PCE Trial Exam 2 – Part A1 The Insurance industry in Malaysia is regulated by Insurance Act _____ .A. 1962B. 1965C. 1996D. 1997

2 The secondary functions of Insurance includeI. cost stabilizationII. reduction of lossesIII. provision of employment for manyIV. provision of sources of capital for InvestmentA. I,II,III onlyB. II,III,IV onlyC. I,III,IV onlyD. I,II,III,IV

3 Which of the following is NOT a function of insurance?A. reduction of losses- Secondary functionsB. It is a source of capital for investment- Other functionsC. It acts as a mind of gambling- Covering larger risks with small capital – Insurance assuages the businessmen from security investments. This is done by paying small amount of premium against larger risks and dubiety.D. It provides employment opportunities

4 Insurance business can be classified intoA. Life insurance and Speculative InsuranceB. Life insurance and General InsuranceC. General Insurance and Speculative InsuranceD. Guaranteed Insurance and Speculative Insurance

5 Which of the following is NOT a method of handling risks?A. risk retentionB. risk avoidanceC. loss controlD. identifying loss exposures

6 What is a risk?A. it is a cause of lossB. the possibility of dangerC. it is an uncertainty regarding loss.D. it is a condition that increases the chance of loss

7 Below are the steps of risk management, EXCEPTA. identificationB. evaluationC. avoidanceD. implementation

8 Which of the following is an insurable risk?Insurable risk would refer to the risks for which an insurance policy can be purchased. For all types of insurance other than life insurance, insurable risks must be financial, measurable and predictable. An insurable risk in general is a loss that is not intentionally caused by the insured.A. business venture riskB. investment venture lossC. loss in gamblingD. fire damage

9 Which of the following is not a pure risk?A category of risk in which loss is the only possible outcome; there is no beneficial result.A. protecting one’s house from fireB. protecting one’ car from being stolenC. protecting one’s investment from economic depressionD. protecting one’s loss of income risk and disability in an accident

10 Which of the following act is used to govern the operation of the Takaful companies?A. Contract Act 1950B. Company Act 1965C. Takaful Act 1984D. Insurance Act 1996

11 Perils covered in insurance policy are also known asA. insured perilsB. excluded perilsC. excepted perilsD. uninsured perils

12 In common law, when is the proposer (The person who proposes to enter into a contract of insurance with a life insurance company to insure himself or another life on whose life he has insurable interest. ) required to disclose material facts?A. during negotiationB. during claimC. after the enforcement of the policyD. before the policy lapse

13 Assignment isTransfer by the holder of a life insurance policy (the assignor) of the benefits or proceeds of the policy to a lender (the assignee), as a collateral for a loan. In the event of the death of the assignor, the assignee is paid first and the balance (if any) is paid to the policy's beneficiary. Other types of insurance policies may not be used for this purpose.A. a transfer of property to another personB. a transfer of rights to another personC. a transfer of rights to own selfD. a transfer of risk to another party

14 Lack of insurable interest willA. render the contract voidB. have no effect on the insurance contractC. render the insurance contract partly unenforceableD. render the contract voidable

15 Which of the following are methods of indemnifying?I. replacementII. reinstatementIII. cashA. I , II only C. II , III onlyB. I , III only D. I , II , III

16 The legal term ‘caveat emptor” meansA Latin phrase for "let the buyer beware." The term is primarily used in real property transactions. Essentially it proclaims that the buyer must perform their due diligence when purchasing an item or service.A. utmost good faithB. insurable interestC. consensus ad idemD. letting the buyer beware

17 When an insured fails to disclose a material, the breach of utmost good faith (in the insurance market, the doctrine of utmost good faith requires that the party seeking insurance discloses all relevant personal information) is termed as:A. twistingB. ratificationC. concealmentD. misrepresentation

18 Which of the following are insurance professionals?I. Underwriterinsurance underwriters evaluate the risk and exposures of potential clients. They decide how much coverage the client should receive, how much they should pay for it, or whether even to accept the risk and insure themII. Loss AdjusterIII. ActuaryA. I and II onlyB. I and III onlyC. II and III onlyD. I, II and III

19 Insurers who carry out both life and general business areA. the reinsurersB. the composite insurersC. the proprietary insurersD. mutual insurers

20 This department generally concentrates its efforts on identification of field officers, recruiting, motivating and supervising the sales force. This department refers toA. the marketing departmentB. the underwriting departmentC. the agency or sales departmentD. the customer service department

21 What is the basic advantage of centralization?A. teamwork is more effectiveB. uniformity in practice and standardsC. easy access to all departmental functionsD. control and maintenance of manpower

22 Which of the following insurance institution’s vision is to be the preferred insurance institute for human capital development and professional standards in insurance in Malaysia?A. Persatuan Insurans Am Malaysia (PIAM)B. The Actuarial Society of Malaysia ( ASM )C. The Malaysian Insurance Institute ( MII )D. National Association Of Malaysian Life Insurance and Financial Advisors ( NAMLIFA)

23 The main objective of this institution is to help settle disputes between policyholders and the financial service providers. This institution refers to:A. Financial Mediation Bureau ( FMB )B. Unplaced Motor PoolC. Motor Insurers’ Bureau ( MIB )D. Persatuan Insurans Am Malaysia (PIAM)

24 Which of the following are the advantages of self-regulation?I. It avoids the need to introduce legislation to regulate the industryII. It helps to instill discipline among insurance companiesIII. It is a bureaucratic backup to enforce laws that are passedIV. Its measures can respond to the changing needs faster than legislationA. I, II, III only C. I, III, IV onlyB. I, II, IV only D. I, II, III, IV

25 Under the provision of insurance act 1996, local life insurers are required to have a minimum paid up capital ofA. 30 millionB. 50 millionC. 100 millionD. 150 million

26 Which of the following are the basic rights of consumers?I. right to chooseII. right to consumer educationIII. right to basic goods and servicesIV. right to a safe and clean environmentA. I, II, III only C. I, III, IV onlyB. I, II, IV only D. I, II, III, IV

27 The principle requirements of the Companies Act affecting insurance companies areI. the method of valuing liabilitiesII. the method of valuing assets and the provision for the depreciationIII. preparation and submission of annual accounts and the accompanying statementsA. I, II onlyB. I, III onlyC. II, III onlyD. I, II, III

28 In insurance, for the applicant to have legal capacity to contract, he must be of age at leastA. 16B. 18C. 20D. 21

29 Which of the following are the essentials of an insurance contract?I. considerationII. consentIII. offer and acceptanceIV. intention to create a legal relationshipA. I, II onlyB. II, IIII onlyC. I, II, III onlyD. I, II, III, IV

30 If a proposer submits a completed and signed proposal form to an insurer, he is makingA. an offerB. an acceptanceC. a counter-offerD. an invitation to offer

31 An agent is a person who acts on behalf of another person. The person whom he represents is calledA. the brokerB. the principalC. the second partyD. the third party

32 An implied authority is authority that implies to the agent from the circumstancesconcerning the relationship betweenA. the principal and the agentB. the principal and the third partyC. the third party and the agentD. the recruiter and the agent

33 When an agent performs an act which is not within his actual authority, but which laterbecomes binding on the principal because the principal agrees to accept the act as having been done on his behalf. This is:A. ratificationB. usual authorityC. implied authorityD. apparent authority

34 Every agent is classified in accordance with the authority provided to them. A UniversalAgentA. has unlimited authority, appointed to do a specific act or transaction.B. has unlimited authority, may do anything for himself which himself is competent to doC. has unlimited authority, may do anything for his principle which the principal himself is competent to doD. has unlimited authority, may do anything for third party which the third party himself is competent to do

35 What is the agent’s most important right?A. receives commission or payment for the servicesB. receives premium and dividend for the servicesC. receives more policies for the servicesD. receives more customers or payment for the services

36 The relationship of the principal and agent may be terminatedI. by notice of revocation given to the principal to the agentII. by notice of renunciation given to the principal by the agentIII. by the completion of the transaction.IV. by expiration of the period stipulated.A. I, II, III onlyB. I, III, IV onlyC. II, III, IV onlyD. I, II, III, IV

37 A sales plan must include which of the following?I. sales goalII. objectivesIII. sales strategyIV. implementing and controlling the sales planA. I, II, III only C. I, III, IV onlyB. II, III, IV only D. I, II, III, IV

38 The customer buying decision process includes which of the following stages?I. information searchII. problem recognitionIII. post -purchase evaluationIV. sales interviewA. I, II, III only C. I, III, IV onlyB. II, III, IV only D. I, II, III, IV

39 The correct sequence of the selling process that involves 5 basic steps is:A. locating the prospective customer, closing the sales, creating a sales presentation, conducting the sales interview, handling objectionsB. creating a sales presentation, locating the prospective customer, conducting the sales interview, handling objections, closing the salesC. locating the prospective customer, handling objections, creating a sales presentation, conducting the sales interview, closing the salesD. locating the prospective customer, creating a sales presentation, conducting the sales interview, handling objections, closing the sales

40 The after sales service is important to an agent becauseI. the reputation of the insurer is enhancedII. it can minimize the chance of lapseIII. the client’s new needs for insurance coverage could be recognized and a sale quickly madeA. I, II onlyB. I, III onlyC. II, III onlyD. I, II, III

41 Through which department of an insurance company is medical and health insurance usually administered?A. Claim and Benefit DepartmentB. Human Resource and Training Development DepartmentC. Information Technology or Data Processing DepartmentD. Accident and health Department or Group Insurance Department

42 Which of the following are examples of benefit policies?I. critical illness insuranceII. disability income insurance.III. hospitalization cash benefit plansIV. hospitalisation and surgical insurance (known as medical card or health card)A. I, II and III C. I, III and IVB. I, II and IV D. II, III and IV

43 A supplemental major medical insurance cover is usually an extension to what type ofpolicy?A. a term insurance policyB. a critical illness insurance policyC. a hospitalization cash benefit insurance policyD. a basis hospitalisation and surgical insurance policy

44 Who can be covered under a group medical and health insurance?A. all members, regardless of sex or physical condition.B. all members, regardless of sex or mental condition.C. all eligible members, regardless of age or physical condition.D. all eligible members, regardless of age or mental condition.

