Why is it important to use standard definitions for key policy terms & conditions in MHI policies?

To minimise public confusion and facilitate comparison between products.

When does a life insurance policy acquire a surrender value?

After three years of premium payment.

When can a life insurer assume a risk for life insurance?

On receipt of the first premium after a letter of acceptance is issued

Which of the following statements is NOT true about insurable interest in life insurance?

Insurable interest means payment of monies on the person's death/survival.

Which of the following statement is Not true about actual authority?

Authority that may appear to be apparent.

Who administers the Takaful and Insurance Benefits Protection System (TIPS)?

Malaysia Deposit Insurance Corporation (PIDM)

When an agent invites an individual to make an offer to enter into a contract of insurance, they shouldn't disclose

The benefit of taking up the offer with him

Which of the following does NOT make an insurance contract void?

Innocent misrepresentation at the time of filling up the proposal form.

Which of the following is NOT an underlying principal of the Code of Ethics for insurance agents?

To prevent transmission of information

What is the operative clause of an insurance policy?

The clause that describes / refers to the cover provided by the insurers.

Where the policy owner dies WITHOUT having made a nomination, the insurer shall pay the policy monies to the

lawful executor or administrator of the deceased's estate.

Why do insurance companies charge a loading for payment of bonus for participating policies?

To allow participating policyholders a share in the profits of the company.

Which of the following is NOT a risk covered by insurance?

Financial loss due to a drop in the share price.

For a life insurance policy to be valid, when must insurable interest exist?

At the inception of the policy only.

What is meant by a "composite insurance company"?

A company formed under the Companies Act

What is meant by a 'consumer insurance contract ' as defined under schedule 9 of the Financial Service Act 2013?

A Contract entered into by ones not related to trade, business/ profession.

The premium rates for group life insurance

are based on the experience rated using the average mortality rate.

What is the main purpose of the revised Guidelines on Medical and Health Insurance Business?

To prescribe minimum standards to be observed by life & general insurers.

