Traditional Life
If a policyholder wants to get the maximum immediate value from his non-participating policy bu surrendering it, which of the following would he get? A. Cash value B. Loan value C. Extended term insurance D. Accumulated dividend
A. Cash value
Which of the following statements best describes the Automatic Premium Loan Provision? a. A provision whereby the company automatically pays the premium out of the loan value and charges it as a loan to the insured, if said premium due is not paid within the grace period b. A provision whereby one life insurance company will guarantee payment of the premium to another life insurance company c. A provision whereby a loan up to the amount of the annual premium is automatic d. A provision whereby the company lends the insured the amount of a premium to assure that the non-forfeiture options will be paid
a. A provision whereby the company automatically pays the premium out of the loan value and charges it as a loan to the insured, if said premium due is not paid within the grace period
Paul has recently retired and now wants to pass his present life insurance policy which is payable to his estate to his son who will assume the premium payments. Which of the following will he have to appoint his son to achieve his desire and protect him from Estate Tax Liability? a. Absolute Assignee b. Irrevocable primary beneficiary c. Revocable primary beneficiary d. Irrevocable secondary beneficiary
a. Absolute Assignee
Neal and his wife has a whole life and endowment policy respectively, that is why they are both assured that certain minimum policy benefits will remain with them even under certain changed conditions. Which non-forfeiture provision holds true with the given situation? a. Any guaranteed policy values will belong to the policy owner even if premium payments are discounted b. No death claim will be denied for any misstatement on the application c. The premium on the policy will remain the same even when another beneficiary is added to the policy d. The face amount of the policy will remain the same even if the insured's health becomes impaired
a. Any guaranteed policy values will belong to the policy owner even if premium payments are discounted
A client has a policy with you for Ps. 1,000,000 which is payable to his estate and he tells you that he wants his wife to receive the money free from Estate Tax. You recommend that he a. Appoint an irrevocable beneficiary b. Take out a new policy with the bank as a third party c. Make an absolute assignment Make a collateral assignment
a. Appoint an irrevocable beneficiary
The information on a life insurance application relating to an applicant's birthday, occupation and avocation is used by the company primarily for the purpose of a. Appraising the risk b. Assigning the risk c. Determining the insurable interest d. Determining a suitable plan of insurance
a. Appraising the risk
Insurable interest must exist a. At the inception of the policy b. Throughout the premium paying period c. Until the maturity date of the policy d. For as long as the insurance policy remains in force
a. At the inception of the policy
When does an interpleader action come into play? a. Decide conflicting claims on the same insurance proceeds b. Determine if the cause of the insured's death was an excluded risk c. Recommend the best settlement options for the beneficiary if the interest on a policy loan is not paid at the policy anniversary of the insurance d. Resolve the question of insurable interest
a. Decide conflicting claims on the same insurance proceeds
All of the following statements about Group Insurance are true except: a. Each covered employee receives a policy b. A covered employee who terminates his employment continues to be covered for 31 days after termination date c. In a non-contributory plan, 100% of the group members must be included d. Most group policies pay dividends to employer
a. Each covered employee receives a policy
Disability benefits are not paid a. For self-inflected injuries b. If there is a loan against the policy c. If all policy dividends have been withdrawn d. If disability resulted from sickness only
a. For self-inflected injuries
Life insurance companies practice risk selection primarily to a. Guard against anti-selection b. Establish dividend rates on participating policies c. Determine policy reserve amount d. Gather and test mortality statistics
a. Guard against anti-selection
Harry made a policy loan to pay for the tuition fee of his children, but after a year, he was still not able to pay it. What will the insurance company do? a. Increase the present loan by the interest b. Demand full settlement of the loan c. Refuse to grant future additional loan Terminate the contract
a. Increase the present loan by the interest
If the interest on a policy loan is not paid at the policy anniversary the insurance company may a. Increase the present loan by the interest b. Terminate the contract c. Refuse to grant future additional loan d. Demand full settlement of the loan
a. Increase the present loan by the interest
Disregarding possible legal impediments, which option would you recommend if an endowment policyowner at age 65 tells you that he wants to provide his church with a monthly donation for as long as the church exists? a. Interest option b. Life annuity option c. Fixed income option d. Periodic annuity option
a. Interest option
In order for an assignment of a life insurance policy to be binding upon the company a. It must be made in writing and filed with the company b. It must be of the limited type c. The company must be satisfied that it is justified d. The company must certify to its validity
a. It must be made in writing and filed with the company
In a life insurance company, risk appraisal is necessary to a. Prevent any anti-selection b. Project dividend rates for participating policies c. Collate mortality statistics d. Calculate the mortality rate for a given policy
a. Prevent any anti-selection
In determining the number of people dying or living at a particular age within a given period, we use the principle of a. Probability b. Insurable interest c. Mortality table d. Risk sharing
a. Probability
A limited pay life policy provides a. Protection for the life of the policyholder with premiums payable for a limited term of years b. Low cost protection only for a limited term of years with no savings c. The highest level of savings for the insured within a specified term of years d. Protection with premiums payable for life and a low level of savings as an alternative to continued protection in old age.