45 In medical and health insurance risk, the underwriters consider the following in riskselectionI. medical factorsII. financial factorsIII. occupational factorsIV. age and sexA. I, II, III only C. I, II, IV onlyB. II, III, IV only D. I, II, III & IV

46 The tendency of extending the period of disability for the purpose receiving more insurance compensation is known asA. twistingB. rebatingC. anti-selectionD. malingering

47 The financial status of the applicant is a prime consideration in underwriting what type of medical and health insurance?A. Medical Expenses InsuranceB. Critical Illness InsuranceC. Disability Income InsuranceD. Hospital Cash Benefit Insurance

48 Which of the following groups are in the least hazardous occupation class?A. second hand car dealers or restaurant ownersB. electricians, plumbers and mechanicsC. construction workers and agricultural labourersD. persons with primarily executive or clerical duties

49 Which section of the scheduled policy form introduces or recites the parties in the contract: the insurer and the insured?A. PreambleB. The OperativeC. Attestation or Signature ClauseD. Exclusions

50 When a dispute arises, it may be resolved through which of the following channels?I. mediationII. arbitrationIII. litigationIV. negotiation and compromise settlementA. I, II, III onlyB. I, II, IV onlyC. II, III, IV onlyD. I, II, III , IV

PCE Trial Exam 2 – Part C101. The first known cases of life insurance policy on the life of William Gybbon dated back toA. 1583B. 1660C. 1700D. 1810

102. Which of the following are the risks covered by life insurance policies?I. premature deathII. total permanent disabilityIII. old ageA. I, II onlyB. I, III onlyC. II, III onlyD. I, II, III

103. What is the disadvantage of a whole life assurance?A. It is the most expensive form of permanent protectionB. Protection is only provided for the certain duration of lifeC. Premiums continue even in old age when the ability to pay may be reduced by a reduction of incomeD. The sum assured including any accrued bonuses, becomes payable only upon the death of the life insured

104. Whole life insurance is suitable for a person withA. maximum death protection, minimum savingB. maximum saving, minimum death protectionC. reasonable death protection and saving elementD. reasonable death protection with lump sum money payable in interval years

105. Which of the following are the uses of endowment Insurance?I. It is an incentive to save in a systematic mannerII. It is a means of hedging against the possibility of untimely deathIII. It is a means of accumulating a fund for specific purposeIV. It is a convenient and easy means of providing for old ageA. I , II , III onlyB. I , III , I V onlyC. II , III , IV onlyD. I , II , III , IV

106. 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 toA. Children’s term insuranceB. Children’s joint life insuranceC. Children’s deferred insuranceD. Protected educational policies

107. 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:A. guaranteed immediate annuityB. joint life annuityC. last survivor annuityD. single life immediate annuity

108. 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 rateA. is according to the adjusted premium rateB. is according to the original ageC. is according to the current age upon the conversionD. is according to the average premium upon the conversion

109. What are the benefits of an ordinary whole life insurance?I. loan valueII. paid up valueIII. cash surrender valueIV. non-forfeiture regulationsA. I , II , III onlyB. I , III , IV onlyC. II , III , IV onlyD. I , II , III , IV

110. What is the main function of the PSA?A. risk premiumB. saving onlyC. investment onlyD. saving and investment

111. 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/anA. whole life planB. term planC. endowment (Savings and Insurance)D. participating plan

112. Which of the following statements regarding group insurance is TRUE?A. group insurance is a whole life policyB. if one of the insured member dies, the sum assured will be paid to the other membersC. it is a contract between the insurance company and a group of peopleD. it provides coverage for a group of people under a master policy

113. A life insurance contract, which is written on two or more lives, is calledA. a group life insurance policyB. a twin life insurance policyC. a joint life insurance policyD. a co-life insurance policy

114. Which of the following are some of the common exclusions under Personal AccidentBenefit Cover?I. warII. riotIII. drugs and alcoholismIV. air travel as a fare paying passengerA. I , II , III onlyB. I , III, IV onlyC. II , III , IV onlyD. I , II , III , IV

115. 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?A. increasing term insuranceB. level term insuranceC. decreasing term insuranceD. family income protection

116. The limited payment whole life policy may not be convenient to which of the following persons?A. Those who have the ability to pay a high premiumB. Those whose income is small and who are in need of a high insurance protectionC. Those whose income is high and who are in need of a high insurance protectionD. Those who want to pay up the premium during their working lifetime

117. A lapsed policy can be reinstated by providing which of the following information?A. evidence of healthB. evidence of trustC. evidence of liableD. ability to pay the premium

118. How many days after the premium due date does the insurer allow the policyholder to pay the premium?A. 15B. 30C. 45D. 60119. Most life insurance contents include provision which states if a person whose life insured dies by suicide within specified period,A. the insurer will pay the claim 2 years laterB. the insurer will not pay the claim and premium paid will be refundedC. the insurer will just ignore the matter and just pay the claimD. the insurer will not pay the claim and premium will not be refunded

120. Which of the following has no non-forfeiture provision?A. term insuranceB. whole life insuranceC. endowment insuranceD. anticipated endowment

121. After the days of grace, a policy without cash value will be consideredA. lapseB. testingC. an extensionD. temporary stopped

122. The assured can exchange the acquired cash value for a paid-up term insurance for the full sum assured. This is calledA. paid-up policyB. automatic premium loanC. extended term assuranceD. extended whole life assurance

123. An insured has overweight problem. This may lead to extra risk that may causeA. extra level of mortalityB. the increase level of mortalityC. the decrease level of mortalityD. level of extra morbidity

124. 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 beA. when the life insurer issues the policyB. when the life insurer issues the letter of acceptanceC. when the insurer receives the first payment of premiumD. when the life insurer receives the duly completed application form

125. 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.A. a letter of acceptanceB. a proposal formC. an inform letterD. a surrender letter

126. Commencement of the policy may be back dated to an earlier date, usually up toA. 30 daysB. 3 monthsC. 6 monthsD. 12 months

127. Which of the following are examples of physical hazard?I. ageII. buildIII. occupationIV. intention to defraudA. I, II, IIIB. I, III, IVC. II, III, IVD. I II, III, IV

128. Which of the following documents are used to gather underwriting information?I. application formII. medical reportIII. credit card statementA. I ,II onlyB. I, III onlyC. II, III onlyD. I, II, III

129. What does the insurer use for premiums calculation purpose?A. premium tableB. mortality tableC. future value tableD. current value table

130. What are the factors that an insurer considers before pricing the premium?I. expensesII. taxesIII. mortalityIV. investment returnsA. I , II , III onlyB. I , III , IV onlyC. II , III , IV onlyD. I , II , III , IV

131. Basically, the balance of premium received, after deducting all expenses incurred, is used for what purpose?A. for investment purposeB. for charities purposeC. for paid-up capital purposeD. for reserve fund purpose

132. The expenses that a life insurance company incurs fall into which of the following categories?I. initial expensesII. renewal expensesIII. termination expensesA. I , II ,onlyB. I , III onlyC. II , III onlyD. I , II , III

133. Which of the following statements regarding risk premium is TRUE?A. the risk premium increases with the age of the insured.B. the risk premium decreases with the age of the insured.C. the risk premium increases with the increases of taxesD. the risk premium decreases with the growth of profit

134. The charge for covering the cost of mortality alone is calledA. the net premiumB. the gross premiumC. the risk premiumD. extra premium

135. Divisible surplus will be shared byA. all policyholders onlyB. share holders onlyC. participating policyholders and shareholdersD. policyholders and preferred shareholders

136. Which of the following are the main sources of surplus?I. expenseII. surrendersIII. interestIV. mortalityA. I, II, III only C. II, III, IV onlyB. I, II, IV only D. I, II, III, IV

137. Liabilities =A. the present value of the benefits payable + the present value of expenses + The present valueof the future premiums receivable.B. the present value of the benefits payable - the present value of expenses - The present valueof the future premiums receivable.C. the present value of the benefits payable + the present value of expenses - The present valueof the future premiums receivable.D. the present value of the benefits payable - the present value of expenses + The present valueof the future premiums receivable.

138. What is book value?A. price at which the asset is acquired.B. value for which the assets can be sold in the open-market.C. depreciated value after the valuationD. value placed on the assets in the company’s account books

139. Bonuses are normally declared at the valuation date for the policy year preceding thatdate i.e. in arrears. This type of surplus distribution is:A. terminal bonusB. interim bonusC. simple reversionary bonusD. compound reversionary bonus

140. What information is provided in the agent’s report?A. the agent’s impression about the applicant’s habits, appearance, character and healthconditionB. the agent’s impression about the applicant’s habits, appearance, findings and health conditionC. the agent’s impression about the applicant’s habits, conduct, character and financial statusD. the agent’s impression about the applicant’s habits, appearance, character and financial status

141. What is the information in the heading?A. the name and nature of business of the companyB. the name and address of the companyC. the assets and nature of business of the companyD. the assets and address of the company

142. The standard policy documents are often endorsed to take into account the differing aspects ofA. individual circumstances and needs changeB. policy condition and clauses changeC. insurer circumstances and needs changeD. product features and benefits change

143. 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 andA. coroner’s reportB. premium receiptC. previous recordsD. loss adjuster’s report

144. The following can serve as proof of death, EXCEPTA. certificate showing that death has occurred at seaB. an order pronouncing a statutory presumption of deathC. verbal confirmation that death by last medical attendantD. certificate evidencing the death of service personal and war death

145. What can be exercised with the maturity benefits of endowment policy?I. cash maturity proceedsII. convert benefits to annuity optionsIII. withdraw in installment based on an agreed interestIV. keep as a deposit with the insurer on agreed termsA. I, II ,III only C. I, III, IV onlyB. I, II, IV only D. I, II, III, IV

146. When the policyholder is not the life insured, the document required in settling maturity claims isA. a simple statement that the insured is deathB. a deed of assignment or any other title documentC. identity card of the life insuredD. identity card of the policy owner

147. 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 isA. 38 year old male rateB. 39 year old male rateC. 38 year old male rate with non-smoker discountD. 39 year old male rate with non-smoker discount

148. 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?A. 38B. 39C. 40D. 41

149. 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 calledA. twistingB. pinchingC. punchingD. rebating

150. When explaining the contract, the intermediary shallI. draw attention to any restrictions applying to the policy;II. draw attention to the long term nature of the policy and the consequent effects of earlydiscontinuance and surrender.III. explain all the essential provisions of the contract, which he is recommending to ensure theprospect understands what he is committing himself toA. I , II onlyB. I , III onlyC. II , III onlyD. I , II ,III

PCE Trial Exam 3 – Part A1 The objective of insurance is achieved by having the losses experienced by the unfortunate few compensated by the contributions of the many who are exposed toA. the same riskB. the lower riskC. the higher riskD. the different risk2 Which of the following is NOT the secondary function of Insurance?A. cost stabilizationB. capital guaranteeC. reduction of lossesD. to provide employment opportunities3 The earliest form of life insurance wasA. group insuranceB. whole life insuranceC. endowment insuranceD. short term insurance4 Which of the following is NOT the role of an insurance agent?A. bring financial relief in the event of property lossB. provide other forms of insurance related services to publicC. bring financial relief to aggrieved dependants of insured peopleD. inculcate the discipline of investment amongst the working population5 Hazard isA. a cause of lossB. a condition that increases the chance of lossC. a reduction/disappearance of economic valueD. a character defect in an individual that increases the chance of loss6 Pure risk exists whenA. there is the possibility of lossB. there is the possibility of profitC. there is the possibility of either loss or no lossD. there is the possibility of profit, loss or no loss7 Which of the following is NOT a method of handling risks?A. risk avoidanceB. loss controlC. risk sharingD. risk transfer8 Which of the following is NOT a characteristic of insurable risk?A. It must have financial valueB. It must be pure risks onlyC. It must be catastrophic lossesD. It must be a large number of similar risks9 Which of the following is NOT principle of insurance?A. insurable interestB. utmost good faithC. indemnityD. caveat emptor10 What makes insurance different from wagering?A. subrogationB. contributionC. insurable interestD. proximate cause

