Exam Prulife

Both endowment and term life policies provide that

Indicate which of the following is not a function of an application for life insurance policy.

A father has his present life insurance payable to his estate and because he has now retired he wants to pass the policy on to his son who will assume the premium payments. Which of the following will he have to appoint his son to achieve his desire and protect the son from Estate Tax Liability?

A policy where an irrevocable beneficiary has been designated the insured, without the beneficiary’s permission, can

What are the basic settlement options?

An insurance company generally has the right to rescind a life insurance policy

Which of the following is the least important reason for requiring that insurance agents be licensed?

In the event that a policy owner elects the paid-up insurance option

The company will allow a policy change from a higher premium to a lower premium provided the insured

A policy which permits the policyholder to vary the level of premiums, the sum insured and has its cash values dependent upon the investment performance and the level of premium paid is known as ___________ policy

Which of the following statements about “Disability Waiver of Premium Rider” is false?

In most life insurance applications, the largest amount of information requested is data which

Paid-up additions

The total life coverage of a permanent basic policy can be greatly increased through the use of

Life insurance companies make use of the laws of profitability in order to

In the case of renewable term insurance, the policy owner may

A man applied for a Ps. 20,000 whole life policy and paid the full initial premium to the soliciting agent. The agent issued a binding receipt. Under such receipt, the insurance company

Endowment life insurance and term life insurance are similar in that both plans

An agent who determines a prospect’s complete financial requirements preparatory to offering him a policy using the correct selling approach known as

Name the provision in a permanent life insurance policy under which premiums are discontinued, full insurance will be maintained for a specified period:

Notwithstanding various possible legal impediments, if the owner of an endowment at age 65 policy tells you that the maturity of the policy he wants to provide his church with a monthly donation for as long as the church exists. Which option do you recommend?

The extent of medical evidence required is determined by

The conservation of a life insurance policy is dependent on all the following except

All of the following are sources of information to an insurance company pertaining to the insurability of an applicant except

If the applicant for life insurance fails to disclose or misrepresents material fact, the contract is

The settlement options provision may provide all of the following except:

Non-forfeiture provisions are included in whole life and endowment policies to assure the policy owner that certain minimum policy benefits shall remain with him even under certain changed conditions. Non-forfeiture values guarantee to the policy owner that

Purchasing a continuous-premium, whole life policy rather than limited payment, whole life policy gives the policy owner the advantage of

In certain situations a company may file inter pleader actions with a Court of Law. This remedy is used to

Which of the following statement is false?

Which of the following does not have a legitimate insurable interest?

The basic coverage provided by the life insurance policies may be supplemented by a separate provision that provides coverage for accidental amounts or of a different nature. Collectively these provisions are known as

Which of the following statements regarding insurance premiums is false?

A non-forfeiture option would ordinarily be selected at the time a policy owner

If the interest on a policy loan is not paid at the policy anniversary the insurance company may

The incontestability clause

The insured named a primary and secondary revocable beneficiary for Ps. 20,000 policy. Which of the following are correct?

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 insurer will pay

If the interest on a policy loan is not paid at the policy anniversary the insurance company may

A yearly renewable term life insurance policy generally specifies that

In a case where the premium has not been paid and the cash values has been exhausted, the policy can still avail of the grace period.

According to the law of large numbers, events which happen seemingly by chance will actually be bound to follow a predictable pattern, if enough such happenings are observed.

Anti-selection occurs when persons in poor health wish to buy insurance.

A policy is still in force for the full face amount and will remain in force for a further period of four years and 118 days, without the payment of any premiums has availed of paid up insurance option.

In the case of misstatement of age, the amount of insurance is adjusted to the amount which the premium paid at the correct age would have purchased.

A policy that provides guaranteed cash value plus extra annual distributions and pays the insured after a specified time is known as a participating endowment.

In a group insurance it is assumed that every member of the group is insurable, provided that every member of the group is working a minimum number of (usually 50 hours) each week.

An endowment at age 65 policy with premium payable for a limited period of 20 years pays the full amount after 20 years.

In most life insurance applications, the largest amount of information requested is data which identifies the applicant.

A policy is not rendered void by reason of misstatement of the assured’s death

Variable life insurance policy owners may make withdrawals in terms of ____________ .

