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1. A life aged 40, the rate of mortality at age 40 is 5.62 per thousand lives, if there are 100,000 proposers all aged 40, how many deaths can the insurance company expect?

1.1. 562

2. Investment

2.1. Chapter 5

2.1.1. example of investment in Money Markets

2.1.1.1. Treasury Bills

2.1.2. People generally want to invest

2.1.2.1. B LA

2.1.2.1.1. B

2.1.2.1.2. L

2.1.2.1.3. A

2.1.2.1.4. amass great health

2.1.3. simple (current) net worth analysis

2.1.3.1. explains

2.1.3.1.1. total sum of all assets owned by a person in present value minus the existing total sum of all liabilities he is obliged to settle.

2.1.4. main purpose of an agent conducting a risk profile on his potential client

2.1.4.1. to help the potential client understand his own risk profile

2.1.4.1.1. i.e. whether he has conservative, aggressive or balanced risk characteristics, and also to consider the type of asset categories suitable for his profile.

2.1.5. Which of the statements below are true?

2.1.5.1. A person’s investment horizon

2.1.5.1.1. is the length of time that he is prepared to hold a particular asset before he liquidates it.

2.1.5.2. The investment horizon of an individual, among other factors

2.1.5.2.1. also depends when he needs liquidity in the future date for specific objective/s.

2.1.5.3. The cost or penalty that an investor has to pay in the event he needs to liquidate the asset earlier than expected

2.1.5.3.1. also has a bearing on his choice of investment horizon.

2.1.5.4. It is pertinent for an agent

2.1.5.4.1. to strike a clear understanding with a potential client as to how much the latter

2.1.6. Which of the following statements is correct?

2.1.6.1. Diversification not only means

2.1.6.1.1. spreading out investment in different asset categories or fund types,

2.2. Chapter 6

2.2.1. Malaysian Treasury bills are debt instruments that are considered safe because

2.2.1.1. SIT

2.2.1.1.1. S

2.2.1.1.2. I

2.2.1.1.3. T

2.2.2. Which of the following statements are correct?

2.2.2.1. Normally, when interest rates fall, the prices of fixed income or bond assets may rise;

2.2.2.1.1. when interest rates rise, their prices may drop.

2.2.2.2. Government bonds are safer than corporate bonds

2.2.2.2.1. but their returns are comparatively lower.

2.2.2.3. The maturity period of short-term government bonds is usually less than 5 years;

2.2.2.3.1. for the medium-term ones it is usually 5-10 years

2.2.2.4. Preference shares are hybrid securities with both equity and fixed income characteristics.

2.2.2.4.1. In the event the company concerned winds up,

2.2.3. The similarities and differences between unit trusts and single premium investment-linked plans are:

2.2.3.1. The investment approach of both are similar.

2.2.3.2. The life insurance protection element is not part and parcel of unit trust products, whereas for single premium investment-linked plans, it is.

2.2.3.3. Unit trusts do not impose cost of insurance and policy fee charges

2.2.3.3.1. since the life protection element is absent.

2.2.3.4. A trustee must be appointed for unit trusts

2.2.3.4.1. but this is not compulsory for single premium investment-linked plans.

2.2.4. Real Estate Invest Trusts (REITs) is TRUE

2.2.4.1. REITs operate in a way similar to unit trusts.

2.2.4.2. Rental income from the properties invested by a REIT

2.2.4.2.1. is distributed to investors in the form of dividend.

2.2.4.3. A REIT can invest in a wide range of properties

2.2.4.3.1. like malls, office blocks, apartments, commercial lots, hotels, etc.

2.2.4.4. REITs may acquire shares in property development companies.

2.2.5. Which of the statements below is incorrect?

2.2.5.1. Sukuk securities are issued by Malaysia in Ringgit only.

2.2.5.2. Sukuk are like bonds but they are based on Shariah-compliant principles.

2.2.5.3. Malaysia is the world’s largest issuer of sukuk.

2.2.5.4. Sukuk securities issued by Malaysia can be in USD.

2.2.6. The protection offered by PIDM on the deposits placed in banking institutions and policies bought from insurance companies operating in Malaysia is granted

2.2.6.1. only to banks, insurance companies and takaful operators which are member institutions of PIDM.

2.2.6.2. with a levy charged to member institutions.

2.3. Chapter 7

2.3.1. Sukuk is gaining ground in terms of transaction volumes in Malaysia, including for investment-linked funds because

2.3.1.1. this investment vehicle is becoming more popular among investors.

2.3.1.2. of the strong support from the Government and mega corporations, especially Malaysian ones.

2.3.1.3. of its higher return experience compared to conventional bonds because of special incentives provided by the Government.

