PCEA QUESTIONS

1) Which one of the following is not a non-forfeiture provision?

A paid-up policy

B extended term insurance

C installment payment over a fixed period

D automatic premium loan

2) Which of the following is NOT a characteristic of insurable risk?

A A large number of similar risks

B reasonable premium

C insurable interest

D illegal and against public policy

3) The agent’s duties are

A to obey the instructions of the principal

B to use proper care and skill in exercising his authority

C to act honestly and not in any way that is detrimental to the principals interest

D all of the above

4) The function of the financial mediation bureau ( FMB ) is to

A serve as central registry for all health polices issued on a medically sub-standard basis

B inform its members of specific underwriting actions taken by its members

C assist its members in detecting non-disclosures of facts by applicants

D provide an independent service for dealing with disputes between insurers and personal
policyholders.
5) The following are the basic underwriting measures often adopted in cases presenting poor
physical hazard EXCEPT

A charging lower premium

B imposing suitable policy exclusions on the hazard

C charging extra premium

D deterring the acceptance date

6) Which of the following are appointed by insurance companies to represent them?

A reinsurers

B insurers

C insurance brokers

D insurance agents

7) Many policies contain a provision that the policy shall not immediately lapse for
non-payment of premium if it has acquired a

A cash value

B non-lapse value

C letter of non-lapse provision

D policy loan

8) Which of the following statements is correct?

A speculative risk are always catastrophic in nature

B pure risks are uninsurable

C there is the possibility of a gain in a speculative risk

D speculative risks are insurable

9) The age of the Life to the insured is a very important factor in determining

i the rate of premium

ii the and of medical evidence required

iii the commencement date of the policy

iv whether the policy can be granted

A i,ii,iii and iv

B i,ii and iii

C i,ii and iv

10) Property which is partially saved from a loss or damage is called

A left over

B constructive loss

C salvage

D partial loss goods

11) When an agent invites any person or individual to make an offer or proposal to enter into a
contract of insurance, the agent is NOT required to discourse

A the amount of premium charged by the licensed insurer

B the name of the licensed insurer

C the leadership with the insurer

D any discount offered by the licensed insurer

12) Why are ethical conduct and behavior crucial?

A to increase sales of insurance policies

B to preserve the trust on which insurance transactions are based and to preserve public trust in the
insurance industry

C to abide by Bank Negara’s code of ethics for the insurance industry

D to prevent an increase in claims

13) The common health insurer underwriting decisions are

A standard ( issued exactly as applied for ),declined, postponed.

B standard ( issued exactly as applied for ), postponed, sub-standard (issued on other than applied for
basis )

C standard ( issued exactly as applied for), declined, sub-standard ( issued on other than applied for
basis ).

D standard ( issued exactly as applied for ), postponed, change plan.

14) Which of the following is a common requirement for the processing of both death and maturity
claims ?

A proof of age

B proof of title and ownership

C proof of death

D proof of age, title and ownership

15) Which of the following modes of premium payment are allowed under the ordinary life policy ?

i . yearly

ii .semi-annually

iii.quarterty

iv. monthly

v . weekly

A i,ii and iv

B i,ii,iii and iv

C i,ii,iv and v

D i,ii,iii,iv and v
16) In which of the following situations does insurable interest NOT exist ?

A A husband insuring the life of his wife.

B A creditor insuring the life of his debtor.

C A brother insuring the life of his sister.

D A father insuring the life of his child.

17) If death occurs accidentally or suddenly without a known cause or prior medical attention, which
of the following the documents that can be used to show proof of death?

A Medical certificate

B Certificate of death

C Post mortem report

D statutory declaration

18) are NOT categorized as being in hazardous occupations.

A quarry workers

B office workers

C construction laborers

D race car drivers

19) Which of the following statements is TRUE regarding a Term Policy?

A it provides protection for an unlimited period of time.

B premiums are comparatively higher

C a small cash value is payable at the end of the policy term.

D the sum assured is not payable if the life assured survives

20) What constitutes a consideration on the part of the insurer in an insurance contract?

A the promise to collect premium from agents.

B the promise to indemnity the insured.

C the promise to collect premium from the insured

D the promise that no accident will occur to the subject matter of insurance.

21) Conditions in a policy relates to :

A the rights and duties of the insurer and insured

B the rights to reject any claim which is outside the scope of cover.

C the rights of the claimant and agent.

D the rights of the insured in the event of claim.

22) Restrictions on the scope of the Health Insurance coverage are known as

A condition

B exclusion

C the schedule of benefits

D the operative clause

23) The cause of a loss is termed as

A chance

B peril

C risk

D hazard

24) The possibility of a house being burnt down by fire is an example of a

risk.

A subjective

B pure

C moderate

D speculative
25) A regular premium policy acquires surrender value after the policyholder has paid the premiums
continuously for years.

A two

B three

C four

D five

26) Group health premium rates may be influenced by which of the following factors ?

i . age

ii . financial situation

iii. occupation

A i and ii

B i,ii and iii

C i and iii

D iii only

27) The role of the agent is to explain the main provisions of the insurance contract by drawing the
client’s attention to

i . any extra charges imposed and purpose of such charges.

ii. other insurance policies with the lowest premiums available in the market.

iii. policy restrictions ,limitations and exclusions applicable.

iv. scope of coverage, terms and conditions of the policy.

