Life Insurance

11. Sometimes Policy Reserves are also referred as:(select one or more)

a. Legal Reserves

b. Monetary Reserves

c. Statutory Reserves

d. None of the listed options

 

12. PST, the policyholder of self administeredgroup plan is responsible for handling:

I. Administrative aspects of the plan

II. Record keeping aspects of the paln

Select one

a.     Neither I nor II

b.     I

c.      II

d.     Both I and II

 

13.Mr DCB is covered by a comprehensive majormedical expense policy that specifies a $500 calendar-year deductible and a 10percent coinsurance requirement.

In 2010 DCB incurred $1000 in allowable expenses

How much amount will the insurer pay?

a.     $450

b.     $600

c.      $550

d.     $500

 

14.Mr XYZ is covered under group life insuranceplan that his employee provides. The group insurance policy provides $100000 ofgroup term life insurance. $50000 of group accidental death and dismemtermentinsurance and $25000 of business travel accident insurance

If Mr. XYZ dies in an accident while he istraveling on business for his employer, then how much will his beneficiary willbe entitled to receive?

a.     $150000

b.     $50000

c.      $100000

d.     $175000

 

15. An underwriter BBC, has predicted anapproximate loss rate for a group of 10 members. An Underwriter CCB haspredicted approximate loss rate for a group of 25 members.

Which of the following underwriter’s predicted lossrate would be closer to actual loss rate?

a.     CCB

b.     Both Option 1 and Option 2

c.      Can’t say

d.     BBC

 

16. Mr. ACD, aged 30 is employed and wants to savemoney for his retirement. ACD purchased a certain defined annuity. ACD paid aninitial premium of $1000 and paid subsequent monthly premiums of $100 for threemonths before experiencing a financial emergency.

Six months later, after resolving the financialemergency. ACD resumed making monthly premium payment

What can be said about the premium payment for thecontract?

a.     Lumpsum Premium

b.     Single Premium

c.      Contract has lapsed

d.     Flexible Premium

 

17. In a second insured rider, the premium ratecharged for the second insured is based on:

a. A flat amount the company charges for all secondinsured riders

b. Based on the risk characteristics of the secondinsured

c. Based on the combined risk characteristics ofthe person insured under the basic policy and the second insured

d. Based on the risk characteristics of the personinsured under the basic policy

 

 

18. The _______ deductible, is the dollar amount ofclaims that an employer must pay for any individual period of time before thestop-loss insurer reimburses the employer for any excess amount.

a. individual

b. aggregate

c. None of the listed options

d. Group

19. for which of the following insurers, the amount ofbenefits payable is more likely to be definite, specified by the policy?

a. cannot say

b. None of the listedoption

c. Life Insurer

d. Health Insurer

 

20. Which of the following is the primary benefitobligation payable under a life insurance policy, if the insured dies while thepolicy is in force?

a. disability income benefit

b. payor benefit

c. death benefit

d. supplemental benefit

 

21. Which of the following is a contract, underwhich one party has the right to avoid his obligations under the contract?

a. informal contract

b. voidable contract

c. void contract

d. offline contract

 

22. Mrs. Dior buys a life insurance policy for herdaughter Chanel. Mr. Dior, the father, is beneficiary of the policy.

For which of the following people, it is mandatoryto have an insurability interest at the time of policy being issued?

a.     Mr. Dior

b.     Chanel

c.      Mrs. Dior

d.     None of the listed options

 

23. Which of the following statements stand FALSE,with respect to modified-premium-whole life policy?

a. By taking a modified-premium-whole life policy,policy owner is able to purchase a larger face amount of whole life insurancethan he/she would be able to afford.

b. The initial annual premium for a modified premiumwhole life policy is less than the initial annual premium for a similar wholelife policy issued on a level premium basis

c. The cash value build up faster under amodified-premium-whole life policy than under a traditional whole life policy.

d. After a specified period, the annual premium fora modified-premium-policy increases to a stated amount that is somewhat higherthan the usual(non-modified) premium would have been.

 

24. What will the insurer is most likely to do, incase of mis-statement of age of a group member covered under a group lifeinsurance policy?

a. Charge the penalty

b. Adjust the amount of death benefit

c. Adjust the amount of premium

d. Remove the member from the coverage

 

25. Which of the following statement stand TRUEwith respect to monthly debit ordinary policies?

I. MDO policy tend to be sold in higher face amountthan other life insurance policies.

II. MDO policy are marketed by commissioned salesagents who are not permitted to collect revenue premiums

a.     I

b.     II

c.      Neither I nor II

d.     Both I & II

 

26. Ms. Aldo purchased a decreasing term lifeinsurance for five year starting with initial coverage of $50,000 and thendecreasing each year by $10000

In case if Ms. Aldo expires in the 4^thyear, what would be the amount paid by the insurer to policy beneficiary

a.     $30000

b.     $40000

c.      $50000

d.     $20000

 

 

 

 

27. Fendi has a family history of diabetes. She alsohad a heart attack recently. For the insurer, this can be typified as

a. Physical hazard

b. Moral hazard

 

28. Ms. XYZ purchased a variable annuity from theInsurance Company. The contract specifies that, each time Mr. XYZ withdrawsmoney from product, he will be charged a fee, expressed as percentage of thewithdrawal, the percentage will decrease over time, until eventually Mr. XYZcan withdraw funds without incurring a charge by definition, this fee is knownas a

a. Mortality and expense risk(M&E) and it isconsidered a back-end sales charge

b. Mortality and expense risk(M&E) and it isconsidered a front-end sales

charge

c. Contingent deferred sales charge(CDSC) and it isconsidered a back-end sales charge

d. Contingent deferred sales charge(CDSC) and it isconsidered a front-end sales charge

 

 

29. Which of the following statements is NOT acondition that must be met to reinstate a policy

a. The policy owner must pay a specific amount ofmoney; the amount required depends on being reinstated.

b. The policy owner need not provide the insurancecompany with evidence of the insured’s insurability again.

c. The policy owner may be required to either payany outstanding policy loan or have the policy loan including any additionalaccrued interest, reinstated with the policy.

d. The policy owner must complete a reinstatementapplication within the time frame stated in the reinstatement provision

 

30. The following are different types of decreasingterm insurance:

a. Credit Life Insurance

b. None of the listed options

c. Mortgage Insurance

d. Family Life insurance