GREEN 7 – Manulearn MOCK Exam

1. A father enters into a life insurance contact on behalf of his child. In the case, the father is the

A. Insured

B. Beneficiary

C. Insurer

D. Applicant-owned

2. A fixed amount added to the premium of a given a policy regardless of the policy size is known as

A. policy fee

B. policy reserve

C. policy values

D. extra premium

3. A man with moderate means can have maximum protection possible through

A. 20- year- Endowment

B. Limited Pay Life

C. Term Insurance

D. Whole Life Insurance

4. A participating plan entitles the policyowner to receive a return of excess premium. Such is termed as:

A. endowment

B. dividends

C. cash value

D. cash surrender value

5. A single premium policy means a policy

A. requiring only a single premium each year

B. under which only one premium payment is required

C. only available to single individuals

D. on which no more than one premium can be paid in advance

6. A term insurance which allows the policyowners to convert it to permanent insurance within a specified period
without evidence of insurability contains ______________ features.

A. convertibility

B. renewability

C. dividend option

D. both a & b

7. A term policy only offers

A. cash value

B. protection

C. savings

D. dividends

8. Disability benefits are not paid

A. for self-inflicted injuries

B. if there is a loan against the policy

C. if all the policy dividends have been withdrawn

D. if disability resulted from sickness only

9. If an insured is disabled and his life insurance policy is being continued in force through the waiver of premium, the
dividend of the policy would

A. cease

B. continues at reduced rate

C. continue as if the owner is paying the premium

D. continue but they would be applied toward the premium being waived

10. In a 20 life Policy

A. protection is until age 100, payment of premium is for 20 years

B. protection is until age 100, payment of premium until age 100

C. protection is for 20 years, payment of premium is for 20 years

D. protection is for 20 years, payment of premium until age 100

11. In an application, the information that must be disclosed include

A. only his date and place of birth

 B. only his family history

C. every fact in his knowledge that is material to the insurance

D. only information he wants the agent to know

12. In insurance, risk means

A. chances of you being declined by the company

B. hazard on people’s lives

C. chances of the beneficiary being paid

D. none of the above

13. Insurance companies have a source of confidential medical information on applicants for life insurance. This is the

A. agents confidential report bureau

B. inspection report bureau

C. financial standing bureau

D. medical impairment bureau

14. Insurance companies which are owned by the policyowner are examples of

A. stock companies

B. mutual companies

C. family corporation

D. open -end companies

15. Life Insurance can provide money when income stops because of

A. disability

B. death

C. retirement

D. all of the above

16. Life Insurance contributes directly to the welfare and progress of the country by

A. accumulating capital for investment in commerce and industry

B. partially relieving the community of the care of dependents

C. encouraging provision for the future

 D. all of the above

17. Life Insurance is

A. a luxury afforded by the rich

B. only available to a specific group

C. a cooperative risk-sharing plan

D. a speculative risk

18. Life Insurance policies for which higher than standard premium rates are payable are said to be

A. rated policies

B. contingent policies

C. non-participating policies

D. conditional policies

19. Mr. Roel Reyes has been confined in a hospital 3 years prior to his application for insurance. He, therefore, needs to
give the following information

A. name of attending doctor, diagnosis, and date of confinement

B. the bill and medicines

C. name of doctor only

D. date of confinement only

20. Since the purchase of life insurance is a voluntary choice, the individual must meet

A. comprehensive inspection

B. certain standards of health and occupation

C. minimum income requirement

D. all of the above

21. The convertible feature of a term insurance policy provides that the policy may be

A. changed to a permanent insurance policy without evidence of Insurability

B. changed to another life

C. cashed for a guaranteed sum

D. changed to permanent insurance with evidence of insurability

22. The entire contract between the policyowner and the insurance company include: (Choose the incorrect statement)

A. the application and the policy

B. any verbal statement made by the agent to the application

C. any document attached to the policy when issued

D. any subsequent written amendments to the contract

23. The main difference between a term plan and a permanent plan is.

A. permanent plan provide both protection and saving while term plans offer protection only

B. permanent plans provide savings and dividend while term plans provide savings only

C. permanent plans can be converted and renewed while term plans cannot

D. all of the above

24. The number of years that persons at a given age will live on the average ass shown by the mortality table is called

A. law of large amount

B. life income option

C. life annuity

D. life expectancy

25. The official who makes the necessary assumption and calculation with respect to the principal elements of life
insurance premium in order to arrive at the premium rates to be charged is the