2.3.1.4. it is traded only in Malaysian Ringgit.

2.3.2. average yield of Malaysian Treasury bills with tenures of 6 to 12 months is

2.3.2.1. around or slightly better than 3%.

2.3.3. If is safer to rely on professional fund managers appointed for investment-linked funds than to invest directly in the stock market because

2.3.3.1. an ordinary individual is generally not equipped to identify the right stock that will reap gain.

2.3.3.2. it is not easy for an ordinary individual to pick the right time to buy and the right time to sell for optimising capital gains.

2.3.3.3. ordinary individuals, especially those occupied with work, do not have the time and knowledge to properly monitor market trends.

2.3.4. Malaysian bonds are deemed to be

2.3.4.1. less volatile than global bonds.

2.3.4.2. more volatile than global bonds.

2.3.4.3. rated at very high preference because the country’s economy is growing vibrantly

2.3.4.4. experiencing better yields than global bonds for many years.

2.3.5. Compared to government bond funds, corporate bond funds have

2.3.5.1. higher yields and higher risks

2.3.5.2. lower yields and lower risks.

2.3.5.3. more or less similar yield and risk ratios.

2.3.5.4. a longer tenure.

2.3.6. If an insurer has an investment-linked fund tracking the FBM-KLCI index, it means

2.3.6.1. the fund invests in the same stocks of the companies identified by the index.

2.3.6.2. the fund manager refers to the index as the benchmark for guiding the fund’s investment strategy and also the return targets in the ensuing years.

2.3.6.3. the fund invests in stocks of companies in the same industries as the companies identified by the index.

2.3.6.4. the insurer is obligated to grant the returns according to the ratios experienced by the index. If the actual return of the fund in any period is lower than that shown by the index, the insurer will top up the difference. III

2.4. Chapter 8

2.4.1. Valuation of units in an investment-linked fund must be done

2.4.1.1. every business day.

2.4.2. The guidelines stipulated by the regulatory authority in allowing a life insurer to undertake unit splits for an investment-linked fund once a year is on the condition that “there is sustainable appreciation on net asset value (account value) over a six-month period preceding the split.” Which of the statements below is correct regarding the above statement?

2.4.2.1. This refers to an

2.4.2.1.1. increase in the average monthly net asset value (account value) consecutively for 6 months.

2.4.3. Since part of the initial premium of a regular premium investment-linked plan may already have been allocated and invested to acquire fund units by the time the customer decides not to take the plan within the 15 days free-look period, in what manner will the refund be made?

2.4.3.1. Refund of unallocated premium + net asset value (account value) at next valuation date + insurance charges and policy fee already deducted - medical examination fees if any

2.4.4. Life insurers offering investment-linked insurance are obligated to provide certain fundamental “transparencies” as required by regulatory guidelines. These are:

2.4.4.1. SAPA

2.4.4.1.1. separate Fund Fact Sheet for each of the funds.

2.4.4.1.2. a statement on the policy owner’s net asset value (account value) details at least once a year.

2.4.4.1.3. publishing of fund unit prices daily in at least one national English newspaper and one national Bahasa Malaysia newspaper, and on the insurer’s website. a

2.4.4.1.4. a performance report on each fund of the policy owner at least once a year

2.4.5. Which of the statements below regarding sales illustrations for investment-linked plans are correct?

2.4.5.1. The low and high projection for an equity fund should not be above 2% and 9% respectively for the first 20 years.

2.4.5.2. The low and high projection for a managed fund should not be above 3% and 8% respectively for the first 20 years.

2.4.5.3. The low and high projections for a fixed income/bond fund should not be above 4% and 7% respectively for the first 20 years.

2.4.5.4. For projected illustrations beyond 20 years, insurers must abide by the low scenario rates of 2%, 3% and 4% for equity funds, managed funds and bond funds respectively. The high scenario rates for the same three funds are 6%, 5.5% and 5% respectively.

2.4.6. What are the prerequisites for the launch of a new investment-linked fund?

2.4.6.1. A minimum fund size can be set by the insurer.

2.4.6.2. The initial offer period shall not be more than 2 months from the date of launch.

2.4.6.3. If the minimum fund size is not reached by the end of the initial offer period, the insurer can call off the fund and refund all premiums collected.

2.4.6.4. The insurer will also have to pay interest or profit from the premiums collected during the initial offer period to the intended policy owners.

2.5. Chapter 9

2.5.1. Which of the following statements are correct?

2.5.1.1. Agents must utilise the sales materials and sales illustrations provided by their respective principal in their sales process.

2.5.1.2. Agents must utilise the sales materials and sales illustrations provided by their respective principal in their sales process. However, they may have the discretion to supplement these provided the facts do not deviate from those in the materials and illustrations provided by the principal.

