Ceilli 8
Ceilli 8
Ceilli 8
I. when there are more buyers than share available for sale
A) I and III
B) II and IV
C) I and II
D) III and IV
A) I and II
B) I and III
C) II and III
D) II and IV
4) What does the term “Prospect” refer t ?
A) Safety
B) Hedging inflation
C) Retirement income
D) Achieving financial freedom
7) With regard to the investment-linked life policy, the uncertainty of investment gains or losses is shifted to
A) Insurers
B) Insured
C) Agents
D) Brokers
8) Using the dual policy method, calculate the cash value of 5000 units purchased at an offer price of RM 3 and sold at
bid price of Rm 1 with a mortality charge of 1% and RM 100 policy fee
A) RM 14,750
B) RM 4,850
C) RM 4,600
D) RM 9,350
9) What are the benefits of investing in investment link funds?
I. diversification
II. Flexibility
III. Expertise
10) Investment – linked life insurance policies must have a minimum death benefit of
A) RM 3000
B) RM 4000
C) RM 5000
D) RM 6000
11) What fund is used to determine investment return for a with-profit life insurance policy?
A) Investment fund
B) Fixed asset fund
C) Life fund of the insurer
D) Excess of premium over classes fund
12) Short term government funding issued on a regular basis with payment normally within a year is known as ?
A) Government bond
B) Central bank bills
C) Finance bills
D) Treasury bills
II. the basis and frequency of valuation of assets underlying the fund
III. guarantee
IV. clear information that the investment risks are to be borne by the policy owners
A) I and IV
B) I,II and III
C) II and III
D) III and IV
16) Using the single pricing method, calculate the cash value of 4000 units at a units at unit price of RM 1 a mortality
charge of 2% and a RM 100 policy fee
A) RM 3500
B) RM 3800
C) RM 3820
D) RM 3620
A) Option form
B) Medical reports
C) Customer fact find form
D) All of the above
19) Funds that are restricted to investment in particular geographical regions or industries are known as ______ funds
A) Bond
B) Managed
C) Specialized
D) Balanced
20) The premium relief is allowable when the _____is on the life of the spouse of the individual
I. life insurance
A) I only
B) II only
C) I and II
D) II and III
I. surrender benefit
A) I,II and IV
B) II,III and IV
C) I and II
D) I,II and III
23) Which type of investment fund fluctuates drastically in times of a volatile stock market?
A) Property fund
B) Equity fund
C) Fixed deposit fund
D) Specialized fund
24) What type of fee is charged under the investment-linked life policy to cover the administrative expenses of setting
up the policy?
A) Policy fee
B) Mortality charges
C) Surrender charges
D) Annual management charges
A) To disclose all material fact which will influence the acceptance of the proposal by insurer
B) To simplify the work of an agent
C) To serve as ground for claim rejection
D) To include a statement on claim procedures
26) The administrative fee, insurance charge and fund management fee under an investment –linked life insurance
policy are :
A) Guaranteed
B) Not subject to review
C) Subject to change by insurance companies
D) Always “up front” charges
27) Misrepresentation resulting in inducing a policy owner to cancel or have his own policy made paid-up in order to
purchase a new policy to earn more income for the agent is known as
A) Switching
B) Changing
C) Replacing
D) Twisting
A) I and II
B) I and III
C) II and III
D) I,II and III
30) The trust deed in a unit trust sets out the following EXCEPT
II. bond funds are also known as “income” or “fixed income” funds
III. specialized funds are normally segmented based on geographical regions or particular
industries
IV. property funds are generally considered to be safer than equity funds, but have lower
liquidity
32) According to the textbook, there is a _______ between expected return and risk that should prevail in a rational
environment
A) Trade off
B) Correlation
C) Relationship
D) Reverse proportion
33) ________is a form of misrepresentation in which a policy owner is induced to discontinue an existing insurance
policy, and purchase a new policy
A) Twisting
B) Switching
C) Withdrawal
D) Money laundering
37) In investment-linked insurance, when the investment premium placed in unitized fund?
38) During an equity market crash,_______ usually the first to depreciate in high amounts
A) Property funds
B) Balanced funds
C) Corporate funds
D) Equity asset/funds
39) What are the two factors which determine the value of an investment-linked insurance policy?
