CMFAS M9 – Life Insurance And Investment-Linked Policies Set Two

Which of the following statement(s) is(are) true about renewable option of insurance policy?
I. Upon renewal, the policy will have the same policy term and death benefit as the original policy.
II. Renewal is allowed, as long as the expiry date of the policy does not exceed a specified age.
III. This option gives the life insured the right to renew his policy at the end of the policy term, without evidence of insurability.
IV. The premium becomes much lower in proportion to the insurance coverage in the later years.

Which of the following statement(s) is(are) true about YRT?
I. Each time when the policy is renewed, the coverage becomes more costly.
II. Renewal of a YRT policy can go on indefinitely, or the insurer will suffer adverse selection
III. When renewed, the premium of a YRT policy is based on the attained age of the life insured.
IV. When a YRT policy is renewed, the premium increases.

Which of the following statement(s) is(are) true about Reversionary Bonus (RB)?
I. The addition is in proportion to the sum assured.
II. Under this method, the bonus is in the form of an addition to the sum assured, irrespective of the age of the insured, or the period that the policy has been in force.
III. The amount of bonus is declared annually and credited to each policy on its anniversary date.
IV. Reversionary Bonus is also known as Annual Bonus.

Which of the following statement(s) is (are) true about FIDReC?
I. FIDReC was officially launched on 31 August 2015 by the Monetary Authority of Singapore.
II. FIDReC was initiated by the financial sector to make its services more professional, transparent, customer focused and service oriented.
III. FIDReC’s mission is to provide an affordable alternative dispute resolution scheme that is independent and impartial, so as to encourage and assist in the resolution of disputes between consumers and financial institutions in an amicable and fair manner.
IV. FIDReC provides an affordable and accessible one-stop avenue for consumers to resolve their disputes with financial institutions.

Which are the correct form of the jurisdiction of FIDReC in adjudicating disputes between consumers and financial institutions?
I. For claims between insureds and insurance companies: up to S$100,000.
II. For claims between insureds and insurance companies: up to S$1,000,000.
III. For disputes between banks and consumers, capital market disputes and all other disputes (including third-party claims and market conduct claims): up to S$100,000.
IV. For disputes between banks and consumers, capital market disputes and all other disputes (including third-party claims and market conduct claims): up to S$1,000,000..

Which of the following is(are) true about Surrendering The Policy For Its Cash Value?
I. This option makes sense when the need for any additional coverage under this policy has ceased.
II. The policy lists the guaranteed cash values at each policy anniversary, assuming all the premiums have been paid.
III. The cash surrender option is the right to discontinue life insurance in force in return for its net cash value.
IV. When the protection terminates, the insurer still has some obligation under the policy.

Which of the following statement(s) is(are) true about insurance?
I. Insurance contracts restore the insureds financially in whole or in part if losses occur.
II. Insurance is always socially productive.
III. In insurance, the insurer and the insured both have a common interest in the prevention or delay of a loss.
IV. Insurance creates a new speculative risk.

When an insurer receives an application for insurance, the insurer must assess the degree of risk that it will take on if it agrees to issue the policy. The insurer will need to carefully review each application to assess properly the degree of risk the insurer is assuming for the policies it issues. What is this tendency called?
I. Adverse selection
II. Anti-selection
III. Selection against the insurer
IV. Selection of risks

In Group Term Life Insurance policy, on the happening which of the following event(s) the coverage for each individual employee usually terminates?
I. When the employee reaches a specified age (e.g. 65 years of age).
II. When the employee is on temporary leave of absence, vacation without pay, sick or injured for more than 12 months.
III. When the employer does not pay up the premium within the grace period.
IV. When the insurer or the employer decides not to continue with the policy.

Which of the following statement isn’t true about annuity?

Which of the following statement(s) is(are) not true about term insurance policy?
I. A Term Insurance policy can provide the funds needed to meet the funeral expenses.
II. A Term Insurance policy can provide the funds needed to provide a sum of money, to take care of his dependants.
III. A Term Insurance can be used to pay off any outstanding loan that the client may have.
IV. A Term Insurance can be used to accumulate the funds necessary to finance one’s children’s education in the future.

Which of the following statement(s) is (are) not true about FIDReC?
I. FIDReC’s mission is to provide an affordable alternative dispute resolution scheme that is independent and impartial, so as to encourage and assist in the resolution of disputes between consumers and financial institutions in an amicable and fair manner.
II. FIDReC was initiated by the financial sector to make its services more professional, transparent, customer focused and service oriented.
III. It was officially launched on 31 August 2015 by the Monetary Authority of Singapore.
IV. FIDReC provides an affordable and accessible one-stop avenue for consumers to resolve their disputes with financial institutions.

Which of the following statement(s) is (are) true about money sense programme?
I. The MoneySENSE programme covers three tiers of financial literacy.
II. The MoneySENSE brings together industry and public sector initiatives to enhance the basic financial literacy of consumers.
III. The MoneySENSE programme was launched in 2003.
IV. The MoneySENSE programme provides an affordable avenue for consumers who do not have the resources to go to court or who do not want to pay hefty legal fees.

Which of the following outcome is involved in pure risk?

Which of the following statement(s) are true for the role of Interest?

I. The fund will invest in investment grade corporate bonds and government securities denominated in Singapore dollars
II. The fact is that dollars to be paid or received in different time periods have different values
III. The fact is that dollars to be paid or received in different time periods have different values
IV. Interest can be viewed as the cost of renting money and is paid by the borrower to the lender

Which of the following statement(s) are true for Simple Interest?

I. The fund will invest in investment grade corporate bonds and government securities denominated in Singapore dollars
II. Simple interest is computed by applying an interest rate to only an original principal sum
III. The fact is that dollars to be paid or received in different time periods have different values
IV. Interest can be viewed as the cost of renting money, and is paid by the borrower to the lender

Which of the following statement(s) are true for variations of annuity policies?

I. Payout options
II. Bonus entitlement
III. Number of lives covered under the policy
IV. Decreasing rate annuity

Which of the following statement(s) are the benefits of investing in investment-linked sub-funds?

I. Diversification of investment portfolio
II. Professional expertise
III. Different investment fund options
IV. Transactions with difficulty

Which of the following statement(s) are true for the basics of the time value of money?

I. The fund will invest in investment grade corporate bonds and government securities denominated in Singapore dollars
II. The fact is that dollars to be paid or received in different time periods have different values
III. The fact is that dollars to be paid or received in different time periods have different values
IV. The TVM concept is used by financial institutions such as insurance companies to make decisions daily

Which of the following methods are the types of fees and charges that may incur for an ILP?

I. No Initial sales charge
II. Initial sales charge
III. Sub-fund management fee
IV. Policy fees