a. Protection for the life of the policyholder with premiums payable for a limited term of years
One supplementary benefit offered is a payor's benefit which is intended to a. Provide waiver of premium benefit in the event of death or disability of the person paying the premium b. Provide for the returns of premiums to an adult payor in the event that a minor insured dies c. Assure that the adult payor will retain a vested interest in the policy when the insured reaches the age of majority d. Allow the insurance company to pay the policy's proceeds to the person who seems equitably entitled to the proceeds
a. Provide waiver of premium benefit in the event of death or disability of the person paying the premium
When the death benefit of a policy is restricted in amount during the early years of the policy this restriction is known as a. Rate adjustment b. An increasing death benefit c. A lien d. A subtractive clause
a. Rate adjustment
Life insurance applications usually carry large amount of information on which data? a. Relates to the insurability of the applicant b. Identifies the applicant c. Describe the desired benefits and mode of payment d. Describe the type of insurance applied for
a. Relates to the insurability of the applicant
In the case of renewable term insurance, the policy owner may a. Renew the coverage based on a higher premium b. Change the life insured at renewal date c. Renew providing the insurance company agrees to continue coverage d. Renew at the same premium for further period of years
a. Renew the coverage based on a higher premium
The basic coverage provided by the life insurance policies may be supplemented by a separate provision that provides coverage for accidental amounts or of a different nature. Collectively these provisions are known as a. Riders b. Deposit privileges c. Dividends d. Assignment
a. Riders
The extent of medical evidence required is determined by a. The age of the applicant and the proposed sum to be insured b. Occupation of the applicant c. Financial condition of the applicant Date of the last medical examination
a. The age of the applicant and the proposed sum to be insured
What policy permits the policyholder to vary the level of premiums, the sum insured and has its cash values dependent upon the investment performance and the level of premium paid? a. Universal life b. Participating whole life policy c. Participating endowment d. None of the above
a. Universal life
An individual at age 35 purchases a policy under which he will, in 20 years receive the face amount of the policy himself, if he is alive at that date. This policy is obviously a a. 20 pay life b. 20 year endowment c. 20 year term d. None of the above
b. 20 year endowment
Most binding receipts have the following provisions except: a. An acknowledgment of the receipt of the initial contractual premium b. A minimum amount of coverage c. The right of the company to terminate the initial coverage if the application is disapproved by the company d. There is a confirmation of payment
b. A minimum amount of coverage
A whole life policy with initial premium rate that applies to the first 5 years of the policy and a higher premium rate that applies to the remainder of the premium-payment period is known as a. An extended life policy b. A modified life policy c. An experience-premium policy d. A guaranteed renewable policy
b. A modified life policy
Which rider could greatly increase the total life coverage of a permanent basic policy? a. An accidental death benefit rider b. A supplemental term rider c. An interim term rider d. None of the above
b. A supplemental term rider
A prospect tells you that he wants to be insured for life at the least annual cost until he dies. What would you offer him? a. A 20 pay life policy b. A whole life policy c. A term policy d. Endowment policy
b. A whole life policy
A father has his present life insurance payable to his estate and because he has now retired he wants to pass the policy on to his son who will assume the premium payments. Which of the following will he have to appoint his son to achieve his desire and protect the son from Estate Tax Liability? a. Irrevocable primary beneficiary b. Absolute assignee c. Irrevocable secondary beneficiary d. Revocable primary beneficiary
b. Absolute assignee
1. Non-forfeiture provisions are included in whole life and endowment policies to assure the policy owner that certain minimum policy benefits shall remain with him even under certain changed conditions. Non-forfeiture values guarantee to the policy owner that a. No death claim will be denied for any misstatement on the application b. Any guaranteed policy values will belong to the policy owner even if premium payments are discounted c. The face amount of the policy will remain the same even if the insured's health becomes impaired d. The premium on the policy will remain the same even when another beneficiary is added to the policy
b. Any guaranteed policy values will belong to the policy owner even if premium payments are discounted
The savings element of permanent plans allow for the build-up of a. Dividends b. Cash value c. Maturity benefits d. Death benefits
b. Cash value
Because the renewal of a term life insurance policy presents an increased possibility of Anti-selection, it is customary for the insurance company to a. Require some evidence of insurability each time the policy is renewed b. Charge higher premium rates for term policies that are renewable than for those that are not renewable c. Restrict the policyowner's right to change the beneficiary of a renewable term policy Define insurable interest more strictly for term policies than for other policies
b. Charge higher premium rates for term policies that are renewable than for those that are not renewable
William bought a straight-premium whole life policy rather than a limited payment whole life policy. What could be the advantage of such purchase? a. Liberal risk selection procedures b. Concentration of premium payments during the period of highest earnings c. More rapid accumulation of cash values d. More insurance protection for the same annual premiums outlay
b. Concentration of premium payments during the period of highest earnings
The only instance when a life insurance contract is treated primarily as an indemnity agreement is when a a. A person insures the life of a friend b. Creditor insures the life of his debtor to protect himself c. Person insures the life of his or her spouse to protect against the loss of income earned by the spouse d. Person in a partnership insures the life of his partner to protect the firm against loss due to the death of that partner
b. Creditor insures the life of his debtor to protect himself
Group life insurance covers a. Death provided it is during working hours and in the place of employment b. Death of the employee regardless of cause except suicide during the first year (sometimes two years) c. Accidental death only d. Only death by heart attack, pneumonia or cancer
b. Death of the employee regardless of cause except suicide during the first year (sometimes two years)
In certain situations a company may file interpleader actions with a Court of Law. This remedy is used to a. Determine if the cause of the insured's death was an excluded risk b. Decide conflicting claims on the same insurance proceeds c. Resolve the question of insurable interest d. Recommend the best settlement options for the beneficiary. If the interest on a policy loan is not paid at the policy anniversary insurance.
b. Decide conflicting claims on the same insurance proceeds
A policy where an irrevocable beneficiary has been designated the insured, without the beneficiary's permission, can a. Avail of a non-forfeiture option b. Discontinue premium payments c. Borrow minimal cash loan d. Alter the dividend option now in effect
b. Discontinue premium payments
Helena owns a policy which is kept in force by paying the premiums on a semi-annual basis. If she elected the non-forfeiture option, this means she a. Chooses a mode of settlement for the life proceeds b. Discontinue premium payments for a whole life or endowment policy c. Converts a term policy to a whole life policy d. Renews a term policy
b. Discontinue premium payments for a whole life or endowment policy
Which statement is false when the new owner borrows on a policy? a. If a large loan is taken after the policy has been in force for some years, the interest cost may exceed the premium b. Dividend will be reduced by the amount of the current interest c. The policy will lapse if, after reasonable notice the indebtedness exceeds the cash value d. The proceeds of the policy will be reduced by the amount of unpaid loan plus interest, if insured dies.
