IC MOCK EXAM 1 & 2 LATEST 2023 GRADED A
c
Life insurance is
a. Only available to a specific group
b. A speculative risk
c. A cooperative risk-sharing plan
d. Paid-up insurance (reduced insurance)
d
The fundamental advantage of the use of life insurance as a means of meeting
economic losses is that through life insurance these losses are
a. Reduced for the group as a whole through the multiplier effect
b. Deferred for a specified period of time
c. Met as they arise through savings accumulated on an assessment bases
d. Spread over a large number of people
*A basic principle of insurance is sharing the financial consequences of events that are
unlikely to occur like death of a breadwinner. With life insurance, economic loss that
may be experienced by one individual can be shared with other people thus the concept
of risk sharing.
d
Insurance provides protection against economic loss by enabling the policy owner to
a. Transfer responsibility for the loss to others
b. Take speculative risk to compensate for the loss
c. Reduce the possibility of the occurrence of the event causing the loss
d. Share the loss with others exposed to a similar risk
*This refers to the concept of risk-sharing whereby a group of people pool funds and
resources together in preparation for life's many risks, notably death. It enables a group
of people, with the similar circumstances, to spread the risk to a large number of people
through cooperative risk-sharing.
d
A person's human economic value is defined as the
a. Total value of the individual's tax contribution to the national economy
b. Total value of his physical assets
c. The amount of capital required to replace family income needs
d. Total value of the assets and any future earnings derived there from
,*A person's human life value is a measure of what has been able to accumulate and
what he can reasonably expect to earn in the future.
d
"Critical years" in the programming of life insurance means
a. Retirement years
b. Years between the time the youngest child is 15 years old and the mother is 62 years
old
c. Years immediately following the insured's death
d. Period during which the children are small and cannot provide for themselves
b
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. under which one premium a month is required
*Single premium policy only requires one premium payment(lump sum).
b
The commuted value of an insurance policy is
a. The cash value of basic addition
b. The single sum of money which is equal in value to the discounted future payments
c. The cash value of the policy after the loan has been deducted
d. The paid-up value of the policy
a
Life insurance companies make use of the laws of probability in order to
a. Estimate future death rates among members of a given group
b. Predict when an individual insured will die
c. Develop statistics of past deaths among the general population
d. Determine the experienced death rate among insured persons
* The law of Probability is used to determine the average number of people of a
particular age who will live or die within a given period. For example, it predicts the
chances or possibility that a 40-year old person will still be alive after 20 years, or even
after 25 years.
d
Life insurance guarantees cash benefits for all of the following except
a. Clean-up fund
b. Family dependency period income
c. education fund
d. mortgage fund
d
, Life insurance contributes directly to the welfare and progress of the country by
a. Partially relieving the community of the care of dependents
b. Encouraging provision for the future
c. Accumulating capital for investment in commerce and industry
d. All of the above
c
A term policy provides:
a The highest level of savings for the insured within a specified term of years.
b Protection for the policyholder with premiums payable for a limited term of years.
c Low cost protection only for a limited term of years with no savings.
d Protection with premiums payable for life and a low level of savings as an alternative
to continued protection in old age.
c
A yearly renewable term life insurance policy generally specifies that
a. The policy owner may renew the policy only once
b. Evidence of insurability shall be required every renewal
c. Premiums shall increase every time the policy is renewed
d. Cash values will increase for as long as the policy is in force
*Premiums shall increase every time the policy is renewed to compensate with the
increase in age of the insured.
d
Which of the following describes the convertible feature of a term insurance policy?
a. It may be changed to another term insurance policy without evidence of insurability
b. It may be changed for a guaranteed sum
c. It may be changed to another whole life policy
d. It may be changed to a permanent insurance without evidence of insurability
d
A whole life policy provides:
a. The highest level of savings for the insured within a specified term of years.
b. Protection for the life of the policyholder with premiums payable for a limited term of
years.
c. Low cost protection only for a limited term of years with no savings.
d. Protection with premiums payable for life and a low level of savings as an alternative
to continued protection in old age.
b
A limited pay life policy provides:
a. The highest level of savings for the insured within a specified term of years.
