Traditional-mock-exam-1.docx

TRADITIONAL EXAM

1. Both endowment and term life policies provide that A. Insurance protection will be unlimited to a specified period B. Insurance protection will be limited to a specified period c. Insurance protection will be limited to an unspecified period D. insurance protection will be unlimited to an unspecified period 2. Indicate which of the following is not a function of an application for life insurance policy. A. To give details pertaining to forfeiture options B. To not give details pertaining to forfeiture options C. To give details pertaining to non-forfeiture options D. To not give details pertaining to non-forfeiture options. 3. A father has his present life insurance payable to his estate and because he has now retired he wants to pass the policy on his son will assume the premium payments. Which of the following will have to appoint his son to achieve his desire and protect the son from Estate Tax Liability? A. Absolute assignment B. Absolute assignee 4. A policy where an irrevocable beneficiary has been designated the insured, without the beneficiary’s permission can A. Discontinue premium payments B. Continue premium payments 5. What are the basic settlement options? A. Fixed amount, fixed period, life income B. Fixed amount, fixed period C. Fixed amount D. Fixed amount, fixed period, life income, interest on deposit

6. An insurance company generally has the right to rescind a life insurance policy if A. Company discovers at any time that the policy owner was not a minor at the time of application B. Company discovers at any time that the policy owner was actually a minor at the time of Application 7. Which of the following is the least important reason for requiring that insurance agents be licensed? A. To provide additional income to the government through license fees B. To provide additional income to the government through policy fees C. To provide additional income to the company through license fees D. To provide additional income to the company through policy fees 8. In the event that a policy owner elects the paid-up insurance option A. The premiums cease but the protection does not continue B. The premiums does not cease and the protection does not continue C. The premiums cease and protection continues with a reduced amount of coverage D. The premiums does not cease and the protection continues with a reduced amount of coverage 9. The company will allow a policy change from a higher premium to a lower premium provided the insured A. Was not able to present satisfactory evidence of insurability B. Presents satisfactory evidence of insurability C. Presents satisfactory evidence of non-insurability D. Was not able to present satisfactory evidence of non-insurability 10. 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 A. Global Life B. Universal life C. Company Life D. Corporate Life

11. Which of the following statements about “Disability Waiver of Premium Rider” is false? A. The insured must not die while disabled B. The insured has to die while disabled 12. In most life insurance applications, the largest amount of information requested is data which A. Relates to the insurability of the patient B. Relates to the non-insurability of the applicant C. Relates to the insurability of the applicant 13. Paid-up additions A. Affects the loan or cash value of the policy B. Affects the loan only C. Affects the cash only D. Don’t affect the loan or cash value of the policy 14. The total life coverage of a permanent basic policy can be greatly increased through the use of A. A supplemental term rider B. A primary term rider C. A secondary term rider D. A tertiary term rider 15. Life insurance companies make use of the laws of probability in order to A. Estimate past death rates among members of a given group B. Estimate present death rates among members of a given group C. Estimate future death rates among members of a given group D. Estimate future illness rates among members of a given group 16. In the case of renewable term insurance, the policy owner may A. Renew the coverage based on a lower premium B. Renew the coverage based on a present premium C. Renew the coverage based on a past premium D. Renew the coverage based on a higher premium

17. 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 a receipt, the insurance company A. Immediately provides interim insurance that remains in effect until the policy B. Immediately provides interim insurance that does not remain in effect until the policy C. Does not immediately provide interim insurance 18. Endowment life insurance and term life insurance are similar in that both plans. A. Provide life insurance protection for an unlimited period of time B. Provide life insurance protection for only the period of time specified in the policy contract C. Does not provide life insurance protection D. None of the above 19. An agent who determines a prospect’s complete financial requirements preparatory to offering him a policy using the correct selling approach knows as A. Total commission selling B. Total needs selling C. Total money selling D. All of the above 20. Name the provision in a permanent life insurance policy under which premiums are discontinued, full insurance will be maintained for a specified period: A. Unextended term insurance B. Unextended term policy C. Extended term policy D. Extended term insurance 21. 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? A. Interest option B. Policy option C. both A and B D. none of the above

