51-100
Life Insurance Mastery Quiz
Test your knowledge of life insurance concepts with our comprehensive quiz designed for aspiring insurance professionals and those looking to deepen their understanding. Dive into questions ranging from policy types to insurable interest and everything in between!
- 50 multiple-choice questions
- Understand key insurance principles
- Get instant feedback on your answers
51. Which of the following statement is correct?
A. Orphan policy owners are good sources of prospect and new sales
B. Orphan policy owners will only deal with their original agents
C. Orphan policy owners hardly need an agent’s services
D. . New agents should stay away from orphan policy owners
52. When is the only instance a life insurance contract is treated primarily as an indemnity agreement?
A. Person in a partnership insures the life of his partner to protect the firm against loss due to the death of that partner
B. A person insures the life of a friend
C. Creditor insures the life of his debtor to protect himself
D. Person insures the life of his or her spouse to protect against the loss of income earned by the spouse
53. The widow of your policyholder tells that she does not want a lump sum payment, but she prefersto receive monthly allowance for the rest of her natural life. Which option do you recommend?
A. Fixed income option
B. Periodic annuity option
C. Life annuity option
D. Fixed period option
54. Insurance provides protection against economic loss by enabling the policy owner to ____.
A. Reduce the possibility of the occurrence of the event causing the loss
B. Take speculative risk to compensate for the loss
C. Share the loss with others exposed to similar risk
D. Transfer responsibility for the loss to others
55. A risk is considered substandard based on any or all of the following criteria
A. Income, educational attainment and occupation
B. Death, occupation and moral character
C. Death income and educational background
D. Occupation, moral character and family heath history
56. At the end of 25 years, which statement is true for a 25-year Life policy and is not for a 25-year endowment?
A. The insurance remains in-force
B. The sum insured is paid
C. No further premiums are paid
D. The contract is terminated
57. How are endowment life insurance and term life insurance the same?
A. Provide for payment of the face amount if the insured is alive at the end of specified period
B. Provide life insurance protection for only a period of time specified in the policy contract
C. Build up cash value rapidly in the early policy years
D. Contain provisions for automatic continuation of the insurance protection at the end of a specified period
58. Some insurance companies charge females a lower premium rate than males. Which of the following justifies the practice?
A. Generally, women have less hazardous jobs
B. Women have a longer life expectancy (after age 54) than men
C. Women are less likely to lapse the policies
D. Generally, women buy the higher premium rate policies, such as an endowment policy or retirement income policy
59. Which of the following sales practices determines a prospect’s complete financial requirement before offering a policy?
A. Counselor selling
B. Multiple products selling
C. Planned selling
D. Total needs selling
60. A prospect tells you that he wants the maximum possible provision for his retirement with no life coverage. Which of the following would you offer him?
A. Whole life policy
B. A 20-pay life policy
C. A life paid-up at age 65 policy
D. None of the above
61. In most cases, what will happen to a policy loan that has not been repaid at the time of the insured’s death?
A. It will be written off against the insurance company under the terms of the premium loan repayment option.
B. It will be deducted from the proceeds of the policy when the death claim is paid.
C. It will be collected from the life insurance company’s reserve
D. It will be charged to the person responsible for paying the debts of the insured.
62. Which of the following are requirements in reinstating a policy after it has lapsed for non-payment of premiums?
A. Evidence of insurability and payment of interest on overdue premiums
B. Payment of all overdue premiums
C. Application for reinstatement within the specified time
D. All of the above
63. The grace period provision in life insurance policies is designed to ____.
A. Give the insured more time to pay the premium while coverage remains in-force
B. Terminate the contract of insurance automatically
C. Permit the company to extra charges
D. Compel the insured to pay premiums more promptly
64. The life insurance business relies on the following, except:
A. The use of effective needs selling
B. The level of first year commission
C. Agent’s service oriented attitude
D. Pressure selling
65. What source of information will an insurance company not consider from a client pertaining to insurability?
A. Medical examination report
B. Agent’s inspection report
C. The applicant’s personal appearance
D. Government tax records
66. Most life insurance agents are expressly authorized to perform the following functions:
A. Accept initial premium, and waive the insurable interest requirement
B. Appraise applicants, and decide on a standard or sub-standard rating
C. Solicit and approve the application of the proposed insured
D. Solicit application for insurance, accept the initial premium, and issue a receipt on behalf of the insurance company
67. Mr. Lorenzo and his primary beneficiary died in a common accident. It was established that the primary beneficiary died before Mr. Lorenzo, and there are no contingent beneficiaries named. To whom will the proceeds of Mr. Lorenzo’s life insurance policy be paid?