A. Life Agents

B. Senior Statistician

C. Insurance Commissioner

D. Actuary

26. The parties involved in life insurance contract are the

A. insurance company and agent

B. insurance company are insured

C. agent and insured

D. Insured and beneficiary

27. To calculate premium for the other modes of payment, the annual premium is

A. divided by the desired number of premium payments

 B. dividend by a conversion factor for the mode of payment desired

C. multiplied by a conversion factor for the mode of payment desired

D. multiplied by a constant conversion factor.

28. When explaining dividends, the following information must be supplied

A. that they are not guaranteed

B. the dividends paid-up in the previous years

C. the anticipated dividends

D. the relation to the cost of the policy

29. Which of the following can give the longest protection?

A. 20-year Endowment

B. Endowment at 65

C. Ordinary Life

D. 20-year Team

30. Which of the following factors would have the least effect on the premium charged for the insurance

A. age

B. occupation

C. income

D. all of the above

31. All of the following would be practicable to become beneficiaries except

A. children by former marriage

B. brothers and sisters

C. someone who owes you money

D. someone to whom you owe money

32. An annuity plan

A. offers life insurance protection

B. the face amount of the policy is reduced

 C. is the same as an endowment plan

D. is purchased of income

33. An automatic premium loan differs from the other policy loans in that automatic premium loan

A. need to be repaid by the policyowner

B. must be repair during the policy year in which it is granted

C. goes into effect requiring no separate action from the policyowner

D. involves higher interest payments because of the greater cost of administration

34. An insurance agent’s license can be revoked for

A. fraudulent practices

B. violation of any provision of the Insurance Code

C. misrepresentation in the application for license

D. any or all of the above

35. Any policy which has lapsed can be reinstated subject to normal conditions of proof of insurability within

A. three years

B. six months

C. one year

D. two years

36. Anybody can be designated a beneficiary except

A. a creditor

B. minors

C. those who expressly prohibited by law to receive donations

D. all of the above

37. Benefits payable under health insurance policies cover

A. accidental death and dismemberment benefits

B. expense reimbursement legally compete

C. disability income benefits

D. all of the above

38. For a contract to be legal and binding

A. parties to the contract must be members of the bar

B. parties to the contract must be legally competent

C. parties to the contract must be above 21

D. parties to the contract must possess blood relationship

39. If a loan is taken on a participating policy, dividends for the that policy while there is a loan against the policy will be

A. suspended

B. paid a reduced rate

C. unaffected

D. increased

40. If policyowner does not pay a premium on the due date, the policy will immediately

A. lapse

B. be converted to a paid-up policy for a lesser amount

C. go into automatic premium loan

D. continue in full force a period of grace

41. In the case of life insurance, a sale is considered completed if the application is signed and payment is made by the
applicant. For the sale is to be considered completed.

A. a medical examination has to be made first

B. payment of the first premium has to be made by the applicant in full or in part, as specified.

One of the acceptable methods of settlement by cash or check in part, with a note for the

balance

C. payment of the first premium has to be made in full by a note first

D. the first premium has to be paid for in full and in cash

42. In the event that the policyowner elects the paid- up insurance option

A. premium stop and the policy continues for a full face until age 65

B. premium cease and protection continues for a reduced amount

C. insurance continues and reduced amount and with reduced premium

D. the policy will automatically terminate

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

A. extended term insurance

B. paid up insurance

C. paid up additions

D. life income option

44. One example covered under the ethical practices and procedures is

A. keep all policyholder’s information confidential

B. always recommend a will

C. never drink in front of clients

D. always pick up the first premium with the application for insurance

45. Persuading a policyowner, directly or indirectly, to surrender or lapse a policy in one company and replacing it with a
policy from another company is