2.5.1.3. The sales intermediary must also sign the CFF form as witness after the intended new policy owner has signed.

2.5.1.4. Only the signature of the intended new policy owner must be obtained on an insurer’s Customer Fact-Find (CFF) form.

2.5.2. As soon as a policy contract has been issued by a life insurer,

2.5.2.1. the agent should deliver the policy contract without delay.

2.5.2.2. the delivery process should entail the explanation of the contractual provisions and re-explaining the benefits. The agent then has to request the new policy owner to sign the delivery acknowledgement slip. Finally, the agent must return the signed acknowledgement slip to the insurer for recording and filing.

2.5.2.3. the insurer is to mail (by registered mail) the policy contract to the correspondence address of the new policy owner. The registered mail slip should suffice as evidence that the contract has reached the policy owner.

2.5.2.4. if the new policy owner is unavailable at the first time of personal delivery by the agent, acknowledgement of receipt of the policy contract signed by a representative of the policy owner’s household or office shall be deemed valid. The agent does not need to follow up on this.

2.5.3. Agents who have sold investment-linked plans should conduct reviews with their clients ideally once a year. The purposes are

2.5.3.1. to provide updates on the performance progress of fund/s selected by the clients.

2.5.3.2. to discuss and ascertain whether the client’s financial objectives might have changed due to certain circumstances.

2.5.3.3. to discuss and ascertain whether the original risk profile of the client has changed due to certain circumstances.

2.5.3.4. to discuss alternative next steps where necessary.

2.5.4. The Code of Conduct pertaining to life insurance selling applies to

2.5.4.1. all agents.

2.5.4.2. all employees of life insurers.

2.5.5. Which of the following statements are correct?

2.5.5.1. The Customer Fact-Find form of a life insurer officially documents important facts concerning the financial data concerning a prospective policy owner and his family.

2.5.5.2. The free-look period commences from the date the client signs the acknowledgement slip upon receiving the policy.

2.5.5.3. Agents may design their own financial planning form to gather financial data and financial information of their prospective clients for analysis. However, the format must be approved by their principal.

2.5.5.4. Cancellation of a policy is allowed if the request by a new policy owner falls within the 15 days free- look period. The period commences from the date the policy contract is passed to the agent for delivery.

2.5.6. The pertinent points highlighted by the Guidelines on Minimum Standards for Treating Customers Fairly (TCF) for agents’ attention are:

2.5.6.1. Agents should inform customers fully about the key benefits, key risks and exclusions.

2.5.6.2. Agents must first be well-trained, especially involving the sale of investment and savings products.

2.5.6.3. The product being proposed to a customer should be based on suitability, needs and risk appetite.

2.5.6.4. Agents must guide the customers as to what details are necessary to declare and what are not necessary so that the concise personal information captured in the application documents will cater for a smooth underwriting process.

2.6. high protection with low premium

3. PCE : Life

3.1. Life insurance contracts are

3.1.1. long- term

3.1.1.1. contracts with usually

3.1.1.1.1. level

3.2. In the event of premature death

3.2.1. life insurance provides

3.2.1.1. effective solution for financial security

3.3. main purpose of the non-participating contracts is

3.3.1. for protection

3.4. Which of the following benefits is provided under a term insurance?

3.5. objective of the limited payment whole life policy is

3.5.1. to appeal to the assured with the idea of paying up the premium during his working lifetime

3.6. The endowment insurance can be viewed as a combination of

3.6.1. a decreasing term insurance and an increasing investment component.

3.7. Anticipated Endowment Insurance is an endowment policy with installment cash payment by the insurers to the policyholder, payable at regular interval

3.7.1. during the term of the policy

3.8. purpose of an annuity is to protect against

3.8.1. the outliving of one’s income

3.9. The annuitant pays a lump sum at entry, or a periodical premium for a defined period. On the attainment of a specified age, or on the survival by the annuitant of a defined period, the insurer pays an annuity of a specified amount until death. This annuity is called

3.9.1. deferred annuity

3.10. endowment policy

3.11. This contract pays out a lump sum on the diagnosis of any of a number of specified diseases. This is a/an

3.12. The premium of investment-linked policies can be divided into

3.12.1. MIE

3.12.1.1. mortality and/or morbidity cost related

3.12.1.2. investments related

3.12.1.3. expense related

3.13. The contract of group insurance is between

3.13.1. the insurance company and the employer

3.14. Which of the following is NOT payable under the Accidental Death Supplementary Benefit of the policy?

3.14.1. death as a result of collision during motorbike race between friends.