A iii and iv C ii,iii and iv

B i,ii and iii D i,iii and iv

28) The law provides that the dependents of a missing person can approach the court with request to
pronounce such a person death. What is the statutory waiting period prescribed for this purpose ?

a 4 years

b 5 years

c 7 years

d 3 years
29) Which of the following is an INCORRECT description of Implied Actual Authority?

A acting in good faith and interpreting express instructions in a reasonable way.

B Doing anything which is incidental to the carrying out of the agent's express instructions.

C performing those acts which are usually performed by persons in the agent's position.

D performing those acts which are usually performed or usual in a particular trade or profession.

30) The four main classes of Health Insurance Contract are

A home service, clinical, maternity and dental insurance .

B medical income, hospital income insurance, medical expenses and critical illness insurance.

C disability income, hospital income insurance, medical expenses and critical illness insurance.

D dental, medical expenses, maternity and home service insurance

31) Upon survival of the assured at the end of the policy term the payment of policy proceeds is
known as a …………..claim

A death

B medical

C disability

D maturity

32) If the agent is authorized to collect monies in accordance with the terms of his agency
appointment, the agent shall NOT

A keep a proper account of all financial transactions with his policy owners

B remit any such monies so collected to the insurer in strict conformity with his agency appointment.

C use the money collected for agency use until such time the premiums are due for payment.

D acknowledge receipt of all money received in connection with an insurance policy and distinguish
the premium from any other payment.
33) Which one of the following is NOT an important consideration in normal underwriting or selection
of a life insurance risk ?

A moral hazard

B over-insurance

C under-insurance

D physical hazard

34) The purpose of the personal data protection act 2010 (PDPA) includes the following

i . to protect sensitive data from being misused

ii. to facilitate an effective response to consumers.

iii. to provide financial education to consumers.

iv . to protect consumer rights.

ANS : i,iv

35) Under common law, insurers can exercise their subrogation rights

A at any time

B after having settled the insured's claim

C at no time

D before settled the insured’s claim

36) Which of the following provides for an annuitant to put in a lump sum at entry and on attainment
of a specified age ,the insurer will pay an annuity of a specified amount until death ?

a single live annuity

b guaranteed immediate annuity

c deferred annuity

d last survivor annuity

37) A life policy shall NOT be invalidated by reason of only

A misrepresentation of condition of health

B misrepresentation of medical history

C misstatement of age

D non-disclosure of hazardous hobbies

38) A participating policy gives the policyholder the right to

A participate in the net profits earned by the company

B borrow money from the life insurance company.

C participate in divisible surplus of the life insurance company

D vote in the annual shareholders meeting

39) An insurable risk must have the following characteristics

i . pure risk and speculative risk

ii .catastrophic loss which is widespread

iii. particular risk capable of being measured in term of financial value

iv. fortutous risk with homogeneous exposures

A i,ii and iii

B ii,iii and iv

C i,iii and iv

D i,ii,iii and iv

40) Standard mortality tables are derived from the

A combined mortality experience of life insurers operating in the territory

B mortality experience of the policyholders of the insurer

C mortality experience of policyholders according to race

D mortality experience according to occupation

41) The following documents are essential to process a Total and Permanent Disability (TPD) claim

i. the original policy documents

ii. the discharge of liability form

iii. a duly completed TPD claim form

iv. a total and permanent disability medical report

A i,ii and iii C ii, iii and iv

B I,iii and iv D I,ii,iii and iv

42) Premium for participating policies are higher due to the right to share in the profits of the
operation of a life insurance company. This additional premium is known as

A profit premium

B net premium

D extra loading

43) A participating policy gives the policy holder the right to

A participate in the net profit earn by the company

B borrow money from the life insurance company

C participate in divisible surplus of the life insurance company

D vote in the annual shareholders meeting

44) An insurable risk must have the following characteristics

i. Pure risk and not speculative risk

ii. catastrophic loss which is widespread

iii. Particular risk capable of being measured in terms of financial value

iv. Fortuitous risk with homogeneous exposures

A i,ii and iii C i,iii and iv

B ii,iii and iv D i,ii,iii and iv

45) Material fact is define as a

A fact which would affect the judgement of a prudent underwriter in underwriting a proposed risk

B fact which comes to the knowledge of the insurer after negotiations

C fact which is common knowledge to both the insured and the insurer

D all the above

46) After completing and signing the proposal form for a whole life insurance your client asks you
when he would be covered for natural death and your reply will be when the

A the insurance company issues a letter of acceptance

B the insurance company receives a duly completed forms

C the insurance company receives the first instalment premium after the insurance of the
acceptance letter

D whole life policy has been issued and delivered to him

47) Risk can be classified as:

A pure and fundamental risks

B speculative and particular risks

C pure and speculative risks

D Fundamental and particular risks/ pure and speculative risks

48) The policy owner may return his policy to the insurer within_______ after delivery of a life policy if
he is not satisfied with the terms and conditions of the policy

A 7 days

B 15 Days

C 21 Days

D 30 Days

49) The payment of the money by the insured to a common fund is called

A fund money

B Shares

C interest

D Premium

50) A maturity Claims arises upon the

A Death of the life insured while the policy is inforce

B Survival of the life Assured up to the stipulated date of maturity of the policy

C hospitalisation of the life assured

D Suffering of a dreadful disease by the life insured