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100+ Free IIQE Paper 3 Practice Questions

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Key Facts: IIQE Paper 3 Exam

50 questions

Number of compulsory multiple-choice questions on IIQE Paper III

PEAK Exam Centre - Handbook for Long Term Insurance Examination

75 minutes

Time limit for the entire Paper III exam

PEAK Exam Centre - Handbook for Long Term Insurance Examination

70%

Minimum score needed to pass (35 out of 50 correct answers)

PEAK Exam Centre - Handbook for Long Term Insurance Examination

HK$305 / HK$370

Enrolment fee for paper mode (PPME) and computer screen mode (CSME)

PEAK Exam Centre - Handbook for Long Term Insurance Examination

5 chapters

The core syllabus sections covered in the official PEAK study notes

PEAK Exam Centre - Handbook for Long Term Insurance Examination

21 days

Cooling-off period duration from delivery of policy or notice

Insurance Authority Guideline

English & Chinese

Languages in which the exam paper is offered

PEAK Exam Centre - Handbook for Long Term Insurance Examination

100

Original high-quality practice questions provided in this bank

OpenExamPrep

IIQE Paper III is the Long Term Insurance Examination required for life insurance intermediaries in Hong Kong. It features 50 compulsory multiple-choice questions to be answered in 75 minutes, with a pass mark of 70%. The fee is HK$305 for paper mode and HK$370 for computer screen mode, administered by the VTC PEAK Exam Centre. This 100-question practice bank provides comprehensive mock practice on traditional products, supplementary benefits, policy provisions, and long-term procedures.