b. Dividend will be reduced by the amount of the current interest
How does the law of probability help life insurance companies? a. Predict when an individual insured will die b. Estimate future death rates among members of a given group c. Determine the experienced death rate among the insured persons d. Develop statistics of past deaths among the general population
b. Estimate future death rates among members of a given group
Life insurance guarantees cash benefits for all the following except a. Clean-up fund b. Family dependency period income c. Educational fund d. Mortgage
b. Family dependency period income
What source of information will an insurance company not consider from a client pertaining to insurability? a. Medical examination report b. Government tax records c. Agent's inspection report d. The applicant's personal appearance
b. Government tax records
In order for life insurance premiums to be waived under a typical waiver of premium for disability clause, the disability of the insured person must be total and the disability must a. Be expected to continue until death b. Have continued for a specified period, such as six months c. Have been caused by illness of a chronic nature, not accident d. Have been caused by accident, not by illness of a chronic nature
b. Have continued for a specified period, such as six months
In personal accident and/or sickness contracts, "blanket policies" refer to a. Group insurance covering loss from specific hazards, incidental to or related to particular activities b. Insurance covering all hazards c. Insurance for all types of hospital and health care expenses d. None of the above
b. Insurance covering all hazards
The widow of your policyholder tells that she does not want a lump sum payment, but she would like to receive monthly allowance for the rest of her natural life. Which option do you recommend? a. Periodic annuity option b. Life annuity option c. Fixed period option d. Fixed income option
b. Life annuity option
Applicants for life insurance with moderate physical impairment are called sub-standard risk and a. Therefore cannot obtain life insurance in any company b. May be insured at increased rates to compensate for the extra hazard c. Are issued policies without any non-forfeiture values d. Are required to pay premiums on an annual basis
b. May be insured at increased rates to compensate for the extra hazard
The Insurance Code specifies that a contract does not take effect unless a. The policy is delivered to an insured, his assignee, agent or beneficiary b. Payment of the first premium is made to the insurer or its authorized agent c. No change has taken place in the insurability of the life to be insured between the time the application was completed and the time the policy was delivered d. The insured has named in the policy no fewer than two beneficiaries
b. Payment of the first premium is made to the insurer or its authorized agent
In developing a life insurance policy, the company must accumulate from premium payments, a fund required to meet the contract obligations. This fund is called a. Dividend fund b. Policy reserve c. Accrued discount Contingency fund
b. Policy reserve
In life insurance, the term "substandard rates" generally is used to refer to a. Premiums charged for policies with low amounts b. Premiums charged to persons who are considered to be higher-than-average risk categories c. Mortality rates that are lower than the rates suggested by the regulatory authorities d. Mortality rates that are lower than those expected by the company according to its mortality table
b. Premiums charged to persons who are considered to be higher-than-average risk categories
A yearly renewable term life insurance policy generally specifies that a. The policy owner may renew the policy only once b. Premiums shall increase every time the policy is renewed c. Evidence of insurability shall be required every renewal d. Cash values will increase for as long as the policy is in force
b. Premiums shall increase every time the policy is renewed
The company will allow a policy change from a higher premium to a lower premium provided the insured. a. Buys a new plan altogether. b. Presents satisfactory evidence of insurability. c. Momentarily assigns the policy to the company. d. Obtains written consent from his or her spouse.
b. Presents satisfactory evidence of insurability.
The life insurance business relies on the following factors, except? a. The level of first year commission b. Pressure selling c. The use of effective needs selling d. Agent's service oriented attitude
b. Pressure selling
A family income rider is specifically designed to a. Pay twice the face amount of the policy in the event of death b. Provide a monthly income from the date of death of the insured to some future date specified in the contract c. Provide an income for the adjustment period immediately following death Provide a retirement income for the insured and his spouse
b. Provide a monthly income from the date of death of the insured to some future date specified in the contract
Participating life insurance policies are policies which a. Allow variation in the wording of certain provisions b. Provide for the distribution of dividends to the policyowner c. Develop profit which must be paid to stockholders d. Permit beneficiaries to exercise certain ownership rights during the lifetime of the insured
b. Provide for the distribution of dividends to the policyowner
Most life insurance agents are expressly authorized to perform the following functions: a. Solicit applications for insurance, accept the initial premium and issue a receipt on behalf of the insurance company b. Solicit and approve the application of the proposed insured c. Accept initial premium and waive the insurable interest requirement d. Appraise applicants and decide on a standard or sub-standard rating
b. Solicit and approve the application of the proposed insured
When Adrian bought a policy, he underwent an extensive medical analysis. What does this requirement determine? a. Occupation of the applicant b. The age of the applicant and the proposed sum to be insured c. Date of the last medical examination d. Financial condition of the applicant
b. The age of the applicant and the proposed sum to be insured
Simon named both of his parents as primary and secondary revocable beneficiary for Ps. 20,000 policy. Which applies to the situation? a. Upon the insured's death the primary and secondary beneficiaries shall each receive Ps. 10,000 b. The designation of a contingent beneficiary is subject to the primary beneficiary's approval c. Any policy loan assignment will require the primary beneficiary's signature d. The insured can add a third beneficiary at any time
b. The designation of a contingent beneficiary is subject to the primary beneficiary's approval
Mr. Lorenzo and his primary beneficiary die in a common accident. It is established that the primary beneficiary died ahead of Mr. Lorenzo and there are no contingent beneficiaries named. The proceeds of Mr. Lorenzo's life insurance policy will be paid to a. The estate of the primary beneficiary b. The estate of the insured c. Both the estates of the insured and the primary beneficiary on a 50/50 percent basis d. A court of law
b. The estate of the insured
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
b. The single sum of money which is equal in value to the discounted future payments
Daniel failed to disclose that he is already a high risk candidate for high blood pressure during the initial years of his policy. How will his contract be affected by such information? a. Void from the beginning b. Valid unless the insurer can prove fraud c. Valid if the insurer issues a policy which is delivered to the applicant d. Voidable by the insurer if it has been in force less than 2 years
b. Valid unless the insurer can prove fraud
A Retirement Annuity is a. An arrangement where a person can pay a life insurance company a sum of money in return for a pension for life b. A special kind of medical examination that has to be repeated every year c. A kind of regular annual savings arrangement to provide a pension for life with no life coverage d. A one-time payment for a pension to start at a predetermined date
c. A kind of regular annual savings arrangement to provide a pension for life with no life coverage
The total life coverage of a permanent basic policy can be greatly increased through the use of a. An accidental death benefit rider b. An interim term rider c. A supplemental term rider d. None of the above
c. A supplemental term rider
Paid-up additions option is one of the features available in a participating policy. Which of the following is TRUE about paid-up additions? a. Don't affect the cash value of the policy b. Don't affect the loan or cash value of the policy c. Affect both cash and loan value of the policy d. Only affect the cash value of the policy
c. Affect both cash and loan value of the policy
For waiver of premium to be effective a. Disability must be total b. Disability must be permanent c. Both A & B d. Either A or B
c. Both A & B
Mr. Barrio has been insured under the employee group life insurance plan for several years. If he leaves this job, Mr. Barrio's group life insurance will a. Be changed, upon the employer's notice to the insurance company, to a permanent plan of insurance for the same amount b. Continue to provide coverage of the same amount for a period of 31 days during which Mr. Barrio can convert to an individual policy c. Cover him for a reduced amount of paid-up term insurance until the end of the current policy year d. Coverage will stop at once
c. Cover him for a reduced amount of paid-up term insurance until the end of the current policy year
What happens to a policy when an irrevocable beneficiary has been designated the insured? a. Alter the dividend option now in effect b. Avail of a non-forfeiture option c. Discontinue premium payments d. Borrow minimal cash loan
c. Discontinue premium payments
Paid-up additions a. Affect both cash and loan value of the policy b. Don't affect the cash value of the policy c. Don't affect the loan or cash value of the policy d. Only affect the cash value of the policy
c. Don't affect the loan or cash value of the policy
Non-productive agents in a company affect a. Investment b. Risk sharing c. Expense d. Profit allowance
c. Expense
What are the basic settlement option? a. Policy loan, guaranteed insurability b. Cash surrender value, automatic premium loan c. Fixed amount, fixed period, life income, interest on deposit. d. Double indemnity, total and permanent disability waiver.