3.14.2. death as a result of a fall down a flight of steps.

3.14.3. death caused by a stampede during the outbreak of a fire.

3.14.4. death caused by falling debris from a military aircraft that has crashed.

3.15. Joint life insurance can be use on

3.15.1. the lives of husband and wife

3.15.2. the lives of business partners

3.16. The policy is issued on the life of the parent. The child is designated as the beneficiary and money is payable on the child attaining a specified age mentioned in the policy. This is referred to

3.16.1. protected educational policies

3.17. main function of the PA is

3.17.1. saving and investment

3.18. An ordinary life policy does provide a condition and privilege which allows the payment of premium without any forfeiture or penalty provided it is paid within a number of days after the due date. This period is known as

3.18.1. grace period

3.19. The policyholder becomes entitled to loan after the policy

3.19.1. has acquired a cash value

3.20. Once the policy is converted into paid up policy, a participating policy will

3.20.1. cease to participate in future profit

3.21. For policy reinstatement, the company reserves the right to request for

3.21.1. financial evidence

3.22. Admission of age varies depending on the insurer. Generally, which of the following documents are acceptable as proof of age by the life office?

3.22.1. CISI

3.22.1.1. C

3.22.1.1.1. certificate of birth

3.22.1.2. I

3.22.1.2.1. identity card

3.22.1.3. S

3.22.1.3.1. international passport

3.22.1.4. I

3.22.1.4.1. school leaving certificate

3.23. If the insured commits suicide within a stated period of time (usually a year to two years) from the date of inception or reinstatement of the policy, the policy

3.23.1. becomes void and the insurer is not liable to pay the claim, except to return all premiums paid.

3.24. Which of the followings are the major factors which influence mortality?

3.24.1. SOAE

3.24.1.1. social status

3.24.1.2. occupation

3.24.1.3. age

3.24.1.4. ethnicity

3.25. Underwriting for life insurance contracts includes

3.25.1. financial underwriting

3.25.2. medical underwriting

3.25.3. moral underwriting

3.26. Hazardous or unhealthy occupation example, liquor trade is under which of the following extra risk categories?

3.26.1. level extra mortality

3.27. When the proposal is approved, _____ is issued by the insurer to the proposer requesting him to make the necessary payment of premium within a certain number of days.

3.27.1. a letter of acceptance

3.28. The extra risks are allowed by the following methods, EXCEPT

3.28.1. increasing death benefit

3.29. The principal legal document regulating Income Tax in Malaysia is

3.29.1. Income Tax Act, 1967

3.30. Which of the following is most suitable to describe this concept?

3.30.1. “If a considerably large number of lives are insured, the fluctuation in the rate of death from year to year, under normal circumstances will not be very significant.”

3.30.1.1. law of large number

3.31. Which of the following statements regarding level premium is TRUE?

3.31.1. for an initial period, level premiums are in excess of yearly renewable premiums

3.32. Which of the following is/are the initial expenses of life insurance?

3.32.1. claim expenses

3.33. Gross Premium =

3.33.1. net premium + loading for expenses + loading for profits

3.34. The purpose of an actuarial valuation is

3.34.1. In the event of death occurring before all the premium payments for that particular policy year have been paid, the remaining installments of that year are deducted from the claim amount payable under the policy. This type of periodical premium is called

3.34.1.1. installment premiums

3.34.2. to test the solvency of a company

3.35. What is cost price?

3.35.1. price at which the asset was acquired.

3.36. Surplus is the difference between

3.36.1. the total assets and total liabilities

3.37. the total assets and total liabilities

3.37.1. the participating policyholders

3.37.2. the shareholders.

3.38. This is a method of passing on to the policyholders some of the benefits of the unrealized capital appreciation of ordinary shares and property holdings of the company. This type of surplus distribution is:

3.38.1. maturity bonus

3.39. This report gives specific answers to the insurance company’s queries relating to the treatment given to the applicant in the past. This report is referred to as

3.39.1. the attending physician statement

3.40. The following particulars are usually mentioned in the schedule, EXCEPT

3.40.1. date of commencement of insurance

3.40.2. date of proposa

3.40.3. name and address of the insurer

3.40.4. name and address of the life assured

3.41. Which of the following statements regarding endorsements is TRUE?

3.41.1. Endorsements can be done either time of issue or after issue of the policy

3.42. These details must be provided to the insurer upon a death claim, EXCEPT

3.42.1. The policy number

3.42.2. The date and cause of death

3.42.3. The policyholder's name and identity card number

3.42.4. the nominee’s name and identity card number

3.43. Which section of the Insurance Act, 1996 provides for the payment of claim proceeds to the proper claimant without letters of probate or administration?