11 The transfer of rights and liabilities by one person to another is calledA. twistingB. reinstatementC. an assignmentD. a risk transfer12 At common law, the proposer is required to disclose material facts duringA. claimB. negotiationC. grace periodD. cooling off period13 Subrogation may arise in the following ways. EXCEPTA. arising out of tortB. arising out of contractC. arising out of statuteD. arising out of the condition14 The underlying concepts that drive the acceptance of the takaful system includesI. Piety or individual purificationII. Brotherhood via ta’awun or mutual assistanceIII. Charity through tabarru’ or donationIV. Self-sustaining operationsA. I , II. III onlyB. II. III, IV onlyC. I III, IV onlyD. I , II , III, IV15 Muslim jurists generally view that conventional insurance, which is based on exchangetransaction, does not conform to the rules and requirements of Syariah because of theinvolvement in which of the following elements?I. Al-Gharar – uncertainty in the contract of insuranceII. Al-Maisir – gambling as the consequence of the presence of uncertaintyIII. Al-Riba – the existence of interest or usury in its investment activitiesA. I , II only C. II , III onlyB. I , III only D. I , II , III16 A family takaful plan is a combination ofA. short-term investment and a risk transfer schemeB. short-term investment and a mutual financial assistance schemeC. long-term investment and a risk transfer schemeD. long-term investment and a mutual financial assistance scheme17 Intermediaries or middlemen in the insurance market areA. brokers and reinsurerB. loss adjusters and brokersC. insurance agents and brokersD. insurance agents and reinsurer18 Penalty for breach of Section 186 isA. RM 0.5 millionB. RM 1 millionC. RM 2 millionD. RM 3 million19 Brokers are remunerated through payment ofA. salaryB. dividendC. brokerageD. commission

20 An insurer or an individual skilled in the process of selecting risks for an insurance company is calledA. an actuaryB. an underwriterC. a loss assessorD. a loss adjusters21 The responsibility of the Chief Executive Officer isA. to develop new insurance productB. to formulate the overall plan of operation of the companyC. to implement the decisions which are made by the board of directorsD. to ensure that the company complies with company and insurance company law22 Which of the following is NOT the objective of LIAM?A. to promote public understanding and appreciation of life insuranceB. to improve the image of the life insurance industry through self regulationC. to give support to the regulatory authorities in developing a strong and healthy industryD. to enhance the professionalism of staff and agents through continuous selling high premiuminsurance product23 This organization is concerned with safeguarding the interests of those are engaged in life insurance selling and sales management. This organization isA. The Malaysian Insurance Institute (MII)B. The Malaysian Financial Planning Council (MFPC)C. The Malaysian Insurance and Takaful Brokers (MITBA)D. The National Association of Malaysian Life Insurance and Financial Advisors (NAMLIFA)24 Which of the following is NOT the core value of The Malaysian Insurance Institute (MII)?A. ResourcefulB. InnovativeC. CustomerD. Integrity25 The basic rights of consumers includeI. right to chooseII. right to consumer educationIII. right to basic goods and servicesIV. right to a safe and clean environmentA. I, II , III onlyB. I, III , IV onlyC. II, III, IV onlyD. I, II, III, IV26 The objectives of self regulation includeI. to instill discipline and promote healthy competitionII. to provide protection to the insurance consumerIII. to increase the profit of the insurance industryA. I onlyB. II onlyC. I ,II onlyD. I ,II , III27 The code of ethics and conducts of LIAM deals withA. life insurance selling and life insurance practiceB. life insurance profit sharing and life insurance practiceC. life insurance selling and life insurance profit sharingD. life insurance practice and life insurance twisting28 Which of the following is NOT the purpose of government regulation on insurance industry?A. foster competenceB. play a developmental roleC. promote fairness and equityD. protect the insurer’s interest

29 Which of the following is NOT the essential of an insurance contract?A. consentB. express authorityC. offer and acceptanceD. intention to create a legal relationship30 If a proposer submits a completed and signed proposal form to an insurer, he is makingA. an offerB. a ratificationC. an counter-offerD. an acceptance31 Section 153 of the Insurance Act 1996 provides that a minor can affect a life policy on his own life if he/she has attained the age ofA. 15B. 16C. 17D. 1832 A contract which has no consideration is aA. valid contractB. void contractC. voidable contractD. unenforceable contract33 When an agent carries on a particular trade on profession, his express and implied authority carry with themA. a ratificationB. apparent authorityC. an usual authorityD. unlimited authority34 The relationship of the principal and agent may be terminated by the following actions, exceptA. expiration of the period stipulated.B. the completion of the transaction.C. notice of revocation given to the principal to the agentD. notice of renunciation given to the principal by the policyholders35 Which of the following is/are the obligations of the principal?I. to pay remuneration and expenses as agreedII. to indemnify the agent against consequences of any act lawfully doneIII. to protect the agent against any legal actionA. I onlyB. II onlyC. I , II onlyD. I ,II, III36 No licensed general insurer shall assume any risk in respect of such description of general policy as may be prescribed unless and until the premium payable is received by the general insurer in such manner and within such time as may be prescribed. This is known asA. Cash Before Cover RegulationsB. Cash After Cover RegulationsC. Premium Waived ClauseD. Premium Warranty Clause37 The functions of the marketing department includeI. pricingII. promotionIII. market identificationIV. product developmentA. I, II onlyB. I, II, III only

C. II, III, IV onlyD. I, II. III. IV38 Which of the following is NOT the customer buying decision process?A. servicingB. problem recognitionC. information searchD. evaluation of alternative policies39 This technique is used when the customer is unaware of his/her needs. This sellingtechnique is referred to asA. creative sellingB. missionary sellingC. order processingD. objection handling sellingING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English4240 The vast majority of non-life policies renewal process will be for periods ofA. 3 monthsB. 6 monthsC. 9 monthsD. 12 months41 The duty of disclosure does not require the disclosure of a matter thatI. is of common knowledgeII. diminishes the risk to the licensed insurerIII. the licensed insurer knows or in the ordinary course of his business ought to knowIV. in respect of which the licensed insurer has waived any requirement for disclosureA. I , II, III onlyB. I, II, IV onlyC. II, III, IV onlyD. I, II , III, IV42 Which of the following is NOT an example of benefit policies?A. critical illness insuranceB. disability income insuranceC. hospitalisation and surgical insuranceD. hospitalization cash benefit plans43 The two common expense participation methods in major medical expenses insurance areA. cashless and deductibleB. cashless and co-paymentC. deductible and co-paymentD. cashless and top-up44 Contributory group medical and health insurance usually requires __________participation of the eligible members of the group.A. 50%B. 60%C. 75%D. 100%45 Morbidity rates vary considerably according toA. a person's educationB. a person's occupationC. a person's income levelD. a person's hobby46 The additional premium of premium loading usually ranges fromA. 25 to 100 percent of the standard premiumB. 50 to 100 percent of the standard premiumC. 75 to 150 percent of the standard premium

D. 100 to 150 percent of the standard premium47 A proposal form generally contains the following items, EXCEPTA. signatureB. declarationC. previous and present insuranceD. specific questions relating to general insurance48 Which section of the scheduled policy form specifies the perils insured under the policyand the circumstances in which the insurer will become responsible to make payment orits equivalent to the insured?A. HeadingB. ExclusionsC. The PreambleD. The Operative49 Insurance policies require the policyholder to inform the insurer in writing of any claimwithin a reasonable period. Such period, which is stipulated in the policy, is usuallyA. 14 days to 30 daysB. 30 days to 45 daysC. 45 days to 60 daysD. 60 days to 75 days50 Which of the following is NOT the condition for a valid claim?A. is the policy in force?B. has premium been paid?C. is the servicing agent still active?D. is the subject matter affected by the loss the same as that insured under the policy?PCE Trial Exam 3 – Part C101 In 1762 , the Equitable Society issued life insurance policies based on the followingprinciples, EXCEPTA. cover was available to anyone who satisfied the initial health requirementsB. once accepted for insurance, further proof of continuing good health was not neededC. increasing premiums were to be payable throughout the term of the contractD. extra premiums were chargeable for special occupational risks and sub-standard health risks102 Life insurance contracts are long- term contracts withA. variable premiumB. increasing premiumsC. decreasing premiumsD. usually level premiums103 The prerequisite for a life insurance contract is the existence ofA. insurable interestB. monetary interestC. utmost good faithD. subrogation104 Which policy incorporate the savings element as an essential feature and provide for thepayment of the sum assured and other additional benefits, if any, if the policyholderssurvive to the end of the term of the policies?A. AnnuitiesB. Endowment policiesC. Investment-Linked policiesD. Accident or sickness policies105 Which of the following is NOT the basic life insurance contracts?A. annuitiesB. whole lifeC. unit trustD. term insuranceING Sales Academy

PCE & CEILLI Self Study Pack v.3.0 English44106 Under a renewable term insurance, the policyholder is allowed an option, before theexpiry of the term to renew the policyA. with evidence of continued good healthB. with evidence of continued good health plus exclusionsC. without evidence of continued good healthD. without evidence of continued good health but with exclusions107 This is an ordinary term insurance with the sum assured decreases in amount atperiodical intervals. It is generally utilized to cover loans which are gradually beingrepaid. This isA. level annuitiesB. level term insuranceC. decreasing annuitiesD. decreasing term insurance108 The following statements regarding whole life assurance are correct, EXCEPTA. Protection is provided for the whole duration of lifeB. Sum assured including any accrued bonuses, becoming payable only upon the death of thelife assuredC. Is the purest form of a permanent contractD. Can only be issued with participating109 Which of the following is NOT the benefit of an ordinary whole life insurance?A. Loan valueB. Paid up valueC. Convertible featureD. Non-forfeiture regulations110 A whole-life endowment policy is a combination ofA. a whole life and an annuity contractB. a whole life and an endowment contractC. an investment contract and an term contractD. a whole life and an investment contract111 The endowment insurance can be viewed as a combination ofA. a decreasing term insurance and a decreasing investment componentB. a decreasing term insurance and an increasing investment componentC. a increasing term insurance and a decreasing investment componentD. a increasing term insurance and an increasing investment component112 The annuitant pays a lump sum at entry, or a periodical premium for a defined period. Onthe 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:A. joint life annuityB. deferred annuityC. last survivor annuityD. guaranteed immediate annuity113 It is not a life annuity. In return for the payment of a certain sum, known as the purchasemoney, the insurer makes a series of yearly, half-yearly or quarterly payments for aspecified number of years. This annuity is called:A. joint life annuityB. deferred annuityC. annuity certainD. guaranteed immediate annuityING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English45114 Permanent Health Insurance is usually arranged with a deferred period. A deferredperiod is during this period of disability

A. future premiums are waivedB. no benefits are payableC. the benefits are payableD. only 50% of the benefits are payable115 A basic critical illness plan provides a lump sum payment upon:I. loss of lifeII. total permanent disabilityIII. diagnosis of suffering from any one of the 36 types of dread diseasesA. III onlyB. I , III onlyC. II, III onlyD. I , II , III116 “Contracts of insurance on human life or annuities where the benefits are, wholly orpartly, to be determined by reference to the value of, or the income from, property of anydescription or by reference to fluctuations in, or in an index of, the value of property ofany description.” This is the description ofA. annuitiesB. endowment insurance policiesC. investment-linked insurance policiesD. whole life endowment insurance policies117 Permanent disability benefit is provided for, should the life insured becomes disabled,that at any future date, he will not be able to engage in any occupation or perform anywork for remuneration or profit before attainment of ageA. 60B. 65C. 70D. 75118 If the participant dies before the term of a takaful plan, the benefits payable will be equalto the amount ofA. death benefit defined by the plan onlyB. accumulated value of the participant’s PA onlyC. death benefit defined by the plan + accumulated value of the participant’s PAD. death benefit defined by the plan + accumulated value of the participant’s PSA119 The conditions in the policy can be broadly classified under the followings, EXCEPTA. privilegesB. those limiting the scope of assuranceC. those expanding the scope of assuranceD. those explaining the nature of the contract120 Policy loan generally grants up to _________ of cash valueA. 75%B. 85%C. 92%D. 100%ING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English46121 Which of the following is NOT a non-forfeiture condition?A. paid-up policyB. premium waivedC. automatic premium loanD. extended term assurance122 Reinstatement is normally NOT allowed for which the following situations?I. A policy which has lapsed for more than three years for whole life and endowment policies,and six months for term policiesII. A female life assured who is pregnant 8 months and above.