c. Fixed amount, fixed period, life income, interest on deposit.
The grace period provision in life insurance policies is designed to a. Compel the insured to pay premiums more promptly b. Permit the company to extra charges c. Give the insured more time to pay the premium while coverage remains in force d. Terminate the contract of insurance automatically
c. Give the insured more time to pay the premium while coverage remains in force
When the beneficiary of a life insurance policy has been designated irrevocable, the policyowner must obtain the consent of the beneficiary in order to I. Name a different person to receive policy benefits II. Obtain a loan under the policy III. Surrender the policy for it's cash value IV. Elects the extended term non-forfeiture option a. All of these b. I, III & IV c. I, II & III II, III, IV
c. I, II & III
Clark applied for a Ps. 20,000 whole life policy and paid the full initial premium to his agent, which then issued a binding receipt. Under such scenario, the insurance company a. Guarantees the policy will be issued as applied for b. Offers permanent insurance coverage effective as of the date of the application c. Immediately provides interim insurance that remains in effect until the policy is issued or the application is declined d. Promises that the insurance coverage will become effective as of the date of the application is approved
c. Immediately provides interim insurance that remains in effect until the policy is issued or the application is declined
What will happen if the insured fails to pay the interest on a policy loan during its policy anniversary? a. Terminate the contract b. Refuse to grant future additional loan c. Increase the present loan by the interest d. Demand full settlement of the loan
c. Increase the present loan by the interest
Notwithstanding various possible legal impediments, if the owner of an endowment at age 65 policy tells you that the maturity of the policy he wants to provide his church with a monthly donation for as long as the church exists. Which option do you recommend? a. Fixed income option b. Periodic annuity option c. Interest option d. Life annuity option
c. Interest option
The requirement that the beneficiary should have an insurable interest in the insured is satisfied if the insured a. And the beneficiary are engaged in a similar occupation b. Belongs to the same club as the beneficiary c. Is financially indebted to the beneficiary d. And the beneficiary regularly travel to and from work in a car pool arrangement
c. Is financially indebted to the beneficiary
A policy which affords coverage for two or more persons simultaneously with the face amount of the policy payable when any of the insured dies at which time the policy terminates automatically is known as a. Joint and Survivor Annuity b. Double Duty Pesos Insurance c. Joint Life Policy d. Split Pesos Insurance Plan
c. Joint Life Policy
A client tells you that his bank wants him to use his life insurance policy so that his bank loan will be paid off if he dies. You recommend that he a. Appoints an irrevocable beneficiary b. Makes an absolute assignment c. Makes a collateral assignment d. None of the above
c. Makes a collateral assignment
A risk is considered substandard based on any or all of the following criteria a. Death, income and educational attainment b. Death, occupation and moral character c. Occupation, character and family health history d. Income, educational attainment and occupation
c. Occupation, character and family health history
When belle purchased and a policy, her incontestability clause immediately became in full effect. What is the purpose of the clause? a. Permits the company to pay claims within 2 years b. Gives the company the right to rescind a policy at any time c. Prevents the company from denying a claim after the policy has been in force for 2 years d. Makes it necessary for the beneficiary to present proof of death in the event of a death claim
c. Prevents the company from denying a claim after the policy has been in force for 2 years
Nicole wants to enhance her existing policy by purchasing a separate provision that provides coverage for a different nature. What would you recommend her? a. Deposit privilege b. Dividends c. Riders d. Assignment
c. Riders
In life insurance, there is always "agency" relationship between the a. Beneficiary and the insurance company b. Insured and the insurance company c. Soliciting agent and insurance company Policyowner and the soliciting agent
c. Soliciting agent and insurance company
Some insurance companies charge females a lower premium rate than males. Which of the following justifies this practice? a. Women are less likely to lapse their policies b. Generally, women have less hazardous jobs c. Women have a longer life expectancy (after age 54) than men d. Generally, women buy the higher premium rate policies, such as an endowment policy or retirement income policy
c. Women have a longer life expectancy (after age 54) than men
A hazardous occupation could be defined as a. An occupation the duties of which expose the insured to a degree of sustaining injury b. An occupation in unhealthy working conditions exposing the insured to elements which can cause sickness c. An occupation which exposes the insured to social hazards d. All of the above
d. All of the above
Which of the following are requirements in reinstating a policy after it has lapsed for non-payment of premiums? a. Payment of all overdue premiums b. Application for reinstatement within the specified time c. Evidence of insurability and payment of interest on overdue premiums d. All of the above
d. All of the above
All of the following are Standard Provision of a life insurance policy except: a. A misstatement of age clause b. A grace period clause c. An automatic premium loan clause d. An entire contract clause
d. An entire contract clause
The following have a legitimate insurable interest except a. An individual on his own life b. An individual on the life of his spouse c. A finance company on the life of its borrower d. An individual on the life of his mistress
d. An individual on the life of his mistress
Which of the following statement is false a. The cash value of a whole life policy builds up at a slower rate than for a 20 year endowment b. The cash value in a permanent policy is guaranteed by the company c. The cash value of an endowment builds up faster than that for a limited pay life policy of the same duration d. Because of its very short duration the cash value of a yearly renewable term policy grows very fast
d. Because of its very short duration the cash value of a yearly renewable term policy grows very fast
Which of the following is not true regarding insurance premiums? a. The grace period is usually 31 days b. A premium is the legal consideration needed to effectuate a life insurance policy c. Premiums which are paid quarterly or semi-annually are higher than those paid annually d. Cash is required for all premiums paid in the grace period
d. Cash is required for all premiums paid in the grace period
In most cases, a policy loan which has not been repaid at the time of the insured's death will be a. Charged to the person responsible for paying the debts of the insured b. Collection from the life insurance company's reserve c. Written off against the insurance company under the terms of the premium loan repayment option d. Deducted from the proceeds of the policy when the death claim is paid
d. Deducted from the proceeds of the policy when the death claim is paid
A housewife without gainful employment applies for a P500,000 life coverage. Which of the following should the agent do? a. Suggest she doubles the amount b. Tell her she has no need for it c. Be grateful d. Examine the adequacy of the husband's insurance coverage
d. Examine the adequacy of the husband's insurance coverage
