VLI #1

Variable life insurance policy owners may make withdrawals in terms of

• fixed monetary amount only through reduction of the life cover sum assured

• number of units through cancellation of units

• number of units or fixed monetary amount through cancellation of units

• number of units or fixed monetary amount through reduction of the life cover sum assured

Which of the ff statements about flexibility feature of variable life policies is false?

• Policy holders have the flexibility of switching from one fund to another provided it satisfies the company switching's criteria

• Policy holders have the flexibility of increasing or decreasing the premiums for regular premium variable life policies

• Policy holders can take loans against their variable life up to the entire withdrawal value of their policy

• Policy holders may request for a partial withdrawal of the policy and the withdrawal amount will be met by cashing the units at the bid price

The investment returns under variable life insurance policy

I. are not guaranteed

Ii. are assured

III. are linked to the performance of the investment fund managed by the life insurance company

IV. fluctuate according to the rise and fall of market places

• I, II, and III

• I, II, and IV

• I, III, and IV

• II, III, and IV

Which of the following statements is true?

I. The policy value of variable life policies is determined by the offer price at the time valuation

II. The policy value of endowment policies is the cash value plus accumulated dividends less any outstanding loans due at the time of the surrender

III. the life company needs to maintain a separate account for variable life policies distinct from the general account

• I & II

• I, II & III

• I & III

• II & III

Which of the ff statements is false?

• misrepresentation is a specific form of twisting

• rebating is to offer a prospect inducement to puchase a policy

• twisting is a specific form of misrepresentation

• switching is a facility allowing the policyholders to switch another valriable life funds offered by the company

Which of the ff statements about variable life policies is TRUE?

I. offer price is used to determine the number of units to be credited to the account

II. The margin between the bid and offer price is used to cover the management cost of the policy

III. the policy value is calculated based on the bid price of units allocated into the policy

• I, II & III

• I, & II

• I, & III

• II & III

What is the most suitable investment instrument for an investor who is interested in protecting his principal and receiving a steady stream of income?

• equities

• warrants

• variable life policies

• fixed income securities

What are the disadvantages of investing in common shares?

I. dividends are paid more than fixed rates

II. investors are exposed to market and specific risks

III. shares can become worthless if company becomes insolvent

• I & II

• I & III

• II & III

• I, II & III

Which of the following statements about the difference between variable life policies and endowment policies are FALSE?

I. the policy value of variable life policies directly reflect the performance of the fund of the life company

II. the premiums and benefits of the endowment policies are described at the inception of the policy whereas variable life are flexible as the account driven

III. the benefits and risks of variable life and endowment policies directly accure to the policyholders

• I & II

• I, II & III

• I & III

• II & III

Which of the ff statements about twisting is FALSE?

• Twisting is a special form of misrepresentation

• it refers to an agents including a policyholder to discontinue policy with another company without disclosing the disadvantage of doing so

• it includes misleading or incomplete comparison of policies

• it refers to an agent offering a prospect special inducement to purchase a policy