Nilo 2

The switching facility under variable life insurance policies is a very useful _____

• For the purpose of profit planning by the life policies

• For the purpose of assets planning by the trustee

• For the purpose of sales planning by the fund managers

• For the purpose of financial planning by the policy owners

The investment returns under variable life insurance policy _______________

I. Are not guaranteed
II. Are assured
III. Are linked to the performance to of the investment fund managed by the life insurance company
IV. Fluctuate according to the rise and fall of market prices

• I, II and III

• I, II and IV

• I, III and IV

• II, III and IV

Which of the following statements about investment objectives is false?

• People invest money in fixed deposits to produce high and guaranteed returns

• People invest money to enhance a comfortable standard of living

• People invest money to provide funds for higher education for their children

• Investment in commodities has no regular income

A unit trust is ____________________

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

• A close-end fund and does not have to dispose off if the large number investors sell their shares

• One whereby the investor buys units in the trust itself and not share in the company

• An organization registered under the SECURITY EXCHANGE COMMISSION (SEC) which usually invests in a wide range of equities and other investment

In risk-return profile of cash funds, bond funds, balanced funds, managed funds and equity funds, a risk-return graph will show that _____________
I. Higher return normally comes with lower risk
II. Higher return normally comes with higher risk
III. At the top end of the graph are the equity funds
IV. The relatively risk-less cash funds sit at the bottom end of the graph

• I, II, & III

• II, III, & IV

• I, II & IV

• I, III, & IV

The flexibility benefit of investing in variable life funds include _____________:
I. Policy owners can easily change the level of sum assured and switch their investment between funds
II. Policy owners can easily take premium holidays and add single premium to Top – ups
III. Variable life insurance policies offer the potential for higher returns
IV. Traditional participating policies aim to produce a steady return by smoothing out market fluctuation

• All of the above

• I, II & III

• I, II & IV

• I, III & IV

Which of the following statements about rebating are TRUE?
I. Rebating is prohibited under the Insurance Code
II. Rebating deals with offering the prospect a special inducement to purchase a policy
III. Rebating will enhance the sales performance and uphold the prestige of an agent.

• I & II

• I & III

• II & III

The benefits of investing in variable life funds include ___________________
I. Policy owners have access to pooled or diversified portfolios of investment
II. Policy owners can easily change the level of the premium payments as the product design of variable life policies have clear structures which cater separately for investment and insurance protection
III. Policy owners can gain access to variable life funds managed by professional investment managers with proven track records
IV. Policy owners can buy a variable life insurance policy only with a high initial investment

• I,II & IV

• I, III, & IV

• I, II & III

• II, III & IV

Which of the following statements describe the differences between variable life products and participating products?
I. Variable life products allow policyholders to vary the premium payments unlike participating products.
II. Variable life products can take the form of whole life or endowment policies with Participating products.
III. Variable life products allow policyholders to pay future single premiums from time to time to add more units to his account unlike participating products.

• I, II, and III

• I

• I and III

• II and III

The selling price under a variable life insurance policy is:

• The price at which units under the policy are bought back by the life insurance company

• The price at which units under the policy are offered for sale by the life company

• Also known as the bid price

• A fixed amount throughout the life of the policy. A fixed amount throughout the life of the policy