III. A life assured who has attained age 60 age and above next birthdayA. I onlyB. I , II onlyC. II, III onlyD. I , II , III123 The process of assignment can be carried out by the following procedures listed below,EXCEPTA. the assignment shall be in writingB. the assignment may be effected by an endorsement or a separate deedC. a written notice of the assignment must be served to the servicing agentD. upon receipt of an assignment notice, the insurer should register it124 Which of the following is NOT the major factor which influence mortality?A. geographical locationB. marital statusC. personal habitsD. education125 The purpose of selection isA. to avoid twistingB. to avoid anti-selectionC. to increase the insured rateD. to increase the sales126 The insurer usually employs which of the following methods to deal with sub-standardlives?I. charge an extra premiumII. charge a debt or a lien. e.g. reduce the amount payable in the event of deathIII. offer an alternate form of contractIV. decline or postpone coverageA. I , II, III onlyB. I, II, IV onlyC. II, III, IV onlyD. I , II , III, IV127 Extra risks are classified into the followings, EXCEPTA. level extra mortalityB. unusual extra mortalityC. increasing extra mortalityD. decreasing extra mortalityING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English47128 The allowable deduction for savings under the National Education Saving Scheme (SSPN)isA. RM 3,000B. RM 4,000C. RM 5,000D. RM 6,000129 Which of the following is NOT one of the expenses of a life insurance company?A. initial expensesB. investment expensesC. renewal expensesD. termination expenses130 When the charge is computed after taking into account the elements of mortality andinterest is calledA. the initial premiumB. the net premium

C. the risk premiumD. the total premium131 The disadvantages of a regular premium areI. more administrative workII. loss of interest to the policy holdersIII. loss of interest to the insurance companyA. I , II onlyB. I, III onlyC. II, III onlyD. I , II , III132 Insurance companies impose premium loading to the following persons, EXCEPTA. persons with impaired healthB. persons involved in hazardous occupationsC. persons with extra riskD. persons in good health133 The Risk-Based Capital (RBC) Framework requires each insurer toA. maintain a capital adequacy level commensurate with its risk profilesB. maintain a capital adequacy level commensurate with its operation costC. maintain a investment fund adequacy level commensurate with its risk profilesD. maintain a investment fund adequacy level commensurate with its operation cost134 Which of the following is NOT the asset of a life assurance company?A. sharesB. loan to policyholdersC. bank loanD. government securities135 The portion of the surplus that may be passed to the shareholders in the form ofA. sharesB. interestC. bonusesD. dividendsING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English48136 Under this method, the bonus allotted is in proportion to the sum assured and thebonuses accumulated under the policy. This type of surplus distribution method is:A. interim bonusB. maturity bonusC. simple reversionary bonusD. compound reversionary bonus137 Information necessary for the proper assessment of risk is generally obtained from thefollowings, EXCEPTA. the proposal formB. the medical reportC. loss adjuster’s reportD. attending physician’s statement138 Two main forms of policy areA. report type and listing typeB. narrative type and schedule typeC. narrative type and listing typeD. report type and narrative type139 Which of the following is NOT the main section found in most policies?A. the headingB. the preambleC. endorsementD. the proviso

140 Days of grace, non-forfeiture condition is underA. conditions limiting the scope of contractB. conditions enlarging the scope of contractC. conditions explaining the scope of contractD. conditions changing the scope of contract141 Which of the following is not the detail that must be provided to the insurer upon a deathclaim?A. policy numberB. date and cause of deathC. policyholder’s name and identity card numberD. nominee’s name and identity card number142 The most commonly used document for proof of age isA. school leaving certificateB. identify cardC. international passportD. certified extract from baptism register143 Section 161 of the Insurance Act 1996 provides that where a life policy claim upon thedeath of the policyowner is not paid within 60 days of receipt of intimation of the claim,the insurer shall pay a minimum compound of _________ percent of interest per annum?A. 3%B. 4C. 5%D. 6ING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English49144 Documents required for total permanent disability claim due to accident are:I. completed claim formII. certified true copy of the life assured’s identification cardIII. medical certification to be completed by the attending doctor after the life assured’s disabilityIV. certified true copy of the police reportA. I , II , III onlyB. I, II, IV onlyC. II, III, IV onlyD. I , II , III , IV145 Which of the following is NOT the method of calculation of age used by insurancecompanies?A. age last birthdayB. age next birthdayC. age nearest birthdayD. age possible birthday146 Interest charge calculations usually arise under the following conditions, EXCEPTA. policy revivalB. policy under grace periodC. policy loan repaymentsD. outstanding premium charges147 The document on the code of Ethics and Conduct, dwells at length on the followingprinciples, EXCEPTA. to avoid conflict of interestB. to avoid misuse of informationC. to avoid misuse of positionD. to conduct business with highest return148 The Code applies to all intermediaries, the intermediaries refers toA. persons selling life insurance and registered insurance brokersB. employees of a life insurance company and registered insurance brokers

C. persons selling life insurance an employees of a life insurance companyD. registered insurance brokers and registered financial planners149 To discontinue a policy or to have a policy paid-up and then to affect a new one inanother company or the same company is calledA. rebateB. twistingC. ratificationD. reinstatement150 The aim of statement of life insurance practice isA. to reduce the formalities involved in the reinstatement and assignment of policiesB. to reduce the formalities involved in the issue of new policies and assignment of policiesC. to reduce the formalities involved in the issue of new policies and payment of a claimD. to reduce the formalities involved in the assignment of policies and payment of a claimING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English50ING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English51

PCE Trial Exam 4Note: You are strongly urged to purchase and read MII’s Textbooks for a completeunderstanding of the syllabus in preparation for the examination. This revision material ispurely a revision tool and it is to be used only after you have read MII’s Textbooks. Since thisrevision material is purely a revision tool, it does not guarantee your passing of the respectiveexaminations.PCE Trial Exam 04 – Parts A & C1. The following are essential features of insurance EXCEPTA. It is an economic institution based on the principle of mutuality or cooperationB. It accumulates funds and pays claims for all risksC. It accumulates funds to pay for claims arising as a result of specified risksD. Only certain risks can be insured, the occurrence which can be confidently estimated with acertain degree of accuracy2. The following are methods of handling riskI. Avoid the person who produces the riskII. Reduce the total amount of lossIII. Plan to retain risksIV. Transfer the risk to a third partyA. I,II and IIIB. I, II and IVC. I and IID. All the above3. Life insurance can be defined as a contract whichA. Pays donationsB. Pays an agreed sum of money on the happening of a contingency/event dependent on ahuman life.C. Pays an agreed sum of money when someone is struck by accident onlyD. Helps accumulate savings to purchase an annuity4. An agent performs an act not within his scope of authority. This authority exercised laterbecomes binding on the principal. This is known asA. Express authority-an authority given to the agent orally or in writingB. Implied authorityC. RatificationD. Apparent Authority

5. An applicant knows he has a high probability of loss and submits a proposal forinsurance. This leads to sub-standard risks being accepted for insurance resulting in aless favourable underwriting result. This is known asA. Moral obligationB. Anti-SelectionC. Physical hazardD. Hazardous Insurance6. Peril is the ……..of loss whereas Hazard ……… the outcome of a loss.A. Object, decreasesB. Cause, increasesC. Chance, acceleratesD. Source, causesING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English527. An accidental and unintentional loss is known asA. Pure lossB. Predictable lossC. Fortuitous lossD. Catastrophic loss8. What type of bonus is only paid on in-force policies, which result in claims either inmaturity or death?A. Interim bonusB. Terminal bonusC. Cash bonusD. Guaranteed bonus9. Which of the following is NOT true about the categories of risk?A. Particular risks are the responsibility of the individuals themselvesB. Pure risks exists when there is the possibility of either loss or no lossC. Investment in the stock market is considered as speculative riskD. Speculative risk can easily be insured.10. The termination of a life insurance contract is usually through the settlement of a claim. Aclaim arises out of the following situations EXCEPTA. Maturity of the policyB. Death of the insuredC. Sickness or disability claimsD. Property damage claims11. Which of the following is NOT true about the application of the law of large numbers?A. As the number of the loss exposure increases, the predicted loss tends to approach theactual loss.B. It operates when a large number of claims arisesC. It is used to estimate adequate premium to be chargedD. It operates when insurers are able to underwrite a large number of similar risks12. Medical and Health insurance comprises which of the following types of insuranceproducts?I. Medical expenses insuranceII. Critical illness insuranceIII. Disability income insuranceIV. Hospitalization cash benefit insuranceA. I, II & III C. I, II & IVB. I, III & IV D. All of the above13. An insured’s car was damaged by a negligent third party. The cost of repairs amounted toRM 1200. In the presence of subrogation, which of the following is NOT true?A. The insured can claim RM1200 from the insurer and RM1200 from the negligent party

B. In the absence of subrogation, the insured can claim from the insurer and the negligent partyC. In the presence of subrogation, the insured can only claim either from the insurer or thenegligent partyD. The principle of subrogation applies to prevent the insured from making profit out of his loss14. The following are among the few stages in the consumer buying decision process,EXCEPTA. Pre-purchase evaluationB. Information searchC. Problem recognitionD. Evaluation of alternative choicesING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English5315. Which is the least effective approach to risk management?A. Avoiding the riskB. Retaining the riskC. Transferring the riskD. Ignoring the risk16. Listed below are the legal requirements of insurance contracts EXCEPTA. Intention to create legal relationshipB. ConsiderationC. No offer and no acceptanceD. Legal capacity to contract17. An insurance policy is a legally binding contract betweenA. The insurer and the nomineeB. The insurer and the trusteeC. The insurer and the insured or policyholderD. The policy owner and the nominee18. An agent is not allowed toI. Let his own interest conflict with his obligation to the principalII. Take any secret motive or bribe from any party with whom he deals on behalf of theprincipalIII. Disclose confidential information obtained in the course of his duties as an agent to otherparties except the principal insurance companyIV. Delegate his duties to a sub-agent without authority expressed or impliedA. I and II onlyB. II and IV onlyC. I, II and IV onlyD. All of the above19. List out the sequence of the risk management processA. Selection, Evaluation, Identification, Implementation, ControlB. Evaluation, Identification, Selection, Implementation, ControlC. Identification, Evaluation, Selection, Implementation, ControlD. Identification, Selection, Implementation, Evaluation, Control20. The term “grace period” in a life/family takaful policy meansA. The period where you can cancel your policy without any penaltyB. Additional period of time to make premium payment after the premium due date withoutpenaltyC. Period of time required by the life insurer to underwrite your proposalD. Period of time required to pay your loan installment21. The principle of Utmost Good Faith is breached whenA. The proposer for insurance discloses irrelevant informationB. The proposer for insurance fails to disclose material facts or misrepresents material factsC. Non material facts are not disclosed to the insurerD. The agent voids the insurance contract22. For life insurance, insurable interest needs to exist only at