A. rebating

B. twisting

C. knocking

D. discounting

46. Policy reserves are future obligations on the part of

A. the Insurance Commission

B. the Insurance Company

C. the beneficiary

D. the policyowner

47. Prior granting a license, the IC requires proof of

A. a clean record or employment

B. a reasonable educational background

C. a prospective agent’s character and reputation

D. all of the above

48. Selling a person more insurance then what is warranted by his sources is called

A. overloading

B. twisting

C. rebating
 D. knocking

49. The following are unethical practices in the solicitation and procurement of insurance except

A. misleading estimates of the dividends or shares of surplus to be received thereon

B. including a policyholder to lapse, forfeit or surrender a policy he holds for another company

C. misrepresenting the terms of any policy issued by any insurance company or the benefits or advantage promised
thereon

D. obtaining or attempting to obtain by fraud or misrepresentation

50. The IC has the power to adjudicate insurance claims against insurance companies for any single claim not exceeding

A. 1,000,000
B. 250,000
C. 5,000,000
D. 500,000

51. The insurance code specifies that a contract does not take effect unless

A. The policy is delivered to an insured, his assignee or agent, or to a beneficiary

B. payment of the first premium is made to the insurer or its authorized agent

C. no change has take place in the insurability of the life to be insured between the time the application was
completed and the time policy was delivered

D. the insured has named in the policy no fewer than beneficiaries

52. The misstatement of facts by either of the parties of insurance, whether in writing or orally, preliminary and in
reference to making the insurance contract is

A. knocking

B. overloading

C. misrepresentation

D. twisting

53. The suicide clause is in effect for

A. the first 5 month

B. the first year

C. the first 2 years

D. the first 18 years

54.The team knocking means

A. promising to pay to two annuitants a fixed annual income as long as both survive

B. making derogatory remarks about competing underwritten or companies

C. the number of years that person at a given age will live on the average as shown by the mortality table

D. none of the above

55. The three non-forfeiture values in a permanent policy are

A. cash dividends, bonus additions, and extended term insurance

B. cash surrender values, loan value, and assignment

C. waiver of premium, reinstatement, and the policy loan

D. cash surrender value, paid value, and extended term insurance

56. Twisting is

A. paying the premium on one policy surrendering the dividends of another policy

B. the replacement of a policy in one company with another policy in another company

C. an attempt made by an insurance to secure the services of an agent from another company

D. an offense which does not apply to variable concepts

57. When a policy is assigned absolutely

A. the assignee acquires all the rights and interests of the original policyholder

B. the original policyholder still can exercise some of the rights

C. the original beneficiary is not changed

D. none of the above

58. When you bought an insurance policy on your wife’s life you were 27 and was 26, but you stated that you were 26
and was 27. Five years later, your wife died. The insurance company will pay

A. the face amount

B. the face amount adjusted for misstatement of age

C. the sum of the premium paid

D. slightly less than the face amount

59. Which of the following is a settlement option?

A. policy loan

B. cash surrender value

C. extended term insurance option

D. interest on insurance proceeds

60. Which of the following is not derived from the non-forfeiture values?
A. cash surrender value

B. paid up insurance

C. dividends

D. extended term insurance

3
Corr
0 A hazardous occupation could be defined
ect
5

A. an occupation which expose the insured to a degree of danger of sustaining injury

B. an occupation in an unhealthy working condition exposing the insured to elements which can cause sickness
C. an occupation which exposes the insured to social hazards

D. all of the above

3
Corr
6 A life insurance company earns income from two main sources
ect
0

A. premium income and investment income

B. mortgage income and premium income
C. dividend income and interest income
D. mortgage income and dividend income

1
Corr
5 A man with moderate means can have maximum protection possible through
ect
5

A. 20-year Endowment
B. Limited Pay Life
 C. Term Insurance
D. Whole Life Insurance

1
Corr
8 A participating plan entitles the policyowner to receive a return of excess premium. Such is termed as:
ect
0

A. endowment

B. dividends
C. cash value
D. cash surrender value

2
Corr
5 A policy with a minor as the proposed insured is called
ect
5

A. related policy

B. juvenile policy
C. regular policy
D. substandard policy

1
A term insurance which allows the policyowners to convert it to a permanent insurance within a specified Corr
9
period without evidence of insurability contains ___________________ features. ect
5