22. The extent of medical evidence required is determined by A. The age of the applicant only B. The proposed sum to be insured only C. The age of the applicant and the proposed sum to be insured D. Neither of the age of the applicant and the proposed sum to be insured 23. The conservation of a life insurance policy is dependent on all the following except A. Pressure selling B. Pressure cooking C. Excess selling D. Excess cooking 24. All of the following are sources of information to an insurance company pertaining to the insurability of an applicant except A. Government policy Record B. Government Tax Record C. Company Tax Record D. Company Policy Record 25. If the applicant for life insurance fails to disclose or misrepresents material fact, the contract is A. Void unless the insurer can prove fraud B. Valid C. Valid unless the insurer can prove fraud D. Automatic invalid 26. The settlement options provision may provide all of the following except: A. Proceeds held by the government, with interest payable to the beneficiary on request B. Proceeds held by the company, with interest payable to the beneficiary on request C. Proceeds held by the government, without interest payable to the beneficiary on request D. Proceeds held by the company, without interest payable to the beneficiary on request

27. 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 A. Any guaranteed policy values will belong to the agent even if premium payments are discounted B. Any guaranteed policy values will belong to the policy owner even if premium payments are discounted. C. Any guaranteed policy values will belong to the manager even if premium payments are discounted 28. Purchasing a continuous-premium, whole life policy rather than a limited payment, whole life policy gives the policy owner the advantage of A. Less insurance protection for the same annual premiums outlay B. More insurance protection for the same annual premiums outlay C. More insurance protection for different annual premiums outlay D. Less insurance protection for different annual premiums outlay 29. In certain situations a company may file interpleader actions with a Court of Law, This remedy is used to A. Decide conflicting claims on different insurance proceeds B. Decide conflicting claims on the same insurance proceeds C. None of the above 30. Which of the following statement is FALSE? A. Because of its very short duration the cash value of a yearly renewable term policy grows very Fast B. Because of its very long duration the cash value of a yearly renewable term policy grows very fast 31. Which of the following does not have a legitimate insurable interest? A. An individual on the life of his wife B. An individual on the life of his mother C. An individual on the life of his mistress D. An individual on the life of his son

32. 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 A. Top-ups B. Top-downs C. Face amount D. Riders 33. Which of the following statements regarding insurance premiums is false? A. Cash is not required for all premiums paid in the grace period B. Cash is required for all premiums paid in the grace period 34. A non-forfeiture option would ordinarily be selected at the time a policy owner A. Continues premium payments for a whole life or endowment policy B. Continues premium payments for a limited pay policy C. Discontinues premium payments for a limited pay policy D. Discontinues premium payments for a whole life or endowment policy 35. If the interest on a policy loan is not paid at the policy anniversary the insurance company may A. Decrease the present loan by the interest B. Increase the present loan by the interest C. Increase the future loan by the interest D. Does not increase at all 36. The incontestability clause A. Prevents the company from denying a claim after the policy has been in force for 2 years B. Does not prevent the company from denying a claim after the policy has been in force for 2 years C. Prevents the company from not denying a claim after the policy has been in force for 2 years D. Does not prevent the company at all

37. The insured named a primary and secondary revocable beneficiary for Ps. 20,000 policy. Which of the following is correct? A. The insured cannot add a third beneficiary B. The agent can add a third beneficiary at any time C. The insured can add a third beneficiary at any time D. the insured can add a third be beneficiary in the morning only 38. 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 A. The face amount adjusted for the misstatement of annual premium B. The face amount adjusted for misstatement of age C. The rider adjusted for the misstatement of age D. The plan adjusted for the misstatement of age 39. If the interest on a policy loan is not paid at the policy anniversary the insurance company may A. Decrease the present loan by interest B. Increase the future loan by interest C. there is no amswer D. Increase the present loan by the interest 40. A yearly renewable term life insurance policy generally specifies that A. Premiums shall increase every time the policy is renewed B. Premiums shall decrease every time the policy is renewed C. Premiums shall not be changed D. Riders shall increase every time the policy is renewed