A. At the time of policy surrenderB. The time of the claimC. The time of inception of the insuranceD. The time of changing the beneficiaryING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English5423. The risks covered by life insurance include the following EXCEPTA. Premature deathB. Financial lossC. Total permanent disabilityD. Old age or retirement24. Information necessary for the proper assessment of risk can be obtained fromI. proposal formII. attending physician’s statementIII. agent’s reportIV. adjustor’s reportA. I, II and III onlyB. I, II and IV onlyC. I, III and IV onlyD. I,II,III and IV25. The following information is contained in the proposal formA. Applicant’s personal particularsB. Details of insurance such as sum assured, type of insurance, frequency and method ofpaymentC. Applicant’s occupation and family historyD. All of the above26. Below are the various categories of policy conditions and its examples. Which one is NOTtrue?A. Conditions limiting scope of contract-incontestability clauseB. Conditions adding benefits to the scope of contract- e.g. grace periodC. Conditions limiting scope of contract- non forfeiture conditionsD. None of the above27. The following are expenses incurred by life insurers in running business EXCEPTA. Initial expensesB. Renewal expensesC. Termination expensesD. Profit share expenses28. If no insurable interest existed at the time a life policy was taken out, the policy becomesA. Voidable; depending on the judgment of the High CourtB. Null and void; the contract is not enforceable in a court of lawC. Voidable; the company may or may not be obliged to pay a claim under the policydepending on the discretion of the manager.D. Unenforceable; the policy is still recognized by the courts as still subsisting but no claim canbe made.29. In times of death claims, the following documents are acceptable to the insurer as proofof title and ownership, EXCEPTA. A deed of assignmentB. A probate of the willC. Insured’s identity cardD. Proof as trustee under section 23 of the Civil Law ActING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English55

30. The main function of Insurance Mediation Bureau is toA. Provide compensation to victims of motor accidentsB. Provide an alternative procedure to resolve disputes arising out of personal insurancepolicies.C. Provide insurance coverage at a reasonable cost to certain classes of vehicles as a kind ofsocial serviceD. Manage the Unplaced Motor Pool31. Replacement of Policies (R.O.P) is considered detrimental to the policyowner’s interestEXCEPTA. The qualifying period (2-3 years) to accumulate cash value will commence again from thenew policyB. The amount of annual premium under an existing policy may be lower than the new policybased on the insured’s then attained ageC. The initial costs of life insurance policies in the earlier policy years results in the policyownerbearing the costs only onceD. The suicide and incontestability clause begin anew in a new policy being denied by theinsurer which would be paid under the policy replaced.32. The following statements describe the characteristics of an agency relationship. Which ofthem is/are true?I. A contract completed by an agent on behalf of the principal is considered to be the contractof the principalII. If it is within an agent’s authority to accept premiums, payment to the agent is deemed aspayment as made to the principalIII. The act of an agent within the scope of his or her authority is deemed to be an act of theprincipalIV. An agent has fiduciary relationship with his principalA. II, III & IVB. I, II & IVC. All of the aboveD. I, II and III33. Which of the followings are the principles underlying the guidelines of the Code of Ethicsand Conduct?I. to avoid misuse of positionII. to avoid conflict of interestIII. to conduct business with the utmost good faith and integrityIV. to ensure completeness and accuracy of relevant recordsA. I, II and III onlyB. I, III and IV onlyC. II,III and IV onlyD. I, II, III and IV34. The insurance intermediaries shall notI. make inaccurate or unfair criticisms of any insurersII. ensure the policy proposed is suitable to the needs of the prospective policyholderIII. attempt to persuade a client to terminate his existing policiesIV. conduct business with the highest degree of integrity and ethicsA. I and II onlyB. I and III onlyC. II and IV onlyD. III and IV onlyING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English5635. An insurance plan based on Shariah principles is calledA. Takaful

B. WakalahC. MudharabahD. Aqad36. Which of the following is NOT true about the coverage under supplementary benefits?A. Permanent disability benefit include payment of sum insured and waiver of premiumB. Personal accident benefit does not cover bodily injury caused by some hazardous pursuitsand sportsC. Double Accident benefit pays out when there is a continuous event of accidents incurred tothe life assured.D. Surgical and Nursing Fees benefit does not include the hospitalization expenses37. The amount of group insurance that can be applied for without medical evidence isreferred to asA. Free CoverB. Non- Medical LimitC. Non- evidence CoverD. Medical Free Cover38. To have the existence of _____________, the purchaser of a life insurance policy muststand to suffer a financial loss on the death of the insured.A. Uberrimae fidesB. Insurable interestC. Utmost good faithD. Proximate cause39. What principles apply as a consequence of indemnity?A. SubrogationB. ContributionC. Proximate causeD. Subrogation and contribution40. Which of the following does not satisfy conditions for an education policy?A. The beneficiary should be the childB. If the insured is the parent, the child must be the nomineeC. If the insured is the child, the life of the payor is not coveredD. Maturity benefits must be payable when the child is between the ages 13 to 25 years41. The earliest life insurance contract was found in England in 1583 on the life ofA. Edmund HalleyB. William GybbonC. William CybbanD. William Halley42. Level Term insurance is also known asA. Renewable Term InsuranceB. Limited InsuranceC. Temporary InsuranceD. Life InsuranceING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English5743. The methods of indemnity includeI. Payments by cashII. ReplacementIII. ReinstatementIV. RepairA. I,II and III onlyB. I,II and IV onlyC. I,III and IV onlyD. I, II, III and IV44. In Malaysia, the main purpose of regulation includeA. To maximize the profit of insurers

B. To ensure consumers are informed and competentC. The promotion of public interest and promote fairness and equityD. To protect the interest of insurance companies45. For personal accident policies, the most important cause is calledA. Proximate causeB. Mortality causeC. Crucial causeD. Deciding cause46. The principle of “utmost good faith” means that the parties must discloseA. All material facts of which they are awareB. All material facts of which they ought to be awareC. Only those facts which have been specifically asked for by the companyD. Both A & B47. In determining the tabular (gross) premium for _____________ policies, the correspondingelements are mortality, interest, expenses and bonus loading.A. EndowmentB. TermC. Non-participatingD. Participating48. The following benefits are covered under a medical and health policy EXCEPTA. Cosmetic or plastic surgeryB. Hospital accommodation and nursing expensesC. Surgical expensesD. Physicians’ expenses49. What are the documents important for policy administration?A. Proposal form, policy document, gratuity statementB. Proposal form, policy, endorsement, renewal notice, proof of medical and health insurancepremium payment for tax reliefC. Policy form, pay slip, income tax B1 formD. Reinstatement form, pay slip and income tax form50. When a loss is the result of many causes _______________________, that is the dominantor effective cause, must be identified and attributed as the cause of loss.A. The proximate causeB. The probability of lossC. The damaging causeD. The concurrent causeING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English5851. What is Underwriting from an insurer’s perspective?A. It is assessing and preventing the risk from taking placeB. It is assessing moral hazard and prevent it from taking placeC. It is the assessment and selection of risks and determining the premium, terms andconditions of the insurance applicationD. It is avoiding under-table applications52. In determining a premium rate for life insurance, it is assumed that the deaths among agroup of insured people of the same age, will in future,A. Follow a pattern similar to that of an identical known group in the pastB. Change according to the pattern of an identical known groupC. Follow a pattern of an identical known groupD. Change according to the pattern of identical known group in the past53. What are the factors taken into consideration for life insurance premium calculationpurposes?I. Investment returns

II. ExpensesIII. TaxIV. Bonus LoadingA. I, II and III onlyB. I, II and IV onlyC. II,III and IV onlyD. I, II, III and IV54. Parties must give consideration before an agreement can be legally binding. In generaland life contracts, the consideration to be paid by the insured is termed asA. Cash valueB. Money considerationC. PremiumD. Cash payment55. In settling a maturity claim, the following is NOT required when the policyholder is the lifeinsuredA. Proof of survivalB. Proof of ageC. Policy documentD. Death certificate56. Below are the examples of initial expenses incurred in the first year of the policy, EXCEPTA. Advertising costsB. Medical examination expensesC. First year commissionD. Litigation Expenses57. Its membership is compulsory for all general insurers in Malaysia. One of it’s mainobjective is to manage the Malaysian Motor Insurance PoolA. Unplaced Motor PoolB. High Risks Motor Insurance PoolC. Motor Insurers’ BureauD. Persatuan Insurans Am MalaysiaING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English5958. For General Insurance business, self-regulation with respect to the transaction ofinsurance business has been achieved through insurance associations such as:I Association of Malaysian Loss Adjustors (AMLA)II General Insurance Association of Malaysia (PIAM)III Insurance Brokers Association of Malaysia (IBAM)IV Malaysian Insurance Institute (MII)A. I, II and III onlyB. II, III and IV onlyC. I, III and IV onlyD. I, II III and IV59. Takaful concept isA. To establish confidence and enables forward planning of economic activitiesB. A method of joint guarantee among a group of people in a scheme to share the burden ofunexpected financial losses that may fall upon any of them. It upholds the principles ofshared responsibility, mutual help and cooperation.C. A pooling of resources by a group of people to benefit one anotherD. A method of joint venture among a group of people to realize business ventures60. The use of fire resistant material in the construction of building is the method of handlingrisks throughA. Risk avoidance

B. Loss controlC. Risk retentionD. Risk transfer61. Ms A has cancer, which is known by herself. In filling the proposal form to apply for a lifeinsurance policy, she is not aware of the principle of utmost good faith and her agent didnot task her to state the above health condition. The principle of utmost good faith isbreached under_________.A. Innocent misrepresentationB. Fraudulent misrepresentationC. Non-disclosure / ConcealmentD. Disclosure62. The term “indemnity” represents which one of the followingA. Promise to PayB. InsurabilityC. Insurance for salesD. Insurance risk63. Such schemes are based on an agreement between the insurer and the employer wherebythe employer deducts the premium from the employee’s salary.A. Banker’s Order DeductionB. Payroll DeductionC. Employee Premium DeductionD. Employee Fund Deduction64. The arrangement where a group of members agree to jointly guarantee against loss ordamage that may fall upon any of them, but without a contractual transfer of risk is calledA. InsuranceB. SyuraC. TakafulD. MudharabahING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English6065. Endorsements on a life insurance policy can be done atI time of issue of policyII after issue of policyIII before issue of the policyIV the time of claimsA. II onlyB. I and II onlyC. I and III onlyD. II and IV only66. On maturity on an endowment policy, what are the settlement options which can beexercised?I cashII convert to annuityIII leave with the insurer on agreed termsIV installmentsA. I, II and III onlyB. I, II and IV onlyC. II, III and IV onlyD. I, II, III and IV67. The premium charge for life insurance policies usually vary in relation to the followingfactorsA. The age and sex of the proposerB. The type of policy required