What provision in a permanent life insurance policy grants that even if premiums are discontinued, full insurance will be maintained for a specified period? a. Paid-up insurance additions b. Life income option pension c. Reduced paid-up insurance d. Extended term insurance
d. Extended term insurance
A man applied for a Ps. 20,000 whole life policy and paid the full initial premium to the soliciting agent. The agent issued a binding receipt. Under such receipt, the insurance company a. Offers permanent insurance coverage effective as of the date of the application b. Promises that the insurance coverage will become effective as of the date the application is approved c. Guarantees the policy will be issued as applied for d. Immediately provides interim insurance that remains in effect until the policy is issued or the application is declined
d. Immediately provides interim insurance that remains in effect until the policy is issued or the application is declined
If the interest on a policy loan is not paid at the policy anniversary, the insurance company may a. Demand full settlement of the loan b. Terminate the contract c. Refuse to grant future additional loan d. Increase the present loan by the interest
d. Increase the present loan by the interest
Which of the following is a settlement option a. Cash surrender value b. Extended term insurance option c. Policy loan d. Interest on insurance proceeds
d. Interest on insurance proceeds
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. It may be changed to a permanent insurance without evidence of insurability
A man is about to retire. He has Ps. 100,000 which he wishes to use to provide income for himself as long as he lives and which would continue to his wife as long as she lives after his death. You would sell him a. Retirement income endowment b. Straight life annuity c. Cash refund policy d. Joint and survivorship annuity
d. Joint and survivorship annuity
An agent is prohibited from doing all of the following practices except to a. Alter an application without the applicant's prior written approval b. Convince a prospect to cancel his policy in one insurance company to buy a policy from the insurance company represented by the agent c. Refund some of his commission to his client d. Make complete comparison of the policies he sells and those offered by competing insurance companies
d. Make complete comparison of the policies he sells and those offered by competing insurance companies
An insurance company which is owned and controlled by the policy owners who also share in the earnings of the insurance company in the form of dividends is known as a a. Stock company b. Foreign company c. Domestic company d. Mutual company
d. Mutual company
A prospect tells you that he wants the maximum possible provision for his retirement with no life coverage. Would you offer him a. Whole life policy b. A life paid-up at age 65 policy c. A 20 pay life policy d. None of the above
d. None of the above
Which of the following statement is correct? a. Orphan policyowners hardly need an agent's services b. Orphan policyowners will only deal with their original agents c. New agents should stay away from orphan policyowner d. Orphan policyowners are good sources of prospects and new sales
d. Orphan policyowners are good sources of prospects and new sales
In practice, most claims for the death benefits of life insurance policies are a. Investigated thoroughly for evidence of misrepresentation or fraud before payment is made b. Paid on the first policy anniversary after the death of the insured c. Settled by interpleader proceedings d. Paid promptly as soon as properly completed claim forms are received by the company
d. Paid promptly as soon as properly completed claim forms are received by the company
The legal consideration for the promise made by the insurance company in a life insurance contract is the a. Payment of renewal premium b. Approval by the underwriters c. Establish of the reserve d. Payment of the initial premium
d. Payment of the initial premium
"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 cannot provide for themselves
d. Period during which the children are small cannot provide for themselves
Jared wants to update his yearly renewable term life insurance policy. Which will apply to him? a. The policyowner may renew the policy only once b. Evidence of insurability shall be required every renewal c. Cash values will increase for as long as the policy is in force d. Premiums shall increase every time the policy is renewed
d. Premiums shall increase every time the policy is renewed
A life insurance agent is permitted to a. Approve an application for insurance b. Waive any of the requirements of the company c. Guarantee dividends on participating policies d. Prepare routine proposals for life insurance coverage
d. Prepare routine proposals for life insurance coverage
Margaux is the beneficiary of her dad's insurance policy, when it was already time to make a claim, she realized that she has different options to choose from. Which settlement options provision does not apply to her? a. Payment of the proceeds over a fixed period b. Payment of proceeds for the life of the insured c. Payment of the proceeds in fixed amounts until exhausted d. Proceeds held by the company with interest payable to the beneficiary on request
d. Proceeds held by the company with interest payable to the beneficiary on request
How are endowment life insurance and term life insurance the same? a. Build up cash value rapidly in the early policy years b. Provide for payment of the face amount if the insured is alive at the end of the specified period c. Contain provisions for automatic continuation of the insurance protection at the end of a specified period d. Provide life insurance protection for only the period of time specified in the policy contract
d. Provide life insurance protection for only the period of time specified in the policy contract
If Phoebe wants to continue her renewable term insurance, she may a. Change the life insured at renewal date b. Renew at the same premium for further period of years c. Renew providing the insurance company agrees to continue coverage d. Renew the coverage based on a higher premium
d. Renew the coverage based on a higher premium
Insurance provides protection against economic loss by enabling the policyowner 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 similar risk
d. Share the loss with others exposed to similar risk
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 rise through savings accumulated on an assessment basis d. Spread over a large number of people
d. Spread over a large number of people
All of the following statements regarding a life insurance application are correct except a. Misstatement of material facts could void the policy during the contestable period b. It must be signed by the applicant c. Usually, it will be made a part of the policy d. Statements made on the application are warranties
d. Statements made on the application are warranties
A living benefit in an insurance policy is a. The guaranteed insurability benefit b. The right to change beneficiaries c. The waiver of premium for disability d. The cash surrender value
d. The cash surrender value
At the end of 25 years, which statement is true for a 25-pay life policy and is not a 25-year endowment a. No further premiums are paid b. The contract is terminated c. The sum insured is paid d. The insurance remains in-force
d. The insurance remains in-force
Which of the following is false? a. When an agent makes a sales presentation, he has to sell confidence in the product b. When an agent meets a prospect for the first time, he has to sell confidence in himself c. The primary job of an agent is to get people happily involved with the ownership of his policy d. The job of an agent is to squeeze as much money as possible out of making a new sale.