Sample IIQE Paper 3 Practice Questions

Try these sample questions to test your IIQE Paper 3 exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1Which of the following describes the core purpose of a life insurance contract?
A.To provide a speculative profit to the policyholder upon the death of the insured
B.To pay a specified sum of money upon the occurrence of a contingent event affecting human life
C.To indemnify the policyholder for the exact depreciation value of physical property
D.To guarantee a fixed return on high-risk stock market investments
Explanation: Life insurance is defined as a contract where the insurer agrees to pay a specified sum of money upon the occurrence of a contingent event affecting human life, such as death, survival, or critical illness. Unlike general insurance, which is typically a contract of indemnity, life insurance policies (except medical expense riders) are valued policies. They are not intended for speculation or property damage compensation.
2In Hong Kong, which of the following is considered a valued policy rather than a contract of indemnity?
A.A travel insurance baggage claim policy
B.A traditional whole life insurance policy
C.A private motor comprehensive policy
D.A medical expense reimbursement rider
Explanation: Traditional life insurance policies, such as whole life policies, are valued policies. Under a valued policy, the insurer agrees to pay a fixed sum of money specified in the contract upon the occurrence of the insured event, regardless of the actual financial loss. Property and liability policies, as well as medical expense reimbursement policies, are indemnity contracts where payouts are restricted to the actual loss.
3An individual has an insurable interest in their own life. Up to what financial limit is this insurable interest deemed to exist under Hong Kong law?
A.Up to the individual's annual salary multiplied by ten
B.Up to a maximum limit of HK$10,000,000
C.An unlimited amount
D.Up to the net asset value of the individual's total estate
Explanation: Every individual is deemed to have an unlimited insurable interest in their own life. Therefore, they may purchase a life insurance policy for any sum insured they choose, subject to the insurer's underwriting guidelines and financial feasibility. There are no statutory limits on the amount of insurable interest a person has in their own life.
4For a life insurance contract to be legally enforceable, when must insurable interest exist between the policyholder and the life insured?
A.Only at the time the policy is issued (inception of the policy)
B.Only at the time of the death of the life insured
C.Both at the inception of the policy and at the time of the death of the life insured
D.At no point, as life insurance is exempt from the requirement of insurable interest
Explanation: In life insurance, insurable interest must exist only at the inception of the contract (when the policy is taken out). It does not need to exist at the time of claim or the death of the insured. This is a critical distinction from general insurance, where insurable interest must exist at the time of the loss.
5A company wishes to purchase a key person life insurance policy on its star research scientist. How is the insurable interest of the company in the scientist's life measured and limited at policy inception?
A.It is unlimited because it is a corporate policy
B.It is limited to the financial loss the company would reasonably incur due to the scientist's death, such as replacement costs and lost profits
C.It is limited to the total salary paid to the scientist since their employment began
D.It is limited to the company's total registered share capital
Explanation: A corporate employer has an insurable interest in the life of a key employee, but it is limited to the estimated financial loss that the company would suffer upon the employee's death. This loss includes the cost of recruiting and training a successor, as well as the loss of profits associated with the employee's specialized skills. Underwriters require financial documentation to justify the sum insured.
6Under Hong Kong law, which of the following relationships automatically creates a statutory insurable interest between the applicant and the life insured, without requiring proof of financial loss?
A.A person and their business partner
B.A husband and his wife
C.A grandparent and their grandchild
D.A creditor and their debtor
Explanation: Under Hong Kong law, spouses are deemed to have an automatic insurable interest in each other's lives. No proof of financial dependency or loss is required to support a policy taken out by one spouse on the other. Other relationships, such as business partners, creditors and debtors, or grandparents and grandchildren, require proof of actual financial interest or financial dependency to establish insurable interest.
7Which principle of insurance requires a life insurance applicant to disclose all material facts to the insurer during the application process?
A.The principle of subrogation
B.The principle of utmost good faith
C.The principle of indemnity
D.The principle of contribution
Explanation: The principle of utmost good faith (uberrimae fidei) requires both parties to an insurance contract to act with extreme honesty. For the applicant, this means disclosing all material facts about their health, lifestyle, and occupation. Failure to do so can render the policy voidable at the option of the insurer.
8In life insurance underwriting, what is a 'material fact'?
A.Any fact that is physical or tangible, such as weight or height
B.Any fact that would influence the judgment of a prudent underwriter in determining whether to accept a risk and at what premium
C.Only medical facts related to diseases that have occurred within the past year
D.Any fact that the applicant believes is important, regardless of the underwriter's view
Explanation: A material fact is any information that would affect the mind of a prudent underwriter in deciding whether to accept a risk, and if so, on what terms and premium rates. In life insurance, this typically includes medical history, family health history, occupational hazards, smoking habits, and dangerous hobbies.
9An applicant for a life insurance policy in Hong Kong fails to disclose a diagnosed heart condition on the proposal form. If the insured dies two months later of an unrelated cause, such as a traffic accident, what action can the insurer take?
A.The insurer must pay the claim in full because the heart condition was not the cause of death
B.The insurer can void the contract and deny the claim due to the non-disclosure of a material fact
C.The insurer must pay 50% of the claim as a compromise
D.The insurer is legally required to pay the claim but can fine the policyholder's estate
Explanation: Under the principle of utmost good faith, a breach of the duty of disclosure (non-disclosure of a material fact like a heart condition) makes the contract voidable at the insurer's option. This remains true even if the cause of death (a traffic accident) is entirely unrelated to the non-disclosed fact. The insurer is entitled to deny the claim and void the policy from inception.
10Under Hong Kong insurance principles, if an applicant innocently misrepresents a fact on a life insurance proposal form, what must the insurer prove to void the contract?
A.The insurer must prove that the misrepresentation was made with intent to deceive
B.The insurer must prove that the misrepresentation concerned a material fact and influenced the underwriter's decision
C.Nothing, as innocent misrepresentations can never be used to void a life policy
D.The insurer must prove that the applicant consulted multiple doctors before applying
Explanation: For an insurer to void a contract based on misrepresentation (whether fraudulent or innocent), the insurer must prove that the misrepresentation concerned a material fact. The insurer must show that the false statement would have influenced a prudent underwriter's decision to accept the risk or set the premium. Intent to deceive is only required to prove fraud, which is harder to establish.

About the IIQE Paper 3 Exam

IIQE Paper III, the Long Term Insurance Examination, is the Hong Kong licensing examination that prospective life insurance intermediaries must pass before carrying on long term insurance business. Administered by the Professional Education and Knowledge Examination Centre of the VTC (PEAK Exam Centre) on behalf of the Insurance Authority, the examination consists of 50 compulsory multiple-choice questions to be completed in 75 minutes. The syllabus covers five core chapters: introduction to life insurance, traditional life insurance products and annuities, supplementary benefits and riders, explaining the life insurance policy, and operational procedures like underwriting, cooling-off periods, policy replacement, and dividend distribution. The paper is offered in both English and Chinese and can be taken in pencil-and-paper or computer-screen formats. Candidates must achieve a score of at least 70% to pass.