C. The sum assuredD. All of the above68. What is key-man insurance?A. It is insurance purchased by a firm to protect itself against financial losses caused by deathor disability of a key employee.B. It is insurance purchased by an important employee in an organization to protect himselfagainst any loss of employment.C. It is an insurance plan which provides for the payment of annual income to a key employeeafter retirementD. It is an insurance plan which provides benefits for a large group of key employees69. In order to ensure that the child will have life insurance even if he or she later becomesuninsurable, the parents can issue this type of life insurance on the life of the childduring his or her early yearsA. Protected Educational PoliciesB. Children’s Deferred AssuranceC. Child’s Education PlanD. Juvenile Policy70. Takaful contribution is credited into two separate accounts namelyA. Participant’s Account and Participant’s Personal AccountB. Mudharabah and TabarukC. Participant’s Account and Participant’s Special AccountD. Tabaruk and Participant’s AccountING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English6171. Which of the following is not true about the privileges of a life policy?A. The cover under the policy continues during the 30 days of grace for half of the sumassured.B. A home service life policy is entitled for a surrender value after the policy has been in forcefor six years or moreC. Cash value of a life policy can be used as a single premium to provide for an insurance onthe original terms but with a reduced sum assured.D. Policy loans are generally granted up to 85 or 90 percent of the acquired cash value of apolicy72. What is the Risk-Based Capital (RBC) framework?A. It’s an underwriting framework for insurers to implement to ensure uniformity of underwritingpracticesB. It’s a capital adequacy framework for all insurers licensed under the Insurance Act 1996 tomaintain a capital adequacy level commensurate with its risk profilesC. It’s a risk assessment framework to ensure risks are correctly classifiedD. It’s a human resource framework to ensure insurers recruit technically qualified personnel73. Conventional insurance does not conform to some Shariah requirements. What are someof these requirements?I. Al TarukII. Al MaisirIII. Al GhararIV. Al RibaV. Al ShiraA. I & IIB. II & IVC. II, III & IVD. All of the above74. The intermediaries or middlemen in the insurance market are composed of______________ and ______________.A. Insurance agents and sellers

B. Buyers and sellersC. Brokers and buyersD. Brokers and insurance agents75. Agency can be defined as the relationship whereA. The person called the broker is engaged by another person called employer – the brokerhas the power to effect the employer’s relationship with third parties.B. The person called the agent is engaged by another person called the principal – the agent isgiven power to effect the principal’s relationship with third partiesC. The intermediary is engaged by the other party known as creditor to recover debtsD. None of the above76. Studies have shown that the important factors that influence the consumer buyingdecision in selecting an insurer areA. The reputation of the insurer and its policy benefits onlyB. The reputation of the insurer, quality of coverage and services provided, policy benefits,agent’s professional capability and personalityC. The quality of the insurer’s staffD. The insurer’s extensive branch networkING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English6277. It is a legal requirement in terms of Section 47 of the Insurance Act 1996, that everyinsurer should establish and maintain an up-to date_____________________.A. Record BookB. Note bookC. Policy RegisterD Register of Insurance Agents78. The term permanent disability is also often referred to as ________________ since theaffected life ceases to be a productive force.A. Economic deathB. DeathC. Temporary disabilityD. Situational death79. What is the MAJOR difference between participating and non-participating contracts?A. Participating contracts are mainly for protection purposes and non-participating contractsare mainly for savingsB. Participating contracts’ major benefit is generally guaranteed and non-participating contractsare made of guaranteed benefit, regular bonuses and final bonusC. Non-participating contracts are mainly for protection purposes and participating contractsare mainly for savings.D. Non-participating contracts and participating contracts have no difference at all80. Endowment insurance can be useful in these 3 main ways EXCEPTA. As a means of hedging against the possibility of untimely death.B. As a means of accumulating a fund for specific purposes.C. As an incentive to save in a systematic manner.D. As an inconvenient and difficult way of providing for old age.81. Medical and health insurance policies can be divided into two categories which are______________ and ___________.A. Indemnity Policies and Benefit PoliciesB. Benefit Policies and Surrender PoliciesC. Indemnity Policies and Subrogation PoliciesD. Surrender and Subrogation Policies82. Below are the categories of underwriting decisions EXCEPTA. Standard (issued exactly as applied for) ;B. Sub-substandard/modified (issued on other-than-applied- for basis)C. Non-standardD. Declined

83. The following are classified as breach of “utmost good faith” EXCEPTA. Non-disclosureB. ConcealmentC. Fraudulent misrepresentationD. Innocent non-disclosure84. Medical underwriting of an applicant for medical and health insurance requiresconsiderations of both _____________and ________________ to determine on what basisinsurance can be offered or if it should be refused.A. Medical history and current physical conditionB. Medical insurance history and mental conditionC. Medical history and current emotional stateD. Medical insurance history and current physical conditionING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English6385. Section 7 of the Insurance Act 1996 describesA. Endowment PoliciesB. Investment Link Insurance PoliciesC. Last Survivor AnnuityD. Group Insurance86. The principle of utmost good faith applies to medical and health insurance under_____________ of the Insurance Act 1996.A. Section 152B. Section 168C. Section 160D. Section 15087. In Major Medical Expenses insurance, two common expense participation methods areA. Experience refunds and contributionsB. Deductibles and co-paymentsC. Replacement fees and deductionsD. Rating fees and refunds88. Disability income insurance is also known asA. Temporary health insuranceB. Permanent health insuranceC. Non permanent health insuranceD. Semi permanent health insurance89. In practice, insurance company uses this technique to predict future losses throughhistorical dataA. Priori ProbabilityB. Empirical ProbabilityC. Judgmental ProbabilityD. Secondary Probability90. Specific questions relating to Medical and Health Insurance. This would include thefollowingI Family and Medical HistoryII Smoking & drinking habitsIII Hazardous pursuits / avocationIV AIDS related questionsA. I, II and IIIB. I, III and IVC. II, III and IVD. All of the above91. What is the difference between contributory and non contributory group medical andhealth insurance plans?A. Non- contributory group medical and health insurance must cover all eligible members ofthe group and contributory group medical and health insurance requires the participation of

at least 75% of the eligible members group.B. Non- contributory group medical and health insurance must cover half of the eligiblemembers of the group and contributory group medical and health insurance requires theparticipation of at least 70% of the eligible members groupC. Non- contributory group medical and health insurance covers none of the eligible membersof the group and contributory group medical and health insurance requires the participationof at least 85% of the eligible members group.D. Non- contributory group medical and health insurance covers all of the eligible members ofthe group and contributory group medical and health insurance requires the participation ofnone of the eligible members group.ING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English6492. Questions 92, 93 and 94 are based on the following table:Table: Premium Rates for Whole Life Policy on Male Lives. Treat Female Lives as 3 YearsYoungerMale Age Last Birthday Premium Per RM 1,000 Sum Assured21 18.0222 18.2523 18.5024 18.74Proposer’s particulars and Policy Details:Sex : FemaleDate of Birth : 22/08/1971Cover to Commence : 07/09/1996Policy Type : Whole Life PolicySum Assured : RM 10,000Based on the data above what is the insured’s age LAST birthday?A. 22 C. 26B. 25 D. 3093. How much is the premium payable based on age NEXT birthday?A. RM 180.20 C. RM 185.00B. RM 179.20 D. RM 182.5094. Which of the following is TRUE about the information shown above?A. The premium rate for male and female is the sameB. This policy is entitled to a basic cash valueC. The monthly premium is RM 14.93D. If the insured surrender the policy after five years, she will get nothing95. Medical and Health insurance policies usually provide for payment of claims up to limitsstipulated in the policy. These limits could be one or a combination ofA. One time limit and annual limitB. Maximum limit, one time limit and annual limitC. Per disability limit, overall annual limit and lifetime limitD. Per disability limit, one time limit and annual limit96. In general, the loans are granted up to ______________ of the acquired cash value of a lifepolicy.A. 85 %B. 90 %C. 92 %D. 95 %97. In medical and health insurance claims, insurers use the following cost containmentmeasures EXCEPTA. Inner limits and maximum period of compensationB. Schedule of surgical procedures

C. Flexible limitsD. Deductibles and panel hospitalsING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English6598. The principle of Indemnity requires that the insurerA. Restore the insured to a better financial position as he enjoyed after the lossB. Restore the insured to the same financial position as he enjoyed immediately before the lossC. Restore the insured to a reasonable financial position as he enjoyed before the lossD. To compensate the insured for mutually agreed sum of money before the loss99. Mortality and morbidity rates generally increase withA. the age of the populationB. the increase in income of the population.C. the length of period required to recuperate from any injury.D. economic downturn100. What is the difference between life insurance and annuity?A. Life insurance is to liquidate the estate and annuity is to create the estate of the deceasedB. Life insurance aims to create an estate or accumulate a lump sum fund whereas the annuityis to liquidate the asset that has been createdC. Life insurance is to accumulate a lump sum whereas annuity is to distribute the lump sumwhen the insured diesD. No difference between the two

Answers for PCE Trial Exam 4 – Parts A & CQ = Question; A = AnswerQ A Q A Q A Q A Q A1 B 21 B 41 B 61 C 81 A2 D 22 C 42 C 62 A 82 C3 B 23 B 43 D 63 B 83 D4 C 24 A 44 C 64 C 84 A5 B 25 D 45 A 65 B 85 B6 B 26 C 46 D 66 D 86 D7 C 27 D 47 D 67 D 87 B8 B 28 B 48 A 68 A 88 B9 D 29 C 49 B 69 B 89 B10 D 30 B 50 A 70 C 90 D11 B 31 C 51 C 71 A 91 A12 D 32 C 52 A 72 B 92 B13 A 33 D 53 D 73 C 93 C14 A 34 B 54 C 74 D 94 B15 D 35 A 55 D 75 B 95 C16 C 36 C 56 D 76 B 96 C17 C 37 A 57 D 77 C 97 C18 D 38 B 58 A 78 A 98 B19 C 39 D 59 B 79 C 99 A20 B 40 C 60 B 80 D 100 BING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English66ING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English67

PCE Trial Exam 5Note: You are strongly urged to purchase and read MII’s Textbooks for a completeunderstanding of the syllabus in preparation for the examination. This revision material ispurely a revision tool and it is to be used only after you have read MII’s Textbooks. Since this

revision material is purely a revision tool, it does not guarantee your passing of the respectiveexaminations.PCE Trial Exam 05 – Parts A & C1.2.3.4.5.6.Which of the following is one of the risk handling methods?A. Risk manipulationB. Risk protectionC. Risk modificationD. Risk retentionIn contrast to life insurance, ________________ is not a very significant factor inunderwriting medical and health insurance.A. Physical conditionB. Insurable interestC. Family historyD. Medical historyA voidable contract will remain valid untilA. It fails to comply with legal formalitiesB. The aggrieved party exercises the option to treat it voidC. It is proven there is no considerationD. It is used for illegal purposesInsurance isA. A loss sharing arrangementB. A pooling of riskC. An economic institutionD. All of the aboveThe functions of insurance include the followingI. Stimulates business enterpriseII. Reduction of lossesIII. Provides employment for manyIV. Sources of capital for investmentA. II & IVB. II, III & IVC. I & IID. I, II, III & IVWhich of the following is NOT a characteristic of an insurable risk?A. It should not be against public policyB. It must be accidental in natureC. It must be a speculative riskD. It must be a pure riskING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English687.8.9.10.11.12.13.14.

