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TRAD Simulated Exam
- An insurance company which is owned and controlled by the policy owners who also
share in the earnings of the insurance company in the form of dividends is known as a?
- Domestic company
- Stock company
- Foreign company
- Mutual company
Answer: D. Mutual company
- The requirement that the beneficiary should have an insurable interest in the insured is
satisfied if the insured...
- and the beneficiary regularly travel to and from work in a carpool arrangement.
- and the beneficiary are engaged in a similar occupation.
- belongs to the same club as the beneficiary.
- is financially indebted to the beneficiary.
Answer: D. is financially indebted to the beneficiary.
- The widow of your policyholders tells that she does not want a lump sum payment, but
she would like to receive monthly allowance for the rest of her natural life. Which option do you recommend?
- periodic annuity option
- life annuity option
- fixed income option
- fixed period option
Answer: B. life annuity option
- Mr. Sy walked out of his house one night and was never heard of again. His wife
wanted to make a claim on his life insurance policy as she believes that he is dead.Which of the following statements is correct in this case?
- It would require 6 months before the court could declare him dead
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- It would be four years before the court could declare him legally dead.
- It would be seven years before the court could declare him legally dead.
- The company would pay immediately
Answer: C. It would be seven years before the court could declare him legally dead.
5. The following statements concerning insurable interest are correct, except:
- Everyone has an insurable interest in his own life.
- It is deemed to exist if economic loss would occur at the death of the insured.
- It is deemed to exist by virtue of a relationship by blood or by marriage.
- It is important for purposes of underwriting the risk.
Answer: D. It is important for purposes of underwriting the risk.
- A person's human economic value is defined as the...
- Total value of the individual's tax contribution to the national economy
- Total value of the assets and any future earnings derived therefrom.
- Total value of his physical assets
- The amount of capital required to replace family income needs
Answer: B. Total value of the assets and any future earnings derived therefrom.
- The Insurance code specifies that a contract does not take effect unless...
- Payment of the first premium is made to the insurer or its authorized agent
- The insured has named in the policy no fewer than two beneficiaries
- The policy is delivered to an insured, his assignee, agent or beneficiary
- No change has taken place in the insurability of the life to be insured between the time the
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application was completed and the time the policy was
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