3.43.1. Section 169

3.44. When the policyholder is not the life insured, which of the following is usually required in settling maturity claims?

3.44.1. a deed of assignment or any other title document

3.45. Using the rate book for premium calculations are applicable

3.45.1. only to standard lives

3.46. Mr. Tan was born on January 10, 1982 and he submitted a life insurance proposal on August 14, 2006. Based on age nearest birthday, what is his age?

3.46.1. 25

3.47. Which of the following statements regarding the statements of philosophy of the code of conduct is NOT TRUE?

3.47.1. The life insurance business is based on the philosophy of profit sharing

3.48. Below are the detriments of twisting, EXCEPT

3.48.1. The agent does not provide continuous service to the policyholder.

3.48.2. Any replacement of the same type policy will be at a higher premium rate

3.48.3. The suicide and incontestable clause will begin anew in a new policy.

3.48.4. The policyholder must commence again the qualifying period of 2 or 3 years before the policy can become eligible for surrender value and under the non-forfeiture system.

3.49. The first known cases of life insurance policy on the life of William Gybbon dated back to

3.49.1. 1583

3.50. Which of the following are the risks covered by life insurance policies?

3.50.1. POT

3.50.1.1. P

3.50.1.1.1. premature death

3.50.1.2. O

3.50.1.2.1. old age

3.50.1.3. T

3.50.1.3.1. total permanent disability

3.51. What is the disadvantage of a whole life assurance?

3.51.1. Premiums continue even in old age

3.51.1.1. when the ability to pay may be reduced by a reduction of income

3.52. Whole life insurance is suitable for a person with

3.52.1. reasonable death protection and saving element

3.53. Which of the following are the uses of endowment Insurance?

3.53.1. HICA

3.53.1.1. H

3.53.1.1.1. hedging against the possibility of untimely death

3.53.1.2. I

3.53.1.2.1. incentive to save in a systematic manner

3.53.1.3. C

3.53.1.3.1. convenient and easy means of providing for old age

3.53.1.4. A

3.53.1.4.1. accumulating a fund for specific purpose

3.54. The policy is generally affected by the parent on the life of a child. The premiums are generally paid by the parent till the child attains the specified vesting age and can earn an income of his own. This is referred to

3.54.1. Children’s deferred insurance

3.55. This annuity provides annuity payments as long as either of 2 or more persons lives. The annuity provides for payment until the last death among the covered lives. This annuity is called:

3.55.1. last survivor annuity

3.56. Most term insurance policies also include a convertible feature, that is, the privilege on the part of the insured to opt to convert the policy into a whole life or endowment insurance. Under the attained age method, the premium rate

3.56.1. is according to the

3.56.1.1. current age upon the conversion

3.57. What are the benefits of an ordinary whole life insurance?

3.57.1. PA CA LO NO

3.57.1.1. PA

3.57.1.1.1. paid up value

3.57.1.2. CA

3.57.1.2.1. cash surrender value

3.57.1.3. LO

3.57.1.3.1. loan value

3.57.1.4. NO

3.57.1.4.1. non-forfeiture regulations

3.58. main function of the PSA?

3.58.1. risk premium

3.59. This policy provides maximum protection and the sum insured of the policy is payable only on the event of death of the life insured within a stipulated term of the policy. This is a/an

3.59.1. term plan

3.60. Which of the following statements regarding group insurance is TRUE?

3.60.1. it provides coverage for a group of people under a master policy

3.61. A life insurance contract, which is written on two or more lives, is called A

3.61.1. a joint life insurance policy

3.62. Which of the following are some of the common exclusions under Personal Accident Benefit Cover?

3.62.1. Wa RI Dru

3.62.1.1. Wa

3.62.1.1.1. war

3.62.1.2. Ri

3.62.1.2.1. riot

3.62.1.3. Dru

3.62.1.3.1. drugs and alcoholism

3.63. This is an ordinary term insurance with the sum assured decreases in amount at periodical intervals. It is generally utilized to cover loans which are gradually being repaid. What type of insurance is this?