Risk of property damage from earth quake, flood and typhoon is classified underA. Fundamental riskB. Speculative riskC. Particular riskD. Pure riskWhich of the following describes the definition of risks?A. An uncertainty regarding lossB. A condition that increases the chance of lossC. A reduction of economic valueD. All of the aboveThe essential elements of a contract are offer and acceptance andA. ConsiderationB. Legality of objectC. Capacity to contractD. All of the aboveIn marine cargo insurance, insurable interest must existA. At the time of lossB. Before the ship sailsC. At the time of effecting the insurance contractD. At the inception of the contract and at the time of lossThe transfers of legal rights and obligations under a life insurance policy to another personis calledA. A conversionB. An endorsementC. A rectificationD. An assignmentWhat is the main statute law governing the life insurance business?A. The Civil Law 1972B. The Insurance Act 1996C. The Insurance Act 1965D. The Companies Act 1983The relationship of principal and agent may be terminated byI. Notice of renunciation given to the principal by the agentII. Notice of revocation given by the principal to the agentIII. Mutual agreementIV. Death, lunacy or bankruptcy of the principal or agentA. I, II and IIIB. II, III and IVC. I, II and IVD. I, II, III & IVWhich of the following statements is NOT true about void contracts?A. Void contracts are not enforceable in a court of lawB. Void contracts are simply those which the law holds to be no contracts at all, a nullity from thebeginningC. They are totally invalid and are nothing more than mere agreementsD. Void contracts will remain valid until the aggrieved party exercises the option to treat themvoidING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English6915.16.17.18.19.

20.21.22.An unenforceable contract usually arises becauseA. There was non-disclosureB. Of the failure to comply with legal formalitiesC. The agent failed to disclose material factsD. There was a breach of the principle of utmost good faithThe legislation in Malaysia that regulates Islamic insurance is theA. Takaful Act 1984B. Insurance Act 1996C. Central Back of Malaysia Ordinance 1958D. Muslim (Titles and Construction) Ordinance 1952The Takaful Act 1984 is the source of Takaful legislation in Malaysia. The Act is divided intofour parts, including the following:I. Provides for interpretation, classification references to takaful businessII. Provides the mode and conduct of takaful businessIII. Provides for the administration and enforcement of matters such as indemnity, submission ofannual reports and statistical returns etcIV. Specifies powers vested in the Director General of Insurance (DGI)A. I & IIB. I, II & IVC. I, II & IIID. I, II, III & IVThe person to whom the rights are transferred is called __________________; while theperson who transfers the rights is called _________________.A. Assignee; assignorB. Assignor; assigneeC. Transferor; transfereeD. Transferee; transferorAgents can be classified into three categories:A. Life agent, group agent and personal agentB. Special agent, specific agent and universal agentC. Special agent, general agent and universal agentD. Individual agent, group agent and special agentThe principle of indemnity states thatA. The insurer should restore the insured to the same financial position as before the lossB. The insurer should restore the insures to a better financial position as before the lossC. The insurer should restore the insured to a lesser financial position as before the lossD. The insured should enjoy indemnity which is less than his loss as a result of policy limitationsWhich of the following is NOT true about a claim under the principle of subrogation?A. This type of subrogation is considered as arising out of tortB. In the absence of subrogation, the insured cannot get his claimC. In the presence of subrogation, the insured can either claim from the insurer or the negligentpartyD. The principle of subrogation applies to prevent the insured from making profit out of his lossWhich of the following is NOT true about the insurance market?A. An insurance market refers to the facilities of buying and selling insuranceB. A propriety company is owned by shareholders and profits earned belong to themC. A co-operative society is owned by shareholders and policyholders which may be termed as amutual insurerD. The intermediaries in the insurance market are agents and brokersING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English70

23.24.25.26.27.28.29.30.What do you understand when the organization of a company is said to be decentralized?A. When the preparation of all policies and renewal, etc. is carried out in the head officeB. When only the preparation of policies and renewal of the policies are carried out in thebranches concernedC. When there are no branchesD. When underwriting, claims and servicing of the branch business are handled at the branchesup to a pre-arranged limitThe Malaysia Insurance Institute was formed toA. Promote insurance product of MalaysiaB. Encourage people to buy insuranceC. Promote insurance professionalism and to conduct professional insurance examinationD. Both A & BThe principle of ‘utmost good faith’ expect the partiesA. To disclose only those material facts which are askedB. To answer truthfully only the questions in proposal formsC. To disclose only those which they consider materialD. To disclose all material facts of which they are aware of, even if no question is specificallyaskedAssignment of policy can be effected without prior consent of the insurer under thefollowing circumstances exceptA. Marine Cargo PoliciesB. Life policiesC. Transfer of willD. AviationA life officer does not accept all applications for insurance automatically. They examine allrisks carefully. The process of examining the risks is calledA. Ascertaining standardB. Adverse selectionC. SelectionD. Letter of acceptanceAn illegal contract is one whichA. Is created for a specific purposeB. Is created for illegal purposes or is against public policyC. Is legally bindingD. None of the aboveA material fact isA. A fact which will influence an underwriter in deciding the acceptance of the risk or the premiumto be chargedB. Any information given by the insurance companyC. A WarrantyD. Representation of any kindPerils covered in the policy are known asA. insured perilsB. excluded perilsC. uninsured perilsD. exception perilsING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English

7131.32.33.34.35.36.37.The relationship between the insurer and the agent is normally that ofA. Master and servantB. Buyer and sellerC. Principal and agentD. Employer and employeeWhat is the main purpose of the Inter-Company Agreements on General Insurance Business(ICAGIB)?A. To regulate and control the conduct and activities of every person engaged in generalinsurance businessB. To regulate and control the conduct and activities of every insurer engaged in generalinsurance businessC. To regulate and control the conduct and activities of every insurer engaged in life insurancebusinessD. To regulate and control the conduct and activities of all PIAM membersThis involves the selection of segments of the market which have needs that can be met bythe policies developed by the company. This function is known asA. Planning and controllingB. Market identificationC. Product developmentD. Selection of distribution channel_______________ is/are part of the insurance market components.I. HospitalsII. AgentsIII. Loss adjustersIV. ReinsurersA. II & IIIB. I, II & IIIC. II, III & IVD. I, II, III & IVInsurable interest should be present in all life insurance contracts. Which of the followingrelationships does not create insurable interest?A. Husband and wifeB. Creditor and servantC. Master and servantD. Brother and sisterA life insurance contract is an aleatory contract. An aleatory contract isA. A contract of indemnityB. A contract when one party provides something of value to another party in exchange for apromise that the other party will perform a stated act if a specified, uncertain event occursC. A contract that pays double the sum assured in the event of suicideD. A contract that has legal flawsIt is important for an agent to provide good after sales service becauseI. the chance of lapse or business going elsewhere can be minimizedII. the client’s new needs for insurance can be recognized and a sale can be quickly closedIII. the reputation of the insurer as a service-oriented organization is enhancedIV. It can enhance the agent’s business

A. I and IIB. I, II and IIIC. I and IIID. All of the aboveING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English7238.39.40.41.42.43.44.The incontestable clause in life insurance policiesA. Limits the time during which the policyowner has the right to cancel the policyB. Limits the period during which the insurance company can deny claims on the basis ofstatements made in the applicationC. Restricts the insurance company as to the time it can take in the payment of legitimate claimsD. Restricts the policyowner as to the time period during which he or she can exercise ownershiprightsA policy under which the surrender value is used as a single premium to provide for anassurance on the original terms, but for a reduced sum assured is known asA. An extended policyB. A paid-up policyC. A term policyD. A fees policyPolicies that provide for an income during periods of sickness or disability on a long-termbasis are known asA. Dread disease policiesB. Investment-linked policiesC. Permanent health insurance policiesD. Permanent disability insurance policiesThe grace period isA. A period of time after the maturity date during which a policy remains in force without penaltyeven though the premium due has not been paidB. A period of time after the premium due date during which a life policy remains in force withoutpenalty even though the premium due has not been paidC. A period of time in which an insurance policy goes into effect once the initial premium is paidD. A period of time which a policyholder could lodge a complaint with the Director General ofInsuranceThe renewal underwriting of ___________________policy is limited to the rescission of thepolicy during the contestable period or the refusal to accept an application forreinstatement.A. An optional renewableB. A guaranteed renewableC. A conditional renewableD. A non-cancelableFor married couples under combined assessment in the basis year, the total tax reliefallowable for life insurance premiums and EPF contribution isA. RM5,000B. RM6,000C. RM8,000D. RM12,000______________ is one where the premium payment ceases on death and no deduction onthe remaining premium is made from the claim payment.

A. True premiumB. Installment premiumC. One-off premiumD. Full premiumING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English7345.46.47.48.49.50.51.__________ will usually result in the insurer paying something more than its interpretationof the facts would warrant and the claimant accepting payment for less than that claimed.A. ArbitrationB. LitigationC. MediationD. A compromise settlementThe following documents are generally acceptable as proof of age, exceptA. Government school leaving certificateB. Certified extract from Baptism RegisterC. International passportD. None of the aboveWhich of the following describe endowment assurance?I. It is a decreasing term insuranceII. It has an increasing investment componentIII. In short-term endowments, the life insurance predominates and the investment element isrelatively unimportantIV. Anticipated endowment insurance pays cash to the policyholder at regular intervalsA. I & IIB. I, II & IVC. I, II & IIID. All of the aboveWhich of the following does NOT describe mode of payment correctly?A. Premium paid under modes other than yearly are slightly higher per yearB. Monthly premium is higher because more administrative work is involved in the collectionC. Home service scheme operates in connection with industrial life insurance which usuallyprovides coverage for the higher income group who can affordD. Payroll deduction scheme can only be applied after a written consent from the employeeAccording to the International Consumer Movement, consumers have some basic rightswhich include:I. Right to informationII. Right to be redressIII. Right to chooseIV. Right to satisfactionA. I, II & IIIB. II, III & IVC. I, II & IVD. All of the aboveWhen an insured fails to disclose a material fact intentionally, it is calledA. DisclosureB. ConcealmentC. MisrepresentationD. Fraudulent misrepresentation

