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Pre-Contract Examination for Insurance Agents: Basic and Life Insurance (AC) Free Practice Test

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The AC route combines 50 basic insurance and 50 life insurance questions in two hours, with a 50% pass mark. Confirm current booking arrangements with Aii. Principal appointment and LIAM registration are also required.

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100 real exam Qs120 min exam50% pass mark
Question 1 of 200/0 correct
A parent worries about losing income through premature death. How is this risk classified?

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One complete free lesson for Pre-Contract Examination for Insurance Agents: Basic and Life Insurance (AC). No account or payment needed.

Protection Gap: Give Every Resource a Job

Calculate a family's death-protection gap, distinguish temporary income needs from savings goals, and test whether existing cover is actually usable.

Read the lesson transcript

A savings promise can hide a protection gap

Farah supports two children and has a housing loan. Her adviser presents a policy with an attractive maturity illustration, but Farah asks a different question: what money would her family need if she died today? In this original PCEIA life scenario, assume the family needs three hundred thousand ringgit for future support and one hundred eighty thousand to clear debts. These are agreed planning targets, not universal formulas. First calculate the need before comparing product features.

Count resources only when they are usable

The total target is four hundred eighty thousand ringgit. Farah already has one hundred fifty thousand of reliable individual death cover and fifty thousand of liquid savings. Assume the savings can be used for this purpose without compromising another essential need. Deducting both resources leaves two hundred eighty thousand ringgit of additional protection. Do not also subtract the same savings as a second asset elsewhere. Every resource needs one clear role in the calculation.

Match the duration of the problem

Now ask how long each need lasts. Support for young children may decline as they become independent, while a debt follows its own repayment schedule. Term assurance can address a defined period of death protection. An endowment adds a contractual maturity objective, and whole life is structured for longer protection under its terms. None is automatically the best answer. Compare the required benefits, duration, guarantees and sustainable premium against Farah's circumstances before selecting a product.

The exam trap: count uncertain cover as permanent

Suppose Farah also mentions employer group cover of one hundred thousand ringgit. It is tempting to reduce the gap immediately to one hundred eighty thousand. First check whether that cover continues after she changes jobs and whether the family's intended protection period exceeds her employment. In this example, assume the employer cover ends when she leaves and there is no guaranteed continuation option. It may help today, but it does not reliably close a long-term planning gap.

Mini-check: protect the emergency reserve

Change one fact. Farah decides that thirty thousand of the fifty thousand savings must remain as a separate emergency reserve and is unavailable for the death-planning target. What is the revised gap? Only twenty thousand remains usable. Four hundred eighty thousand, less one hundred fifty thousand existing cover, less twenty thousand savings, gives three hundred ten thousand ringgit. The gap rises by thirty thousand because an available resource fell, without any change to the family's total target.

Carry the resource test into the next case

Use a repeatable sequence: define the financial consequence, estimate its amount and duration, identify reliable resources, and calculate the remaining gap. Then test affordability and explain the selected contract accurately. Keep death protection separate from projected savings and count each resource once. This approach connects insurance concepts, life products and ethical advice in the AC route. A persuasive illustration is useful only when the customer also understands what is covered, what is uncertain and what remains unfunded.

In this lesson

  1. 1.A savings promise can hide a protection gap
  2. 2.Count resources only when they are usable
  3. 3.Match the duration of the problem
  4. 4.The exam trap: count uncertain cover as permanent
  5. 5.Mini-check: protect the emergency reserve
  6. 6.Carry the resource test into the next case

Aligned to the Official programme syllabus. Independent teaching with original examples; this focused lesson does not cover the entire syllabus.

Exam Syllabus

Core Pre-Contract Examination for Insurance Agents: Basic and Life Insurance (AC) topics

01

Risk and Insurance Fundamentals

Risk pooling | Pure and speculative risk | Perils and hazards | Risk control

02

Insurance Contracts and Disclosure

Consumer disclosure | Insurable interest | Policy terms | Agency authority

03

Life Insurance Products and Benefits

Term assurance | Whole life | Endowments | Riders and annuities

04

Life Underwriting and Policy Administration

Risk selection | Premiums and grace periods | Surrender and paid-up options | Assignment

05

Medical and Health Insurance

Indemnity medical cover | Exclusions and limits | Deductibles and coinsurance | Claims evidence

06

Needs Analysis and Agent Conduct

Protection gaps | Affordability | Replacement risks | Fair dealing

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Which examination route does this cover?

PCEIA AC combines basic insurance and life insurance. It is distinct from the AB general route and from investment-linked examinations.

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No. Examination success is an entry qualification. Appointment by a relevant principal and registration with LIAM, together with applicable requirements, must be completed before transacting business.

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