Assessment

50 compulsory multiple-choice questions covering traditional products, supplementary riders, provisions, and life procedures. The paper is presented in both English and Chinese.

Time Limit

1 hour and 15 minutes (75 minutes) for all 50 multiple-choice questions.

Passing Score

70% minimum (35 out of 50 correct answers). Results are reported only as PASS or FAIL.

Exam Fee

HK$305 for the Pencil-and-Paper Mode (PPME) and HK$370 for the Computer Screen Mode (CSME). Fees are non-refundable and non-transferable. (Vocational Training Council (VTC) PEAK Exam Centre, on behalf of the Insurance Authority (IA))

IIQE Paper 3 Exam Content Outline

20%

Introduction to Life Insurance & Principles

Basic definitions, needs for life insurance, and fundamental principles (insurable interest, duty of disclosure, utmost good faith) applied to long term insurance policies.

25%

Traditional Products & Annuities

Detailed coverage of traditional products (term life, whole life, endowment, universal life) and annuity contracts, including their structures, uses, and options.

20%

Supplementary Benefits & Riders

Understanding common riders such as disability income, waiver of premium, accidental death and dismemberment, medical expenses, critical illness, and long-term care.

20%

Explaining the Life Insurance Policy

Key provisions and clauses: grace periods, incontestability, suicide clauses, dividend options, settlement options, nonforfeiture options, and beneficiary designations.

15%

Life Insurance Procedures

Operational aspects: application, underwriting (medical vs non-medical), premium payment, cooling-off periods, policy replacement guidelines, and benefit illustrations.

How to Pass the IIQE Paper 3 Exam

What You Need to Know

  • Passing score: 70% minimum (35 out of 50 correct answers). Results are reported only as PASS or FAIL.
  • Assessment: 50 compulsory multiple-choice questions covering traditional products, supplementary riders, provisions, and life procedures. The paper is presented in both English and Chinese.
  • Time limit: 1 hour and 15 minutes (75 minutes) for all 50 multiple-choice questions.
  • Exam fee: HK$305 for the Pencil-and-Paper Mode (PPME) and HK$370 for the Computer Screen Mode (CSME). Fees are non-refundable and non-transferable.

Keys to Passing

  • Complete 500+ practice questions
  • Score 80%+ consistently before scheduling
  • Focus on highest-weighted sections
  • Use our AI tutor for tough concepts

IIQE Paper 3 Study Tips from Top Performers

1Ensure you master the nonforfeiture options (cash surrender, paid-up insurance, extended term insurance) as they are frequently tested and can be confusing.
2Understand the difference between the dividend options (dividend accumulate at interest, premium reduction, paid-up additions) and settlement options.
3Review the cooling-off period rules thoroughly: 21 calendar days from policy or cooling-off notice delivery, whichever is earlier.
4Know the details of the policy replacement process, including the requirement to complete the Customer Protection Declaration Form.
5Distinguish between traditional life policies (term, whole life, endowment) and universal life/annuities in terms of savings and flexibility features.
6Study underwriting factors, premium pricing (mortality, interest, loading), and the duty of disclosure under the utmost good faith principle.

Frequently Asked Questions

How many questions are on IIQE Paper III and how long is it?

Paper III consists of 50 compulsory multiple-choice questions to be answered in 1 hour and 15 minutes (75 minutes). The paper is available in both English and Chinese.

What is the pass mark for the Long Term Insurance Examination?

Candidates must achieve at least 70% (35 out of 50 questions answered correctly) to pass. The results are reported as PASS or FAIL only.

What topics are covered in IIQE Paper III?

The exam covers introduction to life insurance, traditional life insurance products and annuities, supplementary benefits, policy provisions and clauses, and life insurance procedures.

Who administers the IIQE Paper III exam and how much does it cost?

The exam is administered by the Vocational Training Council (VTC) PEAK Exam Centre on behalf of the Insurance Authority. The fee is HK$305 for the Pencil-and-Paper Mode (PPME) and HK$370 for the Computer Screen Mode (CSME).

Do I need to pass Paper III to sell life insurance in Hong Kong?

Yes, passing Paper III (together with the core Paper I) is a mandatory requirement for licensing as a long term (life) insurance intermediary in Hong Kong.

Are these official questions from the Insurance Authority or PEAK?

No. These are original practice questions created by OpenExamPrep, designed to match the current VTC PEAK study notes and syllabus for Paper III.