3.63.1. decreasing term insurance

3.64. The limited payment whole life policy may not be convenient to which of the following persons?

3.64.1. Those whose income is small and who are in need of a high insurance protection

3.65. A lapsed policy can be reinstated by providing which of the following information?

3.65.1. evidence of health

3.66. How many days after the premium due date does the insurer allow the policyholder to pay the premium?

3.66.1. 30

3.67. Most life insurance contents include provision which states if a person whose life insured dies by suicide within specified period,

3.67.1. the insurer will not pay the claim and premium paid will be refunded

3.68. Which of the following has no non-forfeiture provision?

3.68.1. whole life insurance

3.68.1.1. non forfeit means no surrender value

3.69. After the days of grace, a policy without cash value will be considered

3.69.1. lapse

3.70. The assured can exchange the acquired cash value for a paid-up term insurance for the full sum assured. This is called

3.70.1. extended term assurance

3.71. An insured has overweight problem. This may lead to extra risk that may cause

3.71.1. the increase level of mortality

3.72. Upon completing and signing of the whole life insurance application form, your prospect asks when the coverage will be commencing. You respond to the prospect shall be

3.72.1. when the insurer receives the first payment of premium

3.73. When the proposal is approved, _____ is issued by the insurer to the proposer requesting him to make the necessary payment of premium within a certain number of days.

3.73.1. a letter of acceptance

3.74. Commencement of the policy may be back dated to an earlier date, usually up to

3.74.1. 6 months

3.75. Which of the following are examples of physical hazard?

3.75.1. BAO

3.75.1.1. B

3.75.1.1.1. build

3.75.1.2. A

3.75.1.2.1. age

3.75.1.3. O

3.75.1.3.1. occupation

3.75.2. intention to defraud

3.76. Which of the following documents are used to gather underwriting information?

3.76.1. medical report

3.76.2. application form

3.76.3. credit card statement

3.77. What does the insurer use for premiums calculation purpose?

3.77.1. mortality table

3.78. What are the factors that an insurer considers before pricing the premium?

3.78.1. Time

3.78.1.1. T

3.78.1.1.1. taxes

3.78.1.2. I

3.78.1.2.1. investment returns

3.78.1.3. M

3.78.1.3.1. mortality

3.78.1.4. E

3.78.1.4.1. expenses

3.79. Basically, the balance of premium received, after deducting all expenses incurred, is used for what purpose?

3.79.1. for investment purpose

3.80. The expenses that a life insurance company incurs fall into which of the following categories?

3.80.1. In Re TE

3.80.1.1. In

3.80.1.1.1. initial expenses

3.80.1.2. Re

3.80.1.2.1. renewal expenses

3.80.1.3. Te

3.80.1.3.1. termination expenses

3.81. Which of the following statements regarding risk premium is TRUE?

3.81.1. the risk premium increases with the age of the insured.

3.82. The charge for covering the cost of mortality alone is called

3.82.1. the risk premium

3.83. Divisible surplus will be shared by

3.83.1. participating policyholders and shareholders

3.84. Which of the following are the main sources of surplus?

3.84.1. SEMI

3.84.1.1. S

3.84.1.1.1. surrenders

3.84.1.2. E

3.84.1.2.1. expense

3.84.1.3. M

3.84.1.3.1. mortality

3.84.1.4. I

3.84.1.4.1. interest

3.85. Liabilities =

3.85.1. the present value of the benefits payable + the present value of expenses - The present value of the future premiums receivable.

3.86. What is book value?

3.86.1. value placed on the assets in the company’s account books

3.87. Bonuses are normally declared at the valuation date for the policy year preceding that date i.e. in arrears. This type of surplus distribution is:

3.87.1. interim bonus

3.88. What information is provided in the agent’s report?

3.88.1. the agent’s impression about the applicant’s habits, appearance, findings and health condition

3.89. What is the information in the heading?

3.89.1. the name and address of the company

3.90. The standard policy documents are often endorsed to take into account the differing aspects of

3.90.1. individual circumstances and needs change

3.91. Information necessary for the proper assessment of risk is generally obtained from the proposal form, the medical report, attending physician’s statement, agent’s report and

3.91.1. previous records

3.92. The following can serve as proof of death, EXCEPT

3.92.1. verbal confirmation that death by last medical attendant D. certificate evidencing the death of service personal and war

3.92.2. Serve as proof of death

3.92.2.1. certificate showing that death has occurred at sea

3.92.2.2. an order pronouncing a statutory presumption of death

3.92.2.3. certificate evidencing the death of service personal and war death

3.93. What can be exercised with the maturity benefits of endowment policy?

3.93.1. Ca Co WI KE

3.93.1.1. Ca

3.93.1.1.1. cash maturity proceeds

3.93.1.2. Co

3.93.1.2.1. convert benefits to annuity options

3.93.1.3. Wi

3.93.1.3.1. withdraw in installment based on an agreed interest

3.93.1.4. Ke

3.93.1.4.1. keep as a deposit with the insurer on agreed term

3.94. When the policyholder is not the life insured, the document required in settling maturity claims is

3.94.1. a deed of assignment or any other title document

3.95. Your prospect is an accountant of a trading company. He intends to purchase a whole life policy. You were informed that he is non-smoker and he has just celebrated his 38th birthday 7 months ago. Under age next birthday calculation the premium for him is

3.95.1. 39 year old male rate with non-smoker discount

3.96. Mr. Lee was born on January 22, 1966 and he applies for a life insurance on July 28, 2006. Based on age nearest birthday, what is his age?