A) I and II
B) II and III
C) II and IV
D) III and IV
40) Which of the following charges will NOT be levied on investment-linked life insurance policies
41) An investment-linked life insurance policy has a free look provision at least____ days
A) 14
B) 15
C) 21
D) 30
42) Under the current investment-linked whole life plan, the policy has total flexibility to alter a policyholders need for
investment and protection in accordance with the
A) Market trend
B) Insurers suggestion
C) Policyholders wishes
D) Change of law
43) The deposit insurance system in Malaysia launched in September 2005 was managed by
A) PIDM
B) PIAM
C) LIAM
D) BNM
44) Under the 1996 budget, an extra tax deduction of ______ was allowed for education and medical insurance
premium
A) RM3000
B) RM6000
C) RM9000
D) RM5000
45) If the bond fund is worth of RM 10 million and there are 2 million units, what will be the price per unit for the bond
fund?
A) RM1
B) RM3
C) RM5
D) RM7
46) Mr Nathan intends to buy a single premium investment-linked life policy with a single premium of RM 50 000. He
wants to redeem the policy’s value after eight years.
Calculate the death cover now, if its based on sum assured cover only .
A) RM50,000
B) RM62,500
C) RM67,500
D) RM51,000
47) The switching facility provided in investment-linked life insurance policies is very useful for the purpose of :
48) What is the amount of life cover for Encik Ahmad who bought a single premium investment-linked whole life plan
with RM20,000 single premium ?
A) RM5,000
B) RM10,000
C) RM25,000
D) RM30,000
49) Which of the following criteria are normally used when comparing investment-linked life insurance policies with
traditional policies?
I. policy loan
50) In a proposal for whole-life or endowment assurance, which of the contract features below must be highlighted in
the literature
III. that the surrender values in the early years are often less than the total premium paid
A) I and II
B) III and IV
C) I and III
D) II and IV
A) A speculative investor
B) A long term investor
C) An investor with large funds available
D) An investor with small fund available
52) Investment link life insurance was introduced in Malaysia in the late
A. 1970s
B. 1980s
C. 1990s
D. 2000s
53) The investment linked insurance business is a contract of
55) According to the textbook, there is a law that states that our investment returns are ________ to the risk we take
A. Directly proportional
B. Positively proportional
C. Negatively proportional
D. Indirectly proportional
56) What is the term given to the strategy of placing money into several different categories of investment ?
A. Diversification
B. Hedging
C. Profit maximization
D. Risk control
57) In times of volatile equity market, the cash and maturity values of an investment linked life insurance policy will
I. Rise
II. Fall drastically
III. Fluctuate slightly
A. I and II
B. I and III
C. II and III
D. I, II and III
A. Are fixed
B. Vary according to the amount invested
C. Are negotiable
D. Change in response to market trends
59) From the statements about the similarities and differences between single premium investment linked life insurance
( SP-IL) and Unit trust (UT) given below, select the statement that not true
A. Insurance brokers
B. Stock brokers
C. Stock agents
D. Share advisers
62) What is the minimum age to apply own investment linked life insurance policy
A. 17
B. 16
C. 18
D. 19
A. Every day
B. Every business day
C. Every month
D. Once a year
64) If a policy cancelled within free look period the insurer shall not refund
A. 3% to 8%
B. 3% to 9%
C. 4% to 7%
D. 4% to 9%
67) Secured loans with security being charged on the company’s property or on its asset
A. Convertible stock
B. Loan
C. Debenture stock
D. Trading
68) The death and disability benefits of an investment linked policy are based on
69) When in doubt about the code and conduct, employees can seek guidance from
I. An experience agent
II. The company management
III. Bank Negara
IV. Their respective heads of department
A. I,II,III
B. I,II and IV
C. II,III and IV
D. I,II,III and IV
70) Which funds are the top end of the risk-return graph?
A. Cash fund
B. Equity fund
C. Balanced fund
D. Managed fund
A. Debenture stock
B. Government stock
C. Loan stock
D. Convertible stock
72) The payment made to the insured upon the cancellation of a policy is called?
A. Investment value
B. Return of premium
C. Surrender value
D. Penalty payment
A. Temporary assurance
B. Non-participating whole life insurance
C. Investment linked insurance
D. Non-participating endowment insurance
o Service charge 5%
o Unit price Rm 1/unit
o Mortality charge 1%
o Policy fee Rm 72
Based on the above information, calculate its cash value using single pricing
A. Rm 4,250
B. Rm 4,750
C. Rm 4,900
D. Rm 4,630.50
75) Currently, the financial instruments in which investment-linked funds are invested
I. Cash
II. Equity
III. Property
IV. Diversified
A. I only
B. I and II
C. I,II, and III
D. I,II,III and IV
I. Equity fund
II. Property fund
III. Cash fund
IV. Bond fund
2. C 27. D 52. C
3. D 28. B 53. B
4. B 29. A 54. D
5. A 30. A 55. A
6. C 31. C 56. A
7. B 32. A 57. A
8. B 33. A 58. A
9. D 34. C 59. A