A. convertibility
B. renewability
C. dividend option
D. both a & b

2
Corr
0 A term policy only offers
ect
0

A. cash values

B. protection
C. savings
D. dividends

2
Corr
1 A term rider is
ect
5
 A. a term policy with a waiver of premium
B. another name for a convertible term policy
C. a renewable term policy

D. a term insurance added to a permanent plan

3
Corr
1 An agent is filling up the Agent's Confidential Report. What information must he put in his report?
ect
5

A. information about insured's standing in the community

B. information about insured's finances

C. all information he knows which are material to the application for insurance
D. a & b only

1
An individual, at age 35, purchases a policy under which he will in 20 years receive the face amount of the Corr
7
policy himself if he is still alive at that date. This policy is obviously a ect
0

A. 20-year Endowment
B. 20-pay Life
C. 20-year Term
D. None of the above

1
Incor
5 An insurance plan which offers both protection and savings is called
rect
0

A. Temporary Plan

B. Permanent Plan
C. Participating Plan
D. Non-Participating Plan

2
Corr
3 Disability benefits are not paid
ect
0

A. for self-inflicted injuries

B. if there is a loan against the policy
C. if all the policy dividends have been withdrawn
D. if disability resulted from sickness only
2
Corr
8 In insurance, risk means
ect
5

A. chances of you being declined by the company

B. hazard on people's lives

C. chances of the beneficiary being paid
D. none of the above

1
Corr
4 Life insurance contributes directly to the welfare and progress of the country by
ect
0

A. accumulating capital for investment in commerce and industry

B. partially relieving the community of the care of dependents
C. encouraging provisions for the future

D. all of the above

1
Mr. Juan Valdez wants a policy which will entitle him to receive dividends yearly. What will you recommend Corr
6
to Mr. Valdez? ect
0

A. Participating
B. Non-Participating Plans
C. Term Insurance
D. None of the above

2
Mr. Pedro Cruz became paralyzed as a result of jumping out of the window in an attempt to commit suicide. Corr
3
Under the usual provisions of a disability income policy, he would be entitled to ect
5

A. receive the total disability income benefit and the waiver of premiums
B. receive partial disability benefits
C. be granted the waiver of premium

D. receive neither disability income nor waiver of premiums

3
Mr. Roel Reyes has been confined in a hospital 3 years prior to his application for insurance. He, therefore, Corr
2
needs to give the following information ect
0

A. name of attending doctor, diagnosis, and date of confinement

B. the bill and medicines
 C. name of doctor only
D. date of confinement only

2
Corr
4 One supplementary benefit offered is a payor's benefit which is intended to
ect
5

A. provide for the return of premiums to an adult payor in the event that a minor insured dies

B. provide a waiver of premium benefit in the event of death or disability of the person paying the premium
C. allow the insurance company to pay the policy's proceeds to the person who seems equitable entitled to the proceeds
D. assure that the adult payor will retain a vested in the policy when the insured reaches the age of majority

3
Corr
3 Stock companies are owned by
ect
5

A. policyowners

B. stockholders
C. creditors
D. government

3
The entire contract between the policyowner and the insurance company include: (Choose the incorrect Incor
5
statement) rect
0

A. the application and the policy

B. any verbal statement made by the agent to the application

C. any document attached to the policy when issued
D. any subsequent written amendments to the contract

2 The main difference between a term plan and a permanent plan is Corr
0 ect
5

A. permanent plan provide both protection and savings while term plans offer protection only
B. permanent plans provide savings and dividends while term plans provide savings only
C. permanent plans can be converted and renewed while term plans cannot
D. all of the above

1
The number of years that persons at a given age will live on the average as shown by the mortality table is Corr
4
called ect
5

A. law of large numbers

B. life income option
C. life annuity

D. life expectancy

3
The official who makes the necessary assumption and calculation with respect to the principal elements of life Corr
6
insurance premium in order to arrive at the premium rates to be charged is the ect
5

A. Life Agent
B. Senior Statistician
C. Insurance Commissioner

D. Actuary

1
Corr
3 The parties involved in life insurance contract are the
ect
0

A. insurance company and agent

B. insurance company and insured

C. agent and insured
D. insured and beneficiary

3
Incor
7 The term loading means
rect
0

A. the difference between the gross and net premiums for the purpose of paying the insurance overhead expenses
including commissions and taxes
B. the amount which the company will lend the policyholder with the policy as a security
 C. the amount payable in the event of the occurrence of a loss which renders him unfit for insurance
D. none of the above