3.96.1. 41

3.97. An agent leaves Company A and joins Company B. He advises a customer to surrender or cancel existing policies and purchase a new policy from Company B. This is called

3.97.1. twisting

3.98. When explaining the contract, the intermediary shall

3.98.1. draw attention to any restrictions applying to the policy;

3.98.2. draw attention to the long term nature of the policy and the consequent effects of early discontinuance and surrender

3.98.3. explain all the essential provisions of the contract,

3.98.3.1. which he is recommending to ensure the prospect understands what he is committing himself to

4. PCE : Basic

4.1. Which of the following is one of the risk handling methods?

4.1.1. Risk retention

4.2. In contrast to life insurance, ________________ is not a very significant factor in underwriting medical and health insurance.

4.2.1. Family history

4.2.2. Important!

4.2.2.1. Physical condition

4.2.2.2. Insurable interest

4.2.2.3. Medical history

4.3. A voidable contract will remain valid until

4.3.1. The aggrieved party exercises the option to treat it void

4.4. Insurance is

4.4.1. PEL

4.4.1.1. P

4.4.1.1.1. pooling of risk

4.4.1.2. E

4.4.1.2.1. economic institution

4.4.1.3. L

4.4.1.3.1. loss sharing arrangement

4.5. The functions of insurance include the following

4.5.1. Stimulates business enterprise

4.5.2. Reduction of losses

4.5.3. Provides employment for many

4.5.4. Sources of capital for investment

4.6. Which of the following is NOT a characteristic of an insurable risk?

4.6.1. It must be a speculative risk

4.6.2. NAP

4.6.2.1. N

4.6.2.1.1. not be against public policy

4.6.2.2. A

4.6.2.2.1. accidental in nature

4.6.2.3. P

4.6.2.3.1. pure risk

4.7. Risk of property damage from earth quake, flood and typhoon is classified under

4.7.1. Fundamental risk

4.8. Which of the following describes the definition of risks?

4.8.1. An uncertainty regarding loss

4.9. essential elements of a contract

4.9.1. offer and acceptance

4.9.2. Consideration

4.9.3. Legality of object

4.9.4. Capacity to contract

4.10. In marine cargo insurance, insurable interest must exist

4.10.1. At the time of loss

4.11. The transfers of legal rights and obligations under a life insurance policy to another person is called

4.11.1. An assignment

4.12. What is the main statute law governing the life insurance business?

4.12.1. The Insurance Act 1996

4.13. The relationship of principal and agent may be terminated by

4.13.1. Mutual agreement

4.13.2. Death, lunacy or bankruptcy of the principal or agent

4.14. Which of the following statements is NOT true about void contracts?

4.14.1. Void contracts will remain valid until the aggrieved party exercises the option to treat them void

4.14.2. TRUE

4.14.2.1. Void contracts are not enforceable in a court of law

4.14.2.2. Void contracts are simply those which the law holds to be no contracts at all, a nullity from the beginning

4.14.2.3. They are totally invalid and are nothing more than mere agreements

4.15. An unenforceable contract usually arises because

4.15.1. Of the failure to comply with legal formalities

4.16. The legislation in Malaysia that regulates Islamic insurance is the

4.16.1. Takaful Act 1984

4.17. The Takaful Act 1984 is the source of Takaful legislation in Malaysia. The Act is divided into four parts, including the following:

4.17.1. MIA

4.17.1.1. M

4.17.1.1.1. mode and conduct of takaful business

4.17.1.2. I

4.17.1.2.1. interpretation, classification references to takaful business

4.17.1.3. A

4.17.1.3.1. administration and enforcement of matters such as indemnity, submission of annual reports and statistical returns etc

4.18. The person to whom the rights are transferred is called __________________; while the person who transfers the rights is called _________________.