d. The job of an agent is to squeeze as much money as possible out of making a new sale.
In the event that a policy owner elects the paid-up insurance option a. The premium stop and the policy continues for the full face amount until age 65 b. The insurance continues at a reduced amount and with a reduced premium. c. The policy will automatically terminate. d. The premium cease and protection continues with a reduced amount of coverage.
d. The premium cease and protection continues with a reduced amount of coverage.
Which correct selling approach does an agent do if he is able to determine a prospect's complete financial requirement before offering a policy? a. Planned selling b. Counselor selling c. Multiple product selling d. Total needs selling
d. Total needs selling
An applicant wants to get a participating policy which will have the maximum cash available for emergencies. Which of the following should he select? a. Accumulated dividends b. Extended term insurance c. Loan value d. Paid-up addition
a. Accumulated dividends
Which of the following does not have a legitimate insurable interest? a. An individual on the life of his mistress b. An individual on his own life c. An individual on the life of his spouse d. A finance company on the life of its borrower
a. An individual on the life of his mistress
Which of the following statements regarding insurance premiums is false? a. Cash is required for all premiums paid in the grace period b. A premium is the legal consideration needed to effectuate a life insurance policy c. The grace period is usually 31 days d. Premiums which are paid quarterly or semi-annually are higher than those paid annually
a. Cash is required for all premiums paid in the grace period
Life insurance policy loans are limited to an amount which with interest will not exceed the a. Cash value of the policy b. Total premiums paid c. Net amount of risk d. Present value of future premiums
a. Cash value of the policy
An insurance company generally has the right to rescind a life insurance policy if a. Company discovers at any time that the policy owner was actually a minor at the time of application. b. Insured person intentionally kills himself during the suicide exclusion period specified in the policy. c. Insured person is killed in military action during the contestable period of the policy. d. Company discovers during the contestable period that the application contains a material statement.
a. Company discovers at any time that the policy owner was actually a minor at the time of application.
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 the insured persons
a. Estimate future death rates among members of a given group
Name the provisions in a permanent life insurance policy under which premiums are discontinued, full insurance will be maintained for a specified period: a. Extended term insurance b. Paid-up insurance additions c. Life income option pension d. Reduced paid-up insurance
a. Extended term insurance
Claire is considering either endowment or term life policies to purchase. What similarity do both policies share? a. Insurance protection will be limited to a specified period b. Renewal and conversion privileges are available c. No cash value is available to the policy owner during the term of the policy d. A benefit will be paid at the end of the period of coverage if the person is then alive
a. Insurance protection will be limited to a specified period
An applicant wants a participating policy where the death benefit will be maximized. Which of the following should he choose? a. Paid-up additions b. Accumulated dividend c. Extended term d. Paid-up insurance (reduced insurance)
a. Paid-up additions
A pure endowment policy a. Pays proceeds to the insured only if he lives to the end of a specified period b. Pays proceeds to the insured if he lives to the end of endowment period, or pays the face amount to the named beneficiary if the insured dies before the end of the endowment period c. It is actually a combination of endowment insurance and term insurance d. None of the above
a. Pays proceeds to the insured only if he lives to the end of a specified period
Philip bought a policy on the life of his wife and was not able to clarify to the insurance company that his wife was a year older when they bought their life insurance policy. What will the insurance company pay in case his wife dies? a. The face amount adjusted for misstatement of age b. Slightly less than the face amount c. The sum of the premium paid d. The face amount
a. The face amount adjusted for misstatement of age
Gwen is thinking of electing her paid-up insurance option, what would happen to her policy if she does? a. The premium cease and protection continues with a reduced amount of coverage b. The premiums stop and the policy continues for the full face amount until age 65 c. The insurance continues at a reduced amount and with a reduced premium d. The policy will automatically terminate
a. The premium cease and protection continues with a reduced amount of coverage
Indicate which of the following is not a function of an application for life insurance policy. a. To give details pertaining to non-forfeiture options. b. To furnish information on which the contract of life insurance may be written. c. To furnish initial information as to insurability. d. To convey to the company the desire of the applicant to obtain insurance.
a. To give details pertaining to non-forfeiture options.
All of the following are sources of information to an insurance company pertaining to the insurability of an applicant except a. The applicant's personal appearance b. Medical examination report c. Agent's inspection report d. Government tax records
d. Government tax records
Under an endowment policy, if the person whose life is insured survives to the end of the period stated in the policy, the a. Policy will terminate without value b. Face amount of the policy be paid c. Policy will automatically be converted to paid-up whole life policy d. The extended term insurance option will into effect
b. Face amount of the policy be paid
If a policy owner wants to have a claim, what are his basic settlement options? a. Double indemnity, total and permanent disability waiver b. Fixed amount, fixed period, life income, interest on deposit c. Policy loan, guaranteed insurability d. Cash surrender value, automatic premium loan
b. Fixed amount, fixed period, life income, interest on deposit
The premium on a participating life insurance policy is a. The same as a non-participating policy b. Greater at younger ages c. Lower than a non-participating policy d. Higher than a non-participating policy
d. Higher than a non-participating policy
Mr. Sy walked out of his house one night and was never heard of again. His wife wanted to make a claim on his life insurance policy as she believes that he is dead. Which of the following statement is correct in this case? a. It would be four years before the court could declare him legally dead. b. It would be seven years before the court could declare him legally dead. c. The company would pay immediately. d. It would require 6 months before the court could declare him dead.
b. It would be seven years before the court could declare him legally dead.
