CMFAS Life Insurance M5 6

Question 1

What is the role of the Life Insurance Association (LIA) of Singapore?

Accepted Answer

To represent and promote the interests of the life insurance industry

Answer

LIA represents the life insurance industry in Singapore, setting professional standards, promoting best practices, and liaising with regulators.

Question 2

What is a policy loan?

Accepted Answer

A loan taken against the cash value of a life insurance policy

Answer

A policy loan allows the policyholder to borrow money from the insurer using the cash value of their life insurance policy as collateral.

Question 3

What is the cooling-off period under the Financial Advisers Act?

Accepted Answer

14 calendar days

Answer

Under the Financial Advisers Act, there is a 14-calendar-day cooling-off period for certain investment products sold by financial advisers.

Question 4

What happens when a life insurance policyholder stops paying premiums?

Accepted Answer

The policy may lapse or become paid-up depending on its type and cash value

Answer

If premiums stop, the policy enters a grace period. After that, it may lapse or, if it has sufficient cash value, be converted to a paid-up policy with reduced benefits.

Question 5

What is an annuity?

Accepted Answer

A financial product that provides regular payments for life or a specified period

Answer

An annuity provides a stream of regular payments to the annuitant, either for life or for a fixed period, typically used for retirement income.

CMFAS Practice Test

CMFAS Practice Test

CMFAS Life Insurance M5 6