Which of the following statements about flexibility features of variable life policies is false?

The investment returns under variable life insurance policy __________ I. Are not guaranteed II. Are assured III. Are linked to the performance to of the investment fund managed by the life insurance company IV. Fluctuate according to the rise and fall of market prices

Which of the following statement is TRUE? I. The policy value of variable life policies is determined by the offer price at the time of valuation II. The policy value of endowment policies is the cash value plus any accumulated dividends less any outstanding loans due at the time of the surrender III. The life company needs to maintain a separate account for variable life policies distinct from the general account

Which of the following statements is FALSE?

Which of the following statements about variable life policies is TRUE? I. Offer price is used to determine the number of units to be credited to the account II. The margin between the bid and offer price is used to cover the managements cost of the policy III. The policy value is calculated based on the bid price of units allocated into the policy

What is the most suitable investment instrument for an investor who is interested in protecting his principal and receiving a steady stream of income?

What are the disadvantages of investing in common shares? I. Dividends are paid more than fixed rates II. Investors are exposed to market and specific risks III. Shares can become worthless if company becomes insolvent

Which of the following statements about the difference between variable life policies and endowment policies are FALSE? I. The policy values of variable life policies directly reflect the performance of the fund of the life company II. The premiums and benefits of the endowment policies are described at the inception of the policy whereas variable life are flexible as the account are driven III. The benefits and risks of variable life and endowment policies directly accrue to the policyholders

. Which of the following statements about twisting is FALSE?

Mr. Juan dela Cruz is currently earning Php 30,000.00 per month. He is 35 years old and he has a reasonable amount of savings. He has a moderate level of risk tolerance. What kind of policy would you recommend for him to buy?

What are the benefits available when investing in variable life funds? I. The variable life funds offer policyholders an access to pooled or diversified portfolios II. The variable life policyholders can vary his premium payments, take premium holidays, add single premium top-ups and change the level of the sum assured easily III. The variable life policyholder can have access to a pool of qualified and trained professional fund managers

Rank the following in terms of their liquidity, from the least liquid to the most liquid: I. Short term securities II. Property III. Cash IV. Equities

A unit trust is ____________________

Under variable life insurance policies ________________________ I. There is no guaranteed minimum sum assured for the purpose of declaring dividends II. There is no guaranteed minimum sum assured as a level of life insurance protection III. Each of the policy owner’s premium will be used to purchase units the number of which is dependent on the selling price of each unit IV. Purchase of units can only be made from the variable life fund itself, which will then create new units and add investment monies to the value of the fund

The benefits of investing in variable life funds include ___________________ I. Policy owners have access to pooled or diversified portfolios of investment II. Policy owners can easily change the level of premium payments as the product design of variable life policies have clear structures which cater separately for investment and insurance protection III. Policy owners can gain access to variable life funds managed by professional investment managers with proven track records IV. Policy owners can buy a variable life insurance policy only with a high initial investment

Which of the following BEST describes the policy benefits of variable life policies?

Why it is important that the customer must understand the sales proposal in full?

Which of the following statements about rebating are TRUE? I. Rebating is prohibited under Insurance Code II. Rebating deals with offering the prospect a special inducement to purchase policy III. Rebating will enhance the sales performance and uphold the prestige of an agent

Which of the following statement is FALSE?

Which of the following statements about option top-up under variable life insurance is FALSE?

The characteristics of a variable life insurance include _______________________ I. Its withdrawal value and protection benefits are determined by the investment performance of the underlying assets II. Its protection costs are generally met by implicit charges III. Its commission and company expenses are met by a variety of explicit charges with normally 6 months notice given by the life companies prior to any change IV. Its withdrawal value is normally the value of units allocated to the policy owner calculated at the bid price

Which of the following statements about single premium variable life policies are TRUE? I. There is no fixed term in a single premium variable life policy and therefore, they are technically whole life insurance II. Top-ups or single premium injections are allowed in these plans III. Policyholders have the flexibility of varying the level cover

Investing in bonds offer the following EXCEPT

Which of the following statements about variable life policies are TRUE? I. The withdrawal value is not guaranteed II. The volatility of the returns depends on the investment strategy of the fund III. The variable life policyholder has direct control over the investment decisions of the variable life fund

Single premium variable life insurance policy :

Which of the following statements about characteristics of variable life policies are TRUE? I. Variable policies generally have a longer exposure to equity investment than with participating and other traditional policies II. The protection costs are generally met by implicit charges, which vary with age and level of cover III. The commissions and company expenses are met by a variety of explicit charges, some of which are variable

Which of the following statements about benefits in variable life fund is FALSE?