Hospitalization cash benefit insurance can be sold as a ___________, exceptA. Stand-alone policyB. Critical illness insuranceC. Rider to a life insuranceD. Medical and health insurance policyING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English7452. Comprehensive hospitalization and surgical insurance policies are also called___________________ in Malaysia.A. Clinical insuranceB. Major medical expenses insuranceC. “As charged” policiesD. Co-insurance policies53. Co-payment refers toA. The sharing of expenses between the policyholder and the insurerB. The sharing of expenses between the agents and the policyholderC. The sharing of profits between the policyholder and the insurerD. The sharing of profits between the agents and the insurer54. The insurer of an optionally renewable policy may choose to modify the policy rather thannon-renew. The modifications may be as following except:I. An exclusion endorsement or a special-class premium because of a given impairmentII. An increase in the basic premium because of a change to a more hazardous occupationIII. An increase in elimination periods to avoid small, repetitious claimsIV. An extended coverage by an exclusion riderA. I, II and IIIB. I, II and IVC. II, III and IVD. All of the above55. Which of the following clause is reflected under Section 147 (4) of the Insurance Act, 1996A. Non-avoidance clauseB. Incontestability clauseC. Suicide clauseD. Misrepresentation clause56. What are the alternative solutions when a person cannot pay his future life policy premiumbut still can be covered under the policy?I Conversion to a paid-up policyII Exchange the acquired cash value for a term insurance for the full sum assuredIII Apply for surrender valueIV Conversion to an extended grace periodA. I and II onlyB. I and III onlyC. I, II and III onlyD. I, III and IV only57. The following are sources of surplus for an insurance company except:A. InterestB. ExpenseC. MortalityD. Interim bonus58. When the insured fails to pay a premium, it provides for a continuation of the insurancecover to bring the policy to its original statusA. Policy conversion

B. Automatic premium loanC. Maturity loanD. Limited payment endowmentING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English7559. The ___________________enables a person to renew a lapsed policy, notwithstanding thatthe days of grace and the period of non-forfeiture have both expired.A. Lapsation provisionB. Reinstatement provisionC. Incontestable provisionD. Renewal provision60. Under a standard case, the premium changes according to the age. The younger the age atentry of life insured, the premiums would beA. RefundedB. LowerC. HigherD. Loaded with additional payment61. ___________________provides that the assignor can revoke all the rights even after theassignment of policyA. Absolute assignmentB. Conditional assignmentC. ReassignmentD. Policy assignment62. Below are various factors that influence mortality,I AgeII SexIII Marital statusIV OccupationA. I,II and IVB. I, II and IIIC. II, III and IVD. All of the above63. Which of the following is NOT true about life insurance contracts?A. Life insurance contracts are long-term contractsB. The premium for life insurance contracts cannot be revised during the term of the contractC. The contracts cannot be cancelled unilaterally by the insurerD. None of the above64. For mortality only, females experience _____________ rates, and accordingly, females arecharged _________ premiums,A. Lower, lowerB. Lower, higherC. Higher, higherD. Higher, lower65. Why is post-purchase evaluation an important factor for an agent?A. The agent will understand the needs of his client betterB. When the customer may want time to think the idea over, or may not agree with the priceC. The agent will have a better chance of securing the loyalty of his client at the time of renewalD. In situations where the customer is able to recognize his need immediately66. What is the allowable deduction for savings under the National Education Saving Scheme(SSPN)?

A. RM3000B. RM6000C. RM1000D. RM3000ING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English7667. Commencement of the policy may be back dated to an earlier date, usually up to amaximum ofA. 3 monthsB. 6 monthsC. 1 yearD. 2 years68. The basic principle in insurance is when a group of people facing similar risks arecombined, there will be less uncertainty about the amount of loss likely to be incurredwithin a certain period. This basic principle is calledA. Anti-selectionB. Law of large numbersC. Mortality ratesD. Moral hazards69. _______________ policies enjoy the right to share in the profits of the operations of a lifeinsurance company in the form of bonuses.A. EndowmentB. TermC. Non-participatingD. Participating70. When a loading letter is issued by the insurer it is consideredA. An offer to the insuredB. A rejection to the insuredC. A bonus declarationD. A counter offer to the insured71. To ensure that the policyholders whose policies become claims, between declaration ofbonus, do not lose out, the insurers pay outA. Interim bonusB. Cash bonusC. Guaranteed bonusD. Reversionary bonus72. Under current conditions, the main sources of surplus are as the following exceptA. Excess interest (after tax) earned on the life fund over and above that assumed in thevaluationB. Mortality surplus between the actual mortality experienced by the office and the mortality basisassumed in the valuationC. The excess of the allowance made for expenses in the valuation over the actual expensesincurredD. The present value of the liabilities under all policies in force greater than the present value ofthe income and capable gains produced by the assets in the life fund73. Which of the following methods in valuing assets and its explanation is NOT true?A. Price at which the asset was acquired – Cost priceB. Value placed on the assets in the company’s account books – Book valueC. Value for which the assets can be sold in the open-market – Market priceD. None of the above74. The sources of information for Risk Assessment are as below, exceptA. Proposal formB. Medical report

C. Agent’s reportD. Policy contractING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English7775. Besides recording the applicant’s answers concerning medical history, the reports byexamining doctors includeI Height and weightII Pulse and blood pressure readingsIII Condition of the heart and nervous systemIV Chest and abdomen measurementsA. I and II onlyB. I, III and IVC. I, II and IVD. All of the above76. For a contract to be valid,A. It must have considerationB. It should not be against public policyC. The parties to it must have intention to create a legal relationshipD. All of the above77. Generally, policy endorsements done after the issuance of a policy are forI Changes in the mode of premium paymentII Alterations to the form of the contractIII Imposition or removal of extra premiumsIV Surrender of bonusA. I and II onlyB. I and III onlyC. II and IV onlyD. All of the above78. In general, the following conditions need endorsement at the time of issue of policy:I Those affecting the sum insured or mode of paymentII Those affecting the premium or frequency of paymentIII Those alterations to the form of the contractIV Those incorporating special restrictionsA. I, II and IIIB. I, II and IVC. I, III and IVD. All of the above79. Which of the following is NOT relevant to the common settlement option for an endowmentplan?A. Convert the maturity proceeds into annuityB. Continue deposit the maturity proceeds with the insurerC. Withdraw 90% of the proceed without the letter of probateD. Withdraw the proceed by installments80. In the event of death, the beneficiary or claimant should notify the life insurer and providethe following details, exceptA. Policyholder’s name and identity card numberB. Policy numberC. Date and cause of deathD. Agent’s addressING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English7881. What is the interest rate payable by the insurer on the claim amount if a claim upon thedeath of the policyholder is not paid within 60 days of receipt of intimation of the claim?

A. 5% per annumB. 4% per annumC. 6% per annumD. 8% per annum82. The doctrine of proximate cause is important for which type of claims?A. Death claimsB. Maturity claimsC. Personal accident claimsD. Sickness and permanent health claims83. Policies which accumulate ___________ often carry the right to a policy loanA. BonusB. Cash valuesC. PremiumD. Surrender84. Age last birthday for a life insured born on March 12, 1965, date of the proposal submittedon December 31, 2007 isA. 39B. 40C. 41D. 4285. The interest charges usually arise under the following circumstances:I Outstanding premium charges after grace periodII Policy loan repaymentIII Outstanding premium charges during grace periodIV Reinstatement of policyA. I and II onlyB. I, II and IIIC. I, II and IVD. All of the above86. In explaining the contract, the life insurance intermediary shall:I. Explain only part of the essential provisions of the contract to the prospective policyholderII. Draw attention to any restrictions applying to the policyIII. Give advice to the customer on another company’s policy which has more benefitsIV. Draw attention to the consequent effects of early discontinuanceA. I and IIB. II and IVC. I and IIID. II, III and IV87. To be a successful and professional agent, he must fulfill the following requirement:I Professional attitudeII Proper selling attitudeIII SkillIV KnowledgeA. I, II and IIIB. II, III and IVC. I, III and IVD. All of the aboveING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English7988. The basic life insurance contracts are:I Term insuranceII Whole life insuranceIII AnnuitiesIV Endowment insurance

A. I and IIB. I, II and IVC. II and IVD. All of the above89. Total permanent disability meansA. The life assured’s inability to work effectively for a period of 6 months to a yearB. The life assured loses sight in one eye and stutters when speakingC. The life assured is completely unable to engage in any occupation and to perform any work forremuneration or profit due to bodily injury or disease/illnessD. All of the above90. Which of the following can be sold as a stand alone policy or as a rider to a life insurancepolicy?I Hospitalization cash benefit insuranceII Endowment policyIII Critical Illness or Dread Disease insuranceIV Group insurance policyA. I, II and IIIB. I and IIIC. II, III and IVD. All of the above91. To contain costs and abuses arising from inflated claims, various methods are used byinsurers which include the following, exceptA. Maximum period of compensationB. DeductiblesC. Cashless hospital admissionD. Timeframe during which expenses are payable92. The main types of annuities areI Single life immediate annuityII Last survivor annuityIII Deferred annuityIV Annuity certainA. I, II and III onlyB. I, II and IV onlyC. I, III and IV onlyD. All of the above93. The relationship of an insurer and an agent can be created in the following ways:I By statue (Section 44A, Insurance Act 1963)II By subsequent ratification of an unauthorized actIII By express appointmentIV By implication of the lawA. I, II and IIIB. I, II and IVC. I, III and IVD. All of the aboveING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English8094. This type of annuity provides annuity payments as long as either of two person lives. Itcontinues the same amount of annuity until the death of last survivor.A. Survivorship annuityB. Deferred annuityC. Single life immediate annuityD. Last survivor annuity95. For personal accident policies, the doctrine of ____________ is important, as more than one

condition can operate leading to a claim.A. Leading causeB. Contributing causeC. Proximate causeD. Mortality cause96. The association that controls the quality of life insurance agents by terminating those whodo not fulfill sales and training requirementsA. PIAMB. LIAMC. MIID. NAMLIFA97. Amongst many other risks, general insurance contracts will cover the following, exceptA. AccidentB. Natural deathC. PropertyD. Legal liability98. To discontinue a policy or to have a policy made paid-up and then to effect a new one inanother company or the same company is calledA. TwistingB. RebatingC. UnderwritingD. Prospecting99.100.Regulations pertaining to the basis of surrender value as applicable in Malaysia can befound inA. Section 155 of the Insurance Act 1996B. Section 156 of the Insurance Act 1996C. Section 157 of the Insurance Act 1996D. Section 158 of the Insurance Act 1996Which of the following suggests the possibility of a moral hazard?A. An application by a parent for a Children’s Deferred Insurance for the sum of RM50,000B. An application by a married couple for a joint-life policy for the sum of RM100,000C. An application by a businessman to insure the life of his wealthy girlfriend for RM5,000,000D. An application by a wife to insure the life of her husband for RM60,000ING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English81

Answers for PCE Trial Exam 5 – Parts A & CQ = Question; A = AnswerQ A Q A Q A Q A Q A1 D 21 B 41 B 61 B 81 B2 C 22 C 42 B 62 D 82 C3 B 23 D 43 B 63 D 83 B4 D 24 C 44 A 64 A 84 D5 D 25 D 45 D 65 C 85 C6 C 26 D 46 D 66 D 86 B7 A 27 C 47 B 67 B 87 D8 A 28 B 48 C 68 B 88 D9 D 29 A 49 D 69 D 89 C10 A 30 A 50 B 70 D 90 B11 D 31 C 51 B 71 A 91 C12 B 32 A 52 C 72 D 92 D13 D 33 B 53 A 73 D 93 D

14 D 34 D 54 A 74 D 94 D15 B 35 D 55 B 75 D 95 C16 A 36 B 56 A 76 D 96 B17 C 37 D 57 D 77 D 97 B18 A 38 B 58 B 78 D 98 A19 C 39 B 59 B 79 C 99 A20 A 40 C 60 B 80 D 100 CING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English82ING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English83

CEILLIING Sales AcademyPCE & CEILLI Self Study Pack v.3.0 English84