b. Protection for the life of the policyholder with premiums payable for a limited term of
years.
c
Life insurance is
a. Only available to a specific group
b. A speculative risk
c. A cooperative risk-sharing plan
d. Paid-up insurance (reduced insurance)
d
The fundamental advantage of the use of life insurance as a means of meeting
economic losses is that through life insurance these losses are
a. Reduced for the group as a whole through the multiplier effect
b. Deferred for a specified period of time
c. Met as they arise through savings accumulated on an assessment bases
d. Spread over a large number of people
*A basic principle of insurance is sharing the financial consequences of events that are
unlikely to occur like death of a breadwinner. With life insurance, economic loss that
may be experienced by one individual can be shared with other people thus the concept
of risk sharing.
d
Insurance provides protection against economic loss by enabling the policy owner to
a. Transfer responsibility for the loss to others
b. Take speculative risk to compensate for the loss
c. Reduce the possibility of the occurrence of the event causing the loss
d. Share the loss with others exposed to a similar risk
*This refers to the concept of risk-sharing whereby a group of people pool funds and
resources together in preparation for life's many risks, notably death. It enables a group
of people, with the similar circumstances, to spread the risk to a large number of people
through cooperative risk-sharing.
d
A person's human economic value is defined as the
a. Total value of the individual's tax contribution to the national economy
b. Total value of his physical assets
c. The amount of capital required to replace family income needs
d. Total value of the assets and any future earnings derived there from
,*A person's human life value is a measure of what has been able to accumulate and
what he can reasonably expect to earn in the future.
d
"Critical years" in the programming of life insurance means
a. Retirement years
b. Years between the time the youngest child is 15 years old and the mother is 62 years
old
c. Years immediately following the insured's death
d. Period during which the children are small and cannot provide for themselves
b
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. under which one premium a month is required
*Single premium policy only requires one premium payment(lump sum).
b
The commuted value of an insurance policy is
a. The cash value of basic addition
b. The single sum of money which is equal in value to the discounted future payments
c. The cash value of the policy after the loan has been deducted
d. The paid-up value of the policy
a
Life insurance companies make use of the laws of probability in order to
a. Estimate future death rates among members of a given group
b. Predict when an individual insured will die
c. Develop statistics of past deaths among the general population
d. Determine the experienced death rate among insured persons
* The law of Probability is used to determine the average number of people of a
particular age who will live or die within a given period. For example, it predicts the
chances or possibility that a 40-year old person will still be alive after 20 years, or even
after 25 years.
d
Life insurance guarantees cash benefits for all of the following except
a. Clean-up fund
b. Family dependency period income
c. education fund
d. mortgage fund
d
, Life insurance contributes directly to the welfare and progress of the country by
a. Partially relieving the community of the care of dependents
b. Encouraging provision for the future
c. Accumulating capital for investment in commerce and industry
d. All of the above
c
A term policy provides:
a The highest level of savings for the insured within a specified term of years.
b Protection for the policyholder with premiums payable for a limited term of years.
c Low cost protection only for a limited term of years with no savings.
d Protection with premiums payable for life and a low level of savings as an alternative
to continued protection in old age.
c
A yearly renewable term life insurance policy generally specifies that
a. The policy owner may renew the policy only once
b. Evidence of insurability shall be required every renewal
c. Premiums shall increase every time the policy is renewed
d. Cash values will increase for as long as the policy is in force
*Premiums shall increase every time the policy is renewed to compensate with the
increase in age of the insured.
d
Which of the following describes the convertible feature of a term insurance policy?
a. It may be changed to another term insurance policy without evidence of insurability
b. It may be changed for a guaranteed sum
c. It may be changed to another whole life policy
d. It may be changed to a permanent insurance without evidence of insurability
d
A whole life policy provides:
a. The highest level of savings for the insured within a specified term of years.
b. Protection for the life of the policyholder with premiums payable for a limited term of
years.
c. Low cost protection only for a limited term of years with no savings.
d. Protection with premiums payable for life and a low level of savings as an alternative
to continued protection in old age.
b
A limited pay life policy provides:
a. The highest level of savings for the insured within a specified term of years.
b. Protection for the life of the policyholder with premiums payable for a limited term of
years.