A. A court of law
B. Both the estates of the insured and primary beneficiary on a 50/50 percent basis
C. The estate of the insured
D. The estate of the primary beneficiary
68. Helena owns a policy that is kept in force by paying the premiums on a semi-annual basis. If she elected the non-forfeiture option. This means she ____.
A. Discontinues premium payments for a whole life or endowment policy
B. Renews a term life policy
C. Chooses a mode of settlement for the life proceeds
D. Converts a term policy to a whole life policy
69. In order for an assignment of a life insurance policy to be binding upon the company, ____.
A. The company must be satisfied that it is justified
B. It must be made in writing and filed with the company
C. The company must certify to its validity
D. It must be of the limited type
70. Which of the following statements satisfies the requirement that the beneficiary should have an insurable interest?
A. The insured is financially indebted to the beneficiary
B. The insured and the beneficiary regularly travel to and from work in a car pool arrangement
C. The insured belongs to the same club as the beneficiary
D. The insured and the beneficiary are engaged in a similar occupation
71. Which rider could greatly increase the total life coverage of a permanent basic policy?
A. A supplemental term rider
B. An accidental death benefit rider
C. An interim term rider
D. None of the above
72. How does the law of probability help life insurance companies?
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 the insured persons
73. If Phoebe wants to continue her renewable term insurance, which of the following she may do?
A. Renew providing the insurance company agrees to continue coverage
B. Renew the coverage based on a higher preimum
C. Renew at the same premium for further period of years
D. Change the life insured at renewable date
74. When does an interpleader come into play?
A. To determine if the cause of the insured’s death was an excluded risk
B. To decide conflicting claims on the same insurance proceeds
C. To resolve the question of insurable interest
D. To recommend the best settlement options for the beneficiary if the interest on a policy loan is not paid at the policy anniversary of the insurance
75. For life insurance coverage to be valid, insurable interest must exist
A. Only at the time of the loan
B. Only at the inception of the policy
C. Both at the time of policy issue and at the time of the loan but not necessarily throughout the lifetime of the policy
D. Throughout the lifetime of the policy
76. Clark applied for a Ps. 20,000 whole life policy, and paid the full initial premium to his agent, who issued a binding receipt. Under such scenario, what does the insurance company do?
A. Immediately provides interim insurance that remains in effect until the policy is issued or the application is declined
B. Promise that the insurance coverage will become effective as of the date of the application is approved
D. Offer permanent insurance coverage effective as of the date of the application
D. Guarantee the policy will be issued as applied for
77. A whole life policy with an initial premium rate that applies to the first five (5) years of the policy and a higher premium rate that applies to the remainder of the premium-payment period is known as ____.
A. A modified life policy
B. A guaranteed renewable policy
C. An extended life policy
D. An experience-premium policy
78. In life insurance, there is always “agency” relationship between the ____.
A. Insured and the insurance company
B. Soliciting agent and insurance company
C. Policyowner and the soliciting agent
D. Beneficiary and the insurance company
79. What is the purpose of the incontestability clause?
A. Prevents the company from denying a claim after the policy has been in force for two (2) years
B. Permits that company to pay claims within two (2) years
C. Makes it necessary for the beneficiary to present proof of death in the event of a death claim
D. Gives the company the right to rescind a policy at any time
80. Mr. Barrio has been insured under the employee group life insurance plan for several years. Which of the following will happen to Mr. Barrios’ group life insurance if he leaves this job?