9 Corr
To be able to calculate the required premiums for a given policy, the agent must know the applicant's
5 ect

A. age
B. choice of plan
C. face amount desired

D. all of the above

1
Incor
0 To calculate premiums for the other modes of premium payment, the annual premium is
rect
0

A. divided by the desired number of premium payments

B. divided by a conversion factor for the mode of payment desired

C. multiplied by a conversion factor for the mode of payment desired

D. multiplied by a constant conversion factor

1
Corr
9 Two attractive features of a Term Insurance are:
ect
0

A. convertibility and cash values

B. cash values and dividends
C. protection and dividends

D. convertibility and renewability

1
Corr
2 When explaining dividends, the following information must be supplied
ect
0

A. that they are not guaranteed

B. the dividends paid-up in the previous years
C. the anticipated dividends
D. the relation to the cost of the policy

3
Corr
4 Why is it important that the application is the basis of the policy?
ect
0
 A. because the completed application is the basis of the policy contract and the company may accept or reject
an application based on the information given in the application
B. for the agent to have available data of his prospect in connection with future sales
C. to avoid the necessity of the insurer putting all relevant details in the contract
D. none of the above

5
Incor
7 A person has insurable interest on the life of
rect
0

A. his child or grandchild

B. any person upon whom he is wholly or in part dependent on, or from whom he is receiving support or
education
C. any person in whom he has pecuniary interest

D. all of the above

6
Corr
0 A policyholder may obtain money from the insurance company and still remain insured by
ect
0

A. surrendering the policy for its cash value

B. discontinuing payment of premium for some period

C. taking a policy loan

D. taking the extended insurance option

5
Incor
8 According to insurance law, a common-law spouse cannot be designated a beneficiary
rect
5

A. since there is no benefit of marriage in the relationship

B. if his/her legal partner is still living and the previous marriage has not been legally dissolved
C. since the common-law relationship is an immoral relationship
D. all of the above

6
Incor
3 All of the following statements regarding a life insurance application are correct except
rect
5

A. it must be signed by the applicant

B. usually it will be a part of the policy contract
C. misstatement of material facts could void the policy during the contestable period
 D. statements made on the applications are warranties

5
Corr
7 Anybody can be designated a beneficiary except
ect
5

A. a creditor
B. minors

C. those who expressly prohibited by law to receive donations

D. all of the above

6
Corr
5 For life insurance coverage to be valid, insurable interest must exist
ect
0

A. only at the inception of the policy

B. only at the time of the loan
C. throughout the entire lifetime of the policy
D. both at the time of the policy issue and the time of the loan but not necessarily throughout the lifetime of the policy

6
If a loan is taken on a participating policy, dividends for that policy while there is a loan against the policy Corr
8
will be ect
0

A. suspended
B. paid a reduced rate

C. unaffected
D. increased

6
Incor
2 If a policy with the accidental death rider becomes paid up
rect
0

A. the accidental death rider ceases

B. the face amount of the policy is reduced
C. premiums on the basic policy stop but the rider premium continues
D. none of the above

5
Incor
1 If a policyowner commits suicide within one year, what's the company's ability?
rect
5
 A. the company is not liable at all
B. the company would be liable for the payment of the face value of the policy

C. the company would be liable for the payment of the premiums paid by the insured only
D. none of the above

6
Corr
1 If a policyowner whose wife is the irrevocable beneficiary wishes to cash in his policy, he must
ect
5

A. tell his wife what he is going to do

B. first take a loan on the policy
C. have the check issued in the name of his wife

D. have the wife's consent

6
Corr
7 If policyowner does not pay a premium on the due date, the policy will immediately
ect
5

A. lapse
B. be converted to a paid-up policy for a lesser amount
C. go into automatic premium loan

D. continue in full force for a period of grace

3
If the insured dies during the grace period of an unpaid life insurance policy, the amount payable to the Corr
8
beneficiary is usually the ect
5

