Assets maybe valued in several ways depending on the purpose of the valuation EXCEPT one:A. cost priceB. market valueC. interestD. book value 136. Which among the following is NOT a form of bonus?A. Interim bonusB. Maturity bonusC. Policy loan bonusD. Compound reversionary bonus 137. This section introduces the parties to the contract...A. the headingB. the provisoC. the preambleD. the attestation 138. The insurance company agrees to make payment of the sum stated in the schedule upon the happening of the insured event. This section is...A. the headingB. the condition and privilegesC. the operative clauseD. the preamble 139. Most proposal forms usually seek the following information:I. personal particulars like age, sex and occupation II. particulars of other insurance III. particulars of the proposed insured's hobbies and interestIV. particulars of the beneficiariesA. I, II & IV onlyB. II & III onlyC. III & IV onlyD. All of the above 140. The attestation clause in a policy document...I. confirms the insurer's intention to enter into a contract II. must be signed by an authorised officer of the insurer A. I onlyB. II onlyC. All of the aboveD. None of the above 141. The purpose of a proposal form is to...I. service as an evidence in the event of any dispute II. provide the information for the calculation of the premiums III. form the basis of the contract between the company and the applicantA. I & III onlyB. II & III onlyC. All of the aboveD. II only 142. The following are sources of information when the underwriter examines the degree of risk before a life is insured EXCEPT one:A. the proposal formB. medical reportC. letter from employerD. agent's confidential report 143. Which of the following about a proposal form is CORRECT?A. A proposal form consists basically of a series of questions drawn up by the insurer, requesting certain information which will enable them to assess the proposed riskB. The answers to the questions in a proposal form will discharge the duty upon a prospective insured to disclose all material informationC. The proposal form is prima facie evidence of the insurance contractD. The proposal form must be endorsed by the employer of the insured 144. For a policy effected under section 23 of the Civil Law Act, the money would be paid to the..A. spouseB. trusteeC. beneficiaryD. child 145. The following document are acceptable to the insurer as proof of title and ownership:I. life policy II. a deed of assignment III. a probate of will obtained from a court of law IV. a letter of administration issued by a court of lawA. I, II & III onlyB. II, III & IV onlyC. III & IV onlyD. All of the above 146. Claim proceeds that do not exceed __________ can claim without letters of probate administration.A. RM 10,000B. RM 100,000C. RM 1,000D. RM 25,000 147. The requirements in settlement of the maturity claims are...I. proof of age II. proof of survival III. discharge voucher completed by the policyholder IV. the policy document A. I, II & III onlyB. I, III & IV onlyC. II, III & IV onlyD. All of the above 148. A life insurance policy is said to be under a claim when...A. the insured lapses the policyB. the insured leaves the countryC. the insured becomes a bankruptD. the life insured dies, while the policy is in force 149. The fundamental proofs required for death claims are…I. proof of death I. proof of age III. proof of estate IV. proof of title and ownershipA. I, II & IV onlyB. I, III & IV onlyC. II, III & IV onlyD. All of the above 150. In life insurance, there are essentially 3 kinds of claims that can arise. There are...I. claims against supplementary contract II. performance claims III. death claims IV. maturity claimsA. I, II & III onlyB. I, II & IV onlyC. I, III & IV onlyD. II, III & IV only 151. In maturity claims, the settlement options is / are to...I. accept the maturity proceeds in cash II. convert the maturity cash value into a paid-up whole life policy III. surrender the policy proceeds to the life company A. I onlyB. II onlyC. I & II onlyD. all of the above 152. When an agent is made aware of an insured's death, the first task is to...A. notify the insurance companyB. contact the beneficiaryC. make a police reportD. notify the court 153. A policyholder should submit the proof of age as early as possible because...A. the life company will not recognize any proof of age during death claimB. it is often easier for the policyholder to produce the necessary proof when he or she is still alive.C. any misrepresentation of age will cancel the policyD. any misrepresentation of age will result into claims not being met 154. What is the age next birthday, if the life assured was born on March 21, 1965 and the date of the proposal submitted was January 1, 1998?A. 31 years oldB. 32 years oldC. 33 years oldD. 30 years old 155. Calculate the outstanding premium charges for the following situation: Sum assured : RM 100,000 Policy Type : Whole Life Half yearly premium : RM 600 Premium payment dates : 1 April & 1 October Last premium paid : 1 October 1993 Application for reinstatement : 1 July 1995 Interest charge : 6% per annum A. RM 1,880.93B. RM 1,890.00C. RM 1,882.36D. RM 1,908.90 156. Why is a code of ethics for agents particularly important?A. To increase commission rateB. Ethics is an art of sellingC. Agents earn commissionD. Clients rely upon the agent's advice on the right plan to take 157. Peter was previously the agent of company A. Now he is the agent of company B. Recently he successfully convinced one of his clients to discontinue his policy which was effected with company A and to take out a fresh policy with company B. This action is termed as...A. twistingB. rebatingC. underwritingD. misrepresentation 158. In the sale of life policies, the agent should...I. adequately study the prospect's needs and finances before presenting an insurance plan II. ensure that the life insurance policy reaches the client safely III. give advice only on matters which he is competent to deal with IV. when making comparisons with other types of policies, highlight the different characteristics of each policy A. I, II & III onlyB. II, III & IV onlyC. I, III & IV onlyD. All of the above 159. Which one of the following about twisting is NOT TRUE?A. Twisting is strongly prohibited in the insurance industryB. Twisting is against the code of ethicsC. Twisting is permitted if agreed by the policyholderD. Twisting is allowed between agents 160. Before a contract of insurance is sold to a consumer, the life insurance agent should undertake the following EXCEPT one:A. explain all the essential provisions of the contract, or contracts, which he is recommending so as to ensure that as far as possible the prospective policyholder understands what he is committing himself toB. draw attention to the long-term nature of the policy and to the consequent effects of early discontinuance and surrender of the policyC. attempt to persuade a prospective policyholder to cancel any existing policiesD. explain the owner-benefits of the plan and its riders Time is Up!