A. Continue to provide coverage of the same amount for a period of 31 days during which Mr. Barrio can convert to an individual policy
B. Changed, upon the employer’s notice to the insurance company, to a permanent plan of insurance for the same amount
C. Coverage will stop at once
D. Cover him for a reduced amount of paid-up term insurance until the end of the current policy year
81. Life insurance guarantees cash benefits for all the following except:
A. Mortgage
B. Educational Fund
C. Family dependency period income
D. Clean - up fond
82. Which of the following best describes Participating Life Insurance policies?
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 policy owner
D. Develop profit which must be paid to stockholders
83. The convertible feature of a term insurance policy provides that the policy may be
Changed to a permanent insurance policy without evidence of insurability
B. Changed to permanent insurance with evidence of insurabilit
C. Changed to another life
D. Cashed for a guaranteed sum
84. The following have a legitimate insurable interest except:
A. An individual on the life of his spouse
B. An individual on the life of his mistress
C. An individual on his own life
D. A finance company on the life of its borrower
85. William chose a straight-premium whole life policy over a limited payment whole life policy. What is the advantage of such purchase?
A. More insurance protection for the same annual premiums outlay
B. Concentration of premium payments during the period of highest earnings
C. Liberal risk selection procedures
D. More rapid accumulations cash values
86. What is a policy that affords coverage for two or more persons simultaneously with the face amount of the policy payable when any of the insured dies at which time the policy terminates automatically?
A. Split Pesos Insurance Plan
B. Joint Life Policy
C. Double Duty Pesos Insurance
D. Joint and Survivor Annuity
87. To waive life insurance premiums under a typical waiver of premium for disability clause, the disability of the insured person must be total, and which other condition?
A. It has continued for a specified period, such as six months
B. It has been caused by accident, not by illness of a chronic nature
C. It was expected to continue until death
D. It has been caused by illness of a chronic nature, not accident
88. What is the commuted value of an insurance policy?
A. The cash value of the policy after the loan has been deducted
B. The single sum of money which is equal in value to the discounted future payments
C. The paid-up value of the policy
D. The cash value of basic addition
89. The savings element of permanent plans allows for the build up of
A. Dividends
B. Maturity benefits
C. Cash values
D. Death benefits
90. 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. Life income option pension
C. Paid-up insurance additions
D. Reduced paid-up insurance
91. Applicants for life insurance with moderate physical impairments are called sub-standard risks and ____.
A. Are issued policies without any non-forfeiture values
B. Are required to pay premiums on an annual basis
C. Therefore cannot obtain life insurance in any company
D. May be insured at increased rates to compensate for the extra hazard
92. A Family Income rider is specifically designed to ____.
A. Provide an income for the adjustment period immediately following death
B. Provide a retirement income for the insured and his spouse
C. Pay twice the face amount of the policy in the event of death.
D. Provide a monthly income from the date of death of the insured to some future date specified in the contract
93. Disability benefits are not paid
A. If all policy dividends have been withdrawn
B. If disability resulted from sickness only
C. If there is a loan against the policy
D. For self-inflicted injuries
94. Setting aside possible legal impediments, which option would you recommend if an endowment policy owner, at age 65, tells you that he wants to provide his church with a monthly donation for as long as the church exists?
A. Interest option
B. Fixed income option
C. Periodic annuity option
D. Life annuity option
95. Nicole want to enhance her exiting policy by purchasing a separate provision coverage for a different nature. What would you recommend to her?
A. Dividends
B. Riders
C. Assignment
D. Deposit privileges
96. Which of the following is not true about insurance premiums?
A. Cash is required for all premiums paid in the grace period
B. Premiums which are paid quarterly or semi-annually are higher than those paid annually
C. A premium is the legal consideration needed to effectuate a life insurance policy
D. The grace period is usually 31 days
97. A hazardous occupation could be defined
A. An occupation in an unhealthy working condition exposing the insured to elements which can cause sickness
B. An occupation the duties of which expose the insured to a degree of danger of sustaining injury
C. An occupation which exposes the insured to social hazards
D. All of the above
98. 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
99. Which of the following determines the extent of medical evidence required?
A. Date of the last medical examination
B. The age of the applicant and the proposed sum to be insured
C. Financial condition of the applicant
D. Occupation of the applicant
100. What is the legal consideration for the promise made by the insurance company in a life insurance contract?
A. Establishment of the reserve
B. Payment of the initial premium
C. Approval by the underwriters
D. Payment of renewal premium
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