The flexibility benefit of investing in variable life funds include ______________ I. Policy owners can easily change the level of sum assured and switch their investment between funds II. Policy owners can easily take premium holidays and add single premium to top-ups III. Variable life insurance policies offer the potential for higher returns IV. Traditional participating policies aim to produce a steady return by smoothing out market fluctuation

The fundamental differences between traditional participating life insurance policies and variable life insurance policies include __________________ I. Variable life insurance policies are less likely to offer more choices in terms of the type of investment funds II. The investment elements of variable life insurance policies is made known to the policy owner at the outset and is invested in a separately identifiable fund which is made up of units of the investment III. Variable life insurance policies offer the potential for higher returns IV. Traditional participating policies aim to produce a steady return by smoothing out market fluctuation

The switching facility under variable life insurance policies is a very useful _________

The following statement about surrender value under traditional participating life insurance products are TRUE?

Which one of the following statements about risks of investing in variable life funds is TRUE?

The protection cost under a variable life insurance policy ______________ I. Are must by flat initial charges for regular premium plans II. Are generally covered by cancellation of units in the fund III. Are generally met by explicit charges stipulated openly in the policy terms IV. Vary with age of policy owner and level of cover

Which of the following statements about diversification in portfolio management is FALSE?

What are the advantages of investing in preferred shares? I. It gives shareholder the right to a fixed dividend II. Has the priority over company assets during a dissolution III. They enjoy benefit of capital appreciation

With traditional participating life insurance products, the allocations to policy owners in the form of dividends _______________________ : I. Are not directly linked to the company’s investment performance II. Have already been smoothened by the life company III. Do not have the highs and lows of investment return as in good investments years of life company IV. Are not fixed at the inception of the policy, but are greatly dependent on the investment performance of the company

The objective of satisfying customers need profitably can be achieved by and agent through I. The giving of freebies to the customers II. Extensive investment training by the company III. The use of sales plan, where sales goals, strategies, and objectives are coordinated with the market analysis, segmentation and training IV. The giving of monetary assistance and discount to the customers

Which of the following is true about CASH?

Under a regular premium variable whole life plan ____________________ I. Premium top-ups and holidays, subject to the company’s administrative rules are usually allowed II. Life protection is the main objective of the plan with investment as the nominal purpose III. Withdrawal after the payment of a few years premium are usually allowed IV. A single premium contribution is made to the policy which uses the premium to purchase units in a variable life fund to provide a certain level of life cover

Which of the following statements about investment objectives is false?

Which of the following is/are the main characteristic(s) of variable life policies? I. The policies can be used for investment, as a source of regular savings and protection II. The withdrawal values and protection benefits are determined by the investment III. The net cash values of the policies are the gross cash values shown in the policy that includes dividends up to the date of surrender less and indebtedness including interest

Risk can be classified into two particular categories in relation to investment. They include ___________ : I. The risk of not losing some or all of the person’s initial investment II. The risk of rate of return on the investment not matching up to the individual’s expectation III. The risk of rate of return on the investment matching up to the individual’s expectation IV. The risk of losing some or all of a person’s initial investment

The duties of the trustee of unit trust do not include:

Policy fee payable by variable life insurance policy owner is to cover _________________

The selling price under a variable life insurance policy is:

Diversification in investment involves ______________________:

Variable life funds can be invested in any financial instruments including cash funds, bond funds, equity funds, property funds, specialized funds, and diversified funds. Equity funds _________ :

Which of the following statements describe the differences between variable life products and participating products? I. Variable life products allow policyholders to vary the premium payments unlike participating products II. Variable life products can take the form of whole life or endowment policies with participating products III. Variable life products allow policyholders to pay future single premiums from time to time to add more units to his account unlike participating products