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Part A and Part C

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Questions 35

Answers

1
Which of the following policies has no savings element in it?
Endowment
Whole life
Term
None of the above
2
Which of the following documents is a major source of informaiton for underwriting life insurance?
Financial report
Proposal form
Sales illustration
Agent's report
3
Why is it important to use standard definitions for key policy terms & conditions in MHI policies?
To unilaterally exclude pre-existing conditions from policies.
To enhance customer service and marketing of health products.
To promote competition in product pricing.
To minimise public confusion and facilitate comparison between products.
4
When does a life insurance policy acquire a surrender value?
On the third anniversary of premium due date.
Any time after policy inception.
After three years of premium payment.
Two years after policy inception.
5
When the assets of the life insurance fund exceed the liabilities, there is/are
A bonus
A surplus
Cash dividends.
Profits
6
When can a life insurer assume a risk for life insurance?
After the underwriter has assessed the information in the proposal form
On receipt of the first premium after a letter of acceptance is issued
On receipt of a completed proposal form
After the policy is issued and/or delivered to the policy owner
7
The expenses of running an insurance business can be categorized into three types EXCEPT
renewal expenses.
initial expenses.
procurement expenses.
termination expenses.
8
How much is the personal tax relief for the purchase of life insurance including contributions to EPF?
RM 3,000
RM6,000
RM 5,000
RM 4,000
9
Which of the following statements is NOT true about insurable interest in life insurance?
A life policy shall be void unless the person has insurable interest.
A person has insurable interest in his own life to an unlimited extent.
Insurable interest must exist at the inception of the life policy.
Insurable interest means payment of monies on the person's death/survival.
10
Which new legislation replaced the Insurance Act of 1996?
Financial Services Act 2013.
Financial Service Authority 2013.
Insurance Act 2013.
Islamic Financial Services Act 2013.
11
A retirement annuity is particularly attractive to someone who has
a large family
high longevity risk
low longevity risk
a severe illness
12
Which is NOT how the relationship between an insurer and an agent created is?
By statute
By agreement or consent
By necessity
By ratification
13
Which of the following statement is Not true about actual authority?
Actual authority may be exprss or implied.
Authority that may appear to be apparent.
Express actual authority may be oral or in writing.
Implied actual authority is also termed usual authority/customary authority
14
Which of the following best describes a life insurance contract?
Short term and renewable
Long term and renewable
Investment and saving plan
Long term and permanent
15
Who administers the Takaful and Insurance Benefits Protection System (TIPS)?
Malaysia Deposit Insurance Corporation (PIDM)
Insurance Companies and Takaful Operators.
Financial Consumer Protection.
Bank Negara Malaysia (BNM)
16
In the case of a missing person, what is the time lapse before a statutory presumption of death can be issued by a court
1 year
7 years
3 years
5 years
17
When an agent invites an individual to make an offer to enter into a contract of insurance, they shouldn't disclose
His relationship with the insurer
The benefit of taking up the offer with him
The name of the licensed insurer
The premium charged by the licensed insurer
18
Which of the following does NOT make an insurance contract void?
No insurable interest at the time of effecting the policy.
Innocent misrepresentation at the time of filling up the proposal form.
No consensus or a fundamental mistake or disagreement from the start.
Fraudulent misrepresentation at the time of filling up the proposal form.
19
Which of the following is Not a characteristic of an insurable risk?
Homogenous exposures with the same expectation of loss.
It must be a speculative risk.
It must be fortuitous / accidental in nature.
It should not be against public policy.
20
Which of the following does Not form an integral part of an insurance policy?
Proposal form
Schedule , Attestation
Exclusions and Conditions
Operative Clause
21
Which of the following is NOT an underlying principal of the Code of Ethics for insurance agents?
To avoid misuse of position
To ensure completeness and accuracy of relevant records
To avoid conflicts of interest
To prevent transmission of information
22
How is indemnity measured under property insurance policies?
On a reinstatement basis.
On a first loss basis.
According to a formula.
On agreed value basis.
23
Which of the following is NOT a benefit of insurance?
Investment of funds.
Peace of mind
Means of saving.
Speculative investment.
24
What is the operative clause of an insurance policy?
The clause that describes the risks excluded from the policy cover.
The operating clause that refers to the proposal, the parties & the premium
The clause that describes what the insured must do in the event of a claim.
The clause that describes / refers to the cover provided by the insurers.
25
Where the policy owner dies WITHOUT having made a nomination, the insurer shall pay the policy monies to the
policy owner's next of kin.
nominee.
lawful executor or administrator of the deceased's estate.
policy owner's spouse, child or parent.
26
Why do insurance companies charge a loading for payment of bonus for participating policies?
To pay bonus to employees and shareholders.
To increase the profits of the company.
To allow participating policyholders a share in the profits of the company.
To ensure adequate premium is charged for the risk.
27
Which of the following is NOT a risk covered by insurance?
Liability to consumers arising from the sale of products.
Death due to sickness / illness.
Damage to vehicle as a result of a chain collision.
Financial loss due to a drop in the share price.
28
For a life insurance policy to be valid, when must insurable interest exist?
At the inception of the policy OR at the time of a claim
At the time of a claim.
At the inception of the policy AND at the time of a claim.
At the inception of the policy only.
29
What is meant by a "composite insurance company"?
A company writing both life & general insurance business
A company that specializes in writing a single class of business
A company formed under the Companies Act
A company consisting of a head office & regional branches
30
What is meant by a 'consumer insurance contract ' as defined under schedule 9 of the Financial Service Act 2013?
Insurance policies bought by consumers in general.
A contract entered into by a consumer of life and general insurance.
An insurance contract entered into by a homeowner.
A Contract entered into by ones not related to trade, business/ profession.
31
Which of the following underwriting factors is NOT associated with physical hazard?
family medical history
lifestyle
earning capacity
height and weight
32
The premium rates for group life insurance
are based on the past claims experience of the group.
are based on the level premium system using mortality rate.
are based on the mortality rate using burning cost method.
are based on the experience rated using the average mortality rate.
33
What is the main purpose of the revised Guidelines on Medical and Health Insurance Business?
To reduce escalating claim costs.
To introduce new limitations on core benefits.
To prescribe minimum standards to be observed by life & general insurers.
To increase premium rates on higher-risk individuals.
34
Which of the following is NOT a Medical and Health Insurance Poduct?
Hospital and surgical insurance
Permanent disability income
Critical illness or dread disease insurance
Disability income insurance
35
Which one of the following has no insurable interest in the life of another?
Child dependant on a parent.
Legal guardian on a minor's life.
Employer on an employee's life.
Principal on an agent's life.

Part A and Part C Flashcards | StudBud