A. total premium paid plus interest

B. Cash surrender value of the policy minus the unpaid premium

C. face amount of the policy minus the unpaid premium.

D. full face amount

5
In the event an employee leaves the company in which he is a member of its group insurance policy, his group Corr
4
coverage can be changed to an individual policy using the ect
0

A. policy exchange facility

 B. conversion privilege
C. change of plan provision
D. policy change form

5
Corr
1 In the event that the policyowner elects the paid-up insurance option
ect
0

A. premium stop and the policy continues for a full face until age 65

B. premiums cease and protection continues for a reduced amount

C. insurance continues at a reduced amount and with reduced premium
D. the policy will automatically terminate

4
Name the provision in a permanent life insurance policy under which, if the premiums are discontinued, full Inco
9
insurance coverage will be maintained for a specified period. rrect
5

A. extended term insurance

B. paid up insurance
C. paid up additions
D. life income option

5
Corr
9 Policy reserves are future obligations on the part of
ect
0

A. the Insurance Commission

B. the Insurance Company

C. the beneficiary
D. the policyowner

6
Inco
4 Prior granting a license, the IC requires proof of
rrect
0

A. a clean record of employment

B. a reasonable educational background
C. a prospective agent's character and reputation

D. all of the above

5 The common practice of most life insurers is that the life insurance goes into force
Inco
8
0 rrect

A. when the application is received by the branch office

B. when the policy is delivered to the applicant
C. in accordance with the legal stipulation of the Insurance Code

D. when the agent gives a binding receipt

6
The IC has the power to adjudicate insurance claims against insurance companies for any single claim not Corr
4
exceeding ect
5

A. 1,000,000,
B. 250,000

C. 5,000,000
D. 500,000

3
Corr
9 The insurance industry is under government regulations because
ect
5

A. it is required to account for money spent in company operations

B. it pays high taxes

C. it affects public interest

D. it is a charitable institution

6
Corr
3 The person who purchases the annuity plan is called the
ect
0

A. assignor
B. owner
C. insured

D. annuitant

6
Corr
6 The typical grace period provision in a life insurance policy obliges the life insurance company to
ect
5

A. establish a policy loan to cover any premium which the policyowner fails to pay by due date
B. keep the policy in force for the duration of any major disability suffered by the policyowner
C. allow the policyowner a three-month extension beyond the due date to make the late premium payment without
 penalty

D. none of the above

5
Corr
6 Under the law pertaining to life insurance
ect
0

A. only minor children can be named irrevocable beneficiaries

B. only the wife can be named irrevocable beneficiary
C. only the wife and the children can be named irrevocable beneficiaries

D. any person with insurable interest can be named irrevocable beneficiary

5
Corr
6 When the proceeds of a life insurance policy are left with the company to earn interest
ect
5

A. income tax is levied on the proceeds

B. income tax is levied on the interest earnings of the proceeds

C. estate tax is levied on the proceeds
D. donor's tax is levied on the proceeds

6
When you bought an insurance policy on your wife's life you were 27 and she was 26, but you stated that you Corr
0
were 26 and she was 27. Five years later, your wife died. The insurance company will pay ect
5

A. the face amount

B. the face amount adjusted for misstatement of age

C. the sum of the premium paid
D. slightly less than the face amount

4
Inco
9 Which of the following is a settlement option?
rrect
0

A. policy loan
B. cash surrender value
C. extended term insurance option

D. interest on insurance proceeds

5
Corr
0 Which of the following is not derived from the non-forfeiture values?
ect
0
 A. cash surrender value
B. paid up insurance

C. dividends
D. extended term insurance

4
Inco
0 Which of the following statements is correct?
rrect
0

A. an agent is allowed to share commissions when selling a whole life policy but not when selling a term policy

B. an agent is allowed to share commissions with another licensed agent or agents but with no one else
C. sharing the commission with any other person is called twisting
D. an agent is not allowed to share commissions with any person

5
Corr
2 Which of the non-forfeiture option gives the largest amount of protection?
ect
0

A. fully paid insurance

B. cash surrender value

C. extended term insurance

D. all of the above give equal protection

5
Which one of the following provisions in a permanent life insurance policy may lapse for non-payment of Inco
9
premium? rrect
5

A. Guaranteed Insurability

B. Automatic Premium Loan

C. Settlement Options
D. Reinstatement Provision