4.18.1. Assignee; assignor

4.19. Agents can be classified into three categories:

4.19.1. Special agent

4.19.2. general agent

4.19.3. universal agent

4.20. The principle of indemnity states that

4.20.1. The insurer should restore the insured to the same financial position as before the loss

4.21. Which of the following is NOT true about a claim under the principle of subrogation?

4.21.1. In the absence of subrogation, the insured cannot get his claim

4.21.2. TRUE

4.21.2.1. In the presence of subrogation, the insured can either claim from the insurer or the negligent party

4.21.2.2. The principle of subrogation applies to prevent the insured from making profit out of his loss

4.22. This type of subrogation is considered as arising out of tort

4.23. Which of the following is NOT true about the insurance market?

4.23.1. A co-operative society is owned by shareholders and policyholders which may be termed as a mutual insurer

4.24. What do you understand when the organization of a company is said to be decentralized?

4.24.1. When underwriting, claims and servicing of the branch business are handled at the branches up to a pre-arranged limit

4.25. The Malaysia Insurance Institute was formed to

4.25.1. Promote insurance professionalism and to conduct professional insurance examination

4.26. The principle of ‘utmost good faith’ expect the parties

4.27. Assignment of policy can be effected without prior consent of the insurer under the following circumstances except

4.27.1. Aviation

4.27.2. To disclose all material facts of which they are aware of, even if no question is specifically asked

4.27.3. Will be affected!

4.27.3.1. MA Li Tra

4.27.3.1.1. Ma

4.27.3.1.2. Li

4.27.3.1.3. Tra

4.28. A life officer does not accept all applications for insurance automatically. They examine all risks carefully. The process of examining the risks is called

4.28.1. Selection

4.29. An illegal contract is one which

4.29.1. Is created for illegal purposes or is against public policy

4.30. A material fact is

4.30.1. A fact which will influence an underwriter in deciding the acceptance of the risk or the premium to be charged

4.31. Perils covered in the policy are known as

4.31.1. insured perils

4.32. The relationship between the insurer and the agent is normally that of

4.32.1. Principal and agent

4.33. What is the main purpose of the Inter-Company Agreements on General Insurance Business (ICAGIB)?

4.33.1. To regulate and control the conduct and activities of every person engaged in general insurance business

4.34. This involves the selection of segments of the market which have needs that can be met by the policies developed by the company. This function is known as

4.34.1. Market identification

4.35. _______________ is/are part of the insurance market components

4.35.1. HALR

4.35.1.1. H

4.35.1.1.1. Hospitals

4.35.1.2. A

4.35.1.2.1. Agents

4.35.1.3. L

4.35.1.3.1. Loss adjusters

4.35.1.4. R

4.35.1.4.1. Reinsurers

4.36. Insurable interest should be present in all life insurance contracts. Which of the following relationships does not create insurable interest?

4.36.1. Brother and sister

4.37. A life insurance contract is an aleatory contract. An aleatory contract is

4.37.1. A contract when one party provides something of value to another party in exchange for a promise that the other party will perform a stated act if a specified, uncertain event occurs

4.38. It is important for an agent to provide good after sales service because

4.38.1. It can enhance the agent’s business

4.38.2. A policy under which the surrender value is used as a single premium to provide for an assurance on the original terms, but for a reduced sum assured is known as

4.38.2.1. A paid-up policy

4.39. The incontestable clause in life insurance policies

4.39.1. Limits the period during which the insurance company can deny claims on the basis of statements made in the application

4.40. Policies that provide for an income during periods of sickness or disability on a long-term basis are known as

4.40.1. Permanent health insurance policies

4.41. The grace period is

4.41.1. A period of time after the premium due date during which a life policy remains in force without penalty even though the premium due has not been paid

4.42. The renewal underwriting of ___________________policy is limited to the rescission of the policy during the contestable period or the refusal to accept an application for reinstatement.

4.42.1. A guaranteed renewable

4.43. For married couples under combined assessment in the basis year, the total tax relief allowable for life insurance premiums and EPF contribution is

4.43.1. RM6,000

4.44. ______________ is one where the premium payment ceases on death and no deduction on the remaining premium is made from the claim payment.

4.44.1. True premium

4.45. ________ will usually result in the insurer paying something more than its interpretation of the facts would warrant and the claimant accepting payment for less than that claimed.

4.45.1. A compromise settlement

4.46. The following documents are generally acceptable as proof of age, except

4.46.1. Government school leaving certificate

4.46.2. Certified extract from Baptism Register

4.46.3. International passport

4.47. Which of the following describe endowment assurance?

4.47.1. DIP

4.47.1.1. D

4.47.1.1.1. decreasing term insurance

4.47.1.2. I

4.47.1.2.1. increasing investment component

4.47.1.3. P

4.47.1.3.1. pays cash to the policyholder at regular intervals

4.48. Which of the following does NOT describe mode of payment correctly?

4.48.1. Home service scheme operates in connection with industrial life insurance which usually provides coverage for the higher income group who can afford

4.48.2. Premium paid under modes other than yearly are slightly higher per year

4.48.3. Monthly premium is higher because more administrative work is involved in the collection

4.48.4. Payroll deduction scheme can only be applied after a written consent from the employee

4.49. When an insured fails to disclose a material fact intentionally, it is called

4.49.1. Concealment