Online Access Free M05 Practice Test

In accordance with the principle of good faith, which facts must a potential policyholder disclose to the insurer when applying for insurance?

• A.Any facts which are considered material to the risk.
• B.Any facts which are in the public domain.
• C.Only those facts considered likely to reduce the cost of cover
• D.Any facts of law.

John has a whole of life policy and has recently been diagnosed with cancer. When, if at all. must he disclose this to his insurer?

• A.At the date of the next premium payment.
• B.He does not need to disclose this.
• C.Immediately, but only if the diagnosis is terminal.
• D.Immediately, irrespective of prognosis.

What is the role of a condition precedent in an insurance policy?

• A.It defines the scope of coverage for the policyholder
• B.It outlines exclusions from coverage
• C.It ensures that the insurer will cover all risks associated with a policy
• D.It is a requirement that must be met before the insurer is liable for a claim

What type of reduction is sometimes applied to the replacement cost of an item under an insurance policy claim in order to reflect the application of indemnity?

• A.Loss of interest.
• B.Wear and tear.
• C.Brokerage.
• D.An excess.

When completing a proposal form, Tom declares that he has two spent speeding convictions. How, if at all, will the spent convictions affect an underwriter's decision to write the risk?

• A.They will not be considered as this is not an underwriting factor in motor insurance risk assessment.
• B.They will be ignored in accordance with the provisions of the Rehabilitation of Offenders Act 1974.
• C.They will only be considered if Tom had a further speeding conviction in the last 12 months.
• D.They will be classed as relevant information and will affect the premium.