In theory, endowment insurance is a combination of a. Level term and whole life b. Level term and pure endowment c. Increasing term and whole life insurance Increasing term and decreasing whole life
b. Level term and pure endowment
Limited payment life policies are called such because those policies a. Shorten the period when the benefits may be paid b. Limit the period during which the premiums are payable c. Limit the conditions under which the policies are payable d. Limit the number of beneficiaries thereby minimizing problems of paying too many people
b. Limit the period during which the premiums are payable
The consideration required by the life insurance company to make the insurance coverage effective is the a. Beneficiary's continuing insurable interest in the life of insured b. Payment of the initial premium c. Applicant's promise to act in good faith d. Payment of each renewal premium before the end of applicable period.
b. Payment of the initial premium
The basic purposes of a conditional premium receipt are to acknowledge payment of initial premium for life insurance and to a. Eliminate the need for acceptance of the offer in forming the contract b. Provide insurance coverage earlier than the policy delivery date if certain requirements are met c. Guarantee that a policy will be issued as applied for d. Backdate the policy to save age
b. Provide insurance coverage earlier than the policy delivery date if certain requirements are met
In a case where the premium has not been paid and the cash value has been exhausted, the policy can still avail of a. Automatic premium loan provision b. Reinstatement provision c. Extended term insurance d. Grace period
b. Reinstatement provision
A prospect tells you that he wants to be insured at age 65 but he does not want to pay more than the minimum possible level of premiums. Would you offer him a. Endowment policy b. Term policy c. Whole life policy d. A life at age 65 policy
b. Term policy
A misrepresentation in the application form is considered to be material if a. The insurance company would have altered its risk appraisal decision had the truth been known b. The Insurance Commission disregard the misrepresentation c. The insured died during the contestable period d. The misrepresentation is subsequently discovered by the insurance company
b. The Insurance Commission disregard the misrepresentation
All of the following apply under the beneficiary provision, except a. An irrevocable beneficiary's interest is very similar to that of an absolute assignee b. The beneficiary must notify the company of the insured's death within 24 hours c. The beneficiary can only receive the policy proceeds if he is alive at the time of the insured's death d. The interest of a contingent beneficiary remains inoperative during the lifetime of the insured
b. The beneficiary must notify the company of the insured's death within 24 hours
The insured named a primary and secondary revocable beneficiary for Ps. 20,000 policy. Which of the following is correct? a. The designation of a contingent beneficiary is subject to the primary beneficiary's approval b. The insured can add a third beneficiary at any time c. Any policy loan assignment will require the primary beneficiary's signature d. Upon the insured's death the primary and secondary beneficiaries shall each receive Ps. 10,000
b. The insured can add a third beneficiary at any time
Which of the following statements about "Disability Waiver of Premium Rider" is false? a. Disability must occur before a stated date b. The insured has to die while disabled c. There is a waiting period d. It has to be attached to a life insurance policy
b. The insured has to die while disabled
Insurable interest is necessary when a person insures another a. So that the person being insured may be properly appraised b. To establish that there is a genuine risk c. Because interest on premiums must be earned d. To make sure that he will pay the premiums
b. To establish that there is a genuine risk
An agent who determines a prospect's complete financial requirements preparatory to offering him a policy using the correct selling approach knows as a. Counselor selling b. Total needs selling c. Planned selling d. Multiple products selling
b. Total needs selling
Which of the following is not correct with respect to reinstatement process? a. Assumption or repayment of any indebtedness b. Written assurance of intent to keep the policy in force c. Payment of back premiums with interest d. An application for reinstatement
b. Written assurance of intent to keep the policy in force
The following statements concerning insurable interest are correct, except: a. It is deemed to exist if economic loss would occur at the death of the insured b. It is deemed to exist by virtue of a relationship by blood or by marriage c. It is important for purposes of underwriting the risk d. Everyone has an insurable interest in his own life
c. It is important for purposes of underwriting the risk
A client tells you that his bank wants him to use his life insurance policy so that his bank loan will be paid off if he dies. You recommend that he a. Appoint an irrevocable beneficiary b. Makes an absolute assignment c. Makes a collateral assignment d. None of the above
c. Makes a collateral assignment
Purchasing a continuous-premium, whole life policy rather than a limited payment, whole life policy gives the policy owner the advantage of a. Concentration of premium payments during the period of highest earnings b. Liberal risk selection procedures c. More insurance protection for the same annual premiums outlay d. More rapid accumulation of cash values
c. More insurance protection for the same annual premiums outlay
If a policyholder changes his occupation without notifying the company, might it affect the benefits under his policy? a. No, benefits and premiums may only be changed at the renewal date of the policy b. Yes, unless the policy specified otherwise, if he engaged in a more hazardous occupation, his benefits may be prorated c. No, benefits agreed upon at the inception of the policy may not be changed d. none of the above
c. No, benefits agreed upon at the inception of the policy may not be changed
The company usually allows a policy change from a higher premium to a lower premium if the insured a. Momentarily assign the policy to the company b. Buys a new plan altogether c. Presents satisfactory evidence of insurability d. Obtains written consent from his or her spouse
c. Presents satisfactory evidence of insurability
The conservation of a life insurance policy is dependent on all the following except a. The level of first year commission b. Agent's service oriented attitude c. Pressure selling d. The use of effective needs selling
c. Pressure selling
Endowment life insurance and term life insurance are similar in that both plans a. Build up cash value rapidly in the early policy years b. Provide for payment of the face amount if the insured is alive at the end of the specified period. c. Provide life insurance protection for only the period of time specified in the policy contract. d. Contain provisions for automatic continuation of the insurance protection at the end of a specified period.
c. Provide life insurance protection for only the period of time specified in the policy contract.
