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Variable life insurance policyowners may make withdrawals in terms of ___________

• A. Number of units or fixed monetary amount through cancellation of units.

• B. Number of units or monetary amount through reduction of the life cover sum assured.

• C. Fixed monetary amount only through reduction of the life cover sum assured

• D. Number of units through cancellation of units

2. Which of the following statements about the flexibility features of variable life policies is FALSE?

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

• B. Policyholder can take loans against their variable life policies up to the entire withdrawal value of their policies.

• C. Policyholders have the flexibility of switching from one fund to another provided it satisfied the company’s switching criteria.

• D. Policyholders have the flexibility of increasing or decreasing their premiums for regular premiums variable life policies

3. 3. Which of the following statements is FALSE?

• A. Rebating is to offer a prospect a special inducement to purchase a policy

• B. Twisting is a specific form of misrepresentation

• C. Misrepresentation is a specific form of twisting

• D. Switching is a facility allowing policyholders to switch to another variable life fund offered by the company.

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

• A. Equities

• B. Warrants

• C. Variable life policies

• D. Fixed income securities

5. 5. Which of the following statements about twisting is FALSE?

• A. Twisting is a special form of misrepresentation

• B. It refers to an agent inducing a policyholder to discontinue policy with another company without disclosing the disadvantage of doing so .

• C. It includes misleading or incomplete comparison of policies.

• D. It refers to an agent offering a prospect a special inducement to purchase a policy

6. Mr. Juan dela Cruz is currently earning P30,000/month. He is 35 years old and has a reasonable amount of savings. He has a moderate level for risk tolerance. What kind of policy would you recommend for him to buy?

• A. Participating endowment

• B. Variable life policies

• C. Participating whole life

• D. Annuities

7. 7. A unit trust is______________________

• A. Established by a trust deed which enables a trustee to hold the pool of money and assets in trust on behalf of the investor

• B. A close-end fund and does not have to dispose of its assets if a large number of investors sell their shares

• C. One whereby investors buy units in the trust itself and not from the shares of the company.

• D. An organization registered under the SECURITY AND EXCHANGE COMMISSION (SEC) which usually invest in a wide range of equities and other investments

(ref.17) 8. Which of the following BEST describes the policy benefits of variable life policies?

• A. The policy benefits are payable only for death or disability

• B. The policy benefits will depend on the long-term performance of the life company

• C. The policy benefits are directly linked to the investment performance of the underlying

• D. The policy benefits are guaranteed.

(ref.18) 9. Why is it important that the customer must understand the sales proposal in full?

• A. Because the insurer does not guarantee any return

• B. Because the impact of changes in an investment condition on variable life policy is borne solely by the customer

• C. Because the agent may give the wrong recommendations

• D. Because the policyholders expects higher returns

(ref.20) 10. Which one of the following statements is FALSE?

• A. Variable life insurance policies offer investors policies with values indirectly linked to the investment performance of the life company

• B. A Life company will carry out a valuation of its funds yearly and any surplus may be allocated to participating policyholders as cash dividends

• C. Both Whole Life and Endowment policies can be used as an investment media with benefits that become payable at a future date

• D. The investment element of variable life policies varies according to underlying assets of the portfolio