In most life insurance applications, the largest amount of information requested is data which a. Identifies the applicant b. Describes the type of insurance applied for c. Relates to the insurability of the applicant d. Describes the desired benefits and mode of payment
c. Relates to the insurability of the applicant
You visit a prospect who tells you that he does not believe in life insurance because when his mother died, he was beneficiary under her life policy and most of the money went to pay Estate Taxes because her agent made a mistake. Only this man and his sister were named in the policy. Which of the following did they fall under? a. Absolute guarantee b. Irrevocable primary beneficiary c. Revocable secondary beneficiary d. Revocable primary beneficiary
c. Revocable secondary beneficiary
When you bought an insurance policy on your wife's life, you were 27 and she was 26, but you stated that you were 26 and she was 27. Five years later your wife died. The insurer will pay a. Slightly less than the face amount b. The face amount c. The face amount adjusted for misstatement of age d. The sum of the premium paid
c. The face amount adjusted for misstatement of age
The following are applicable about "Disability Waiver of Premium Rider" except: a. There is a waiting period b. Disability must occur before a stated date c. The insured has to die while disabled d. It has to be attached to a life insurance policy
c. The insured has to die while disabled
Your client George wants to apply for a life insurance policy, as his advisor, you would advise him to do all of the following. Which one will you NOT advise him to do? a. To furnish initial information as to insurability b. To give details pertaining to non-forfeiture options c. To convey to the company the desire of the applicant to obtain insurance d. To furnish information on which the contract of life insurance may be written
c. To convey to the company the desire of the applicant to obtain insurance
A policy which permits the policyholder to vary the level of premiums, the sum insured and has its cash values dependent upon the investment performance and the level of premium paid is known as __________________ policy. a. Participating whole life policy b. Participating endowment c. Universal life d. None of the above
c. Universal life
The Insurance Commissioner has the power to revoke or refuse to renew an agent's license in all of the following instances, except: a. When applicant for license has intentionally withheld information concerning his conviction of a crime involving moral turpitude b. When the agent has diverted any premium collection for his personal use c. When an agent influences the applicant's choice of plan to be purchased d. none of the above
c. When an agent influences the applicant's choice of plan to be purchased
Which of the following statement is false? a. Too many lapsed policies can cause an agent's agreement to be cancelled b. When a policy lapses, the agent loses a valuable source of prospect c. When a policy lapses, the agent loses all future commissions on renewal premiums d. Agents with persistent business seldom stay long with one company
d. Agents with persistent business seldom stay long with one company
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 provisions for the future c. Accumulating capital for investment in commerce and industry d. All of the above
d. All of the above
In which circumstance does an insurance company has the right to rescind a policy? a. Insured person is killed in military action during the contestable period of the policy b. Insured person intentionally kills himself during the suicide exclusion period specified in the policy c. Company discovers during the contestable period that the application contains a material statement d. Company discovers at any time that the policy owner was actually a minor at the time of application
d. Company discovers at any time that the policy owner was actually a minor at the time of application
A non-forfeiture option would ordinarily be selected at the time a policy owner a. Renews a term life policy b. Converts a term policy to a whole life policy c. Chooses a mode of settlement for the life proceeds d. Discontinues premium payments for a whole life or endowment policy
d. Discontinues premium payments for a whole life or endowment policy
If premiums are being waived under a waiver of premium benefit and the insured dies, the proceeds will be the a. Reduced paid-up face amount b. Face amount less unpaid premiums c. Cash surrender value Face amount d. Face amount
d. Face amount
If the person whose life is insured dies during the grace period and the premium was not paid, the amount that the insurance company will pay to the beneficiary is usually the a. Cash surrender value of the policy minus the unpaid premium b. Full face amount of the policy c. Total premiums paid up to the date of birth plus interest d. Face amount of the policy minus the unpaid premium
d. Face amount of the policy minus the unpaid premium
Both endowment and term life policies provide that a. No cash value is available to the policy owner during the term of the policy. b. Renewal and conversion privileges are available. c. A benefit will be paid at the end of the period of coverage if the person is then alive. d. Insurance protection will be limited to a specific period.
d. Insurance protection will be limited to a specific period.
Your client tells you that when his father died, he received Ps. 500,000 free of Estate Tax and that he had not even known that this policy existed. Which of the following classifications did your client fall under? a. Collateral assignee b. Absolute assignee c. Revocable primary beneficiary d. Irrevocable primary beneficiary
d. Irrevocable primary beneficiary
The incontestability clause a. Gives the company the right to rescind a policy at any time b. Permits the company to pay claims within 2 years c. Makes it necessary for the beneficiary to present proof of death in the event of a death claim d. Prevents the company from denying a claim after the policy has been in force for 2 years
d. Prevents the company from denying a claim after the policy has been in force for 2 years
The settlement options provisions may provide all of the following except a. Payment of the proceeds for the life of the insured b. Payment of the proceeds over a fixed period c. Payments of the proceeds in fixed amounts until exhausted d. Proceeds held by the company, with interest payable to the beneficiary on request
d. Proceeds held by the company, with interest payable to the beneficiary on request
A whole life provides a. Protection for the life of the policyholder with premiums payable for a limited term of years b. Low cost protection only for a limited term of years with no savings c. The highest level of savings for the insured within a specified term of years d. Protection with premiums payable for life and low level of savings as an alternative to continued protection in old age
d. Protection with premiums payable for life and low level of savings as an alternative to continued protection in old age
Which of the following is the least important reason for requiring that insurance agents be licensed? a. To establish and maintain high professional and ethical standards. b. To protect the public c. To give the government adequate control over the conduct of agents. d. To provide additional income to the government through license fees
d. To provide additional income to the government through license fees
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 therefrom
d. Total value of the assets and any future earnings derived therefrom
If the applicant for life insurance fails to disclose or misrepresents material fact, the contract is a. Valid if the insurer issues a policy which is delivered to the applicant b. Void from the beginning c. Voidable by the insurer if it has been in force less than 2 years d. Valid unless the insurer can prove fraud
d. Valid unless the insurer can prove fraud
A businessman has arranged for a development loan which will be available 1 year from now. Because he is unable to wait until then he has arranged an interim loan with his bank. The only problem is that the bank wants loan secured against the risk of his death. What is the best economic arrangement that you recommend? a. Decreasing term b. Interim term c. Extended term d. Yearly renewable term
d. Yearly renewable term