Which of the following statement/s is/are FALSE?

I. Higher capital gain is normally associated with lower risk.

1. II. One way to lower risks in investment is to diversify.

2. III. One method of measuring risk is to determine the average return and its standard deviation from future data.

3. IV. Diversification can be achieved by investing in differentcountries and/or types of assets.
   V. An investor can always choose an investment that is risk

   free.

The risk profile of a person depends on:

I. age
II. investment objectives

III. financial conditions
IV. Personality

Which of the following statements regarding excess premiums is/are TRUE?

I. Excess premiums are premiums paid in addition to the Single Premium or the Annual Regular Premium.

1. II. Excess premiums are single premium injections used to buy additional investments into the VUL policy.

III. Excess premium is considered as such only after the Annual Regular Premium has been fully paid.
IV. Excess premium is the premium paid if the insured is rated

as above average risk.

An insurer must provide each investment-linked policy holder with ___.

Which of the following statements is true?

Which of the following statements is a proper step when analyzing your client's resources?

I. Ask your client to keep stock of what he already has.

1. II. Ask your client to set aside less liquid assets from those he

   could use for investment purposes.

2. III. Determine how much your client can invest on a regular

   basis.

1. Which of the following statement/s is/are true?
   
   I. The level of risk tolerance refers to the tolerance for magnitude and variability of historical returns or loss.

2. II. The level of risk tolerance is influenced by a person’s age, personality, investment objectives, and financial condition.

3. III. Investor needs to choose between assets that yield regular income, or provide capital gain.

Which of the following statements is TRUE?

0. The bid price can be computed as follows:

0. Which one of the following statements about investment-linked

   policies are TRUE?
   
   I. the cash value is not guaranteed

1. II. the volatility of the returns depends on the investment

   strategy of the fund

2. III. the variable life insurance policyowners have direct control

   over the investment decisions of the fund.

Which of the following statements about single premium Variable Universal Life policies are TRUE?

I. There is no fixed term in a single premium Variable Universal Life policy and therefore, it is technically whole life insurance

1. II. Top-ups or single premium injections are allowed in the plans

2. III. Policyholders have the flexibility of varying the life coverage

These are debt loans that pay a specific interest over a fixed period of time.

Mr. Custodia wishes to invest P20,000 in a single premium Variable Universal Life policy with the following parameters.

Offer Price = P1.20
Bid-offer-spread = 5%
Policy Fee = P120.00
Administrative and Mortality Charge = 2.5% of single premium Assumptions:

The charges and fees are deducted by canceling units from the policy at inception.

How many units can Mr. Custodia purchase?

Which of the following statements about the features of Regular Premium Variable Universal Life policy are TRUE?

I. Top-ups are usually allowed
II. The level of coverage can be varied.

III. Premium holidays are usually allowed.

Which of the following information is not conveyed to the VUL

prospects?

Which one of the following statements about investment objectives is FALSE?

• The switching facility under Variable Universal Life insurance policies

  is very useful ___.
  

0. Diversification in investment involves ___.

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

Identify the charges that are applicable to a single premium policy:

Which is/are the benefits of Variable Universal Life funds?

The offer price under a Variable Universal Life insurance policy is

___.

Under the dual pricing method of single premium policies, ___.

People generally invest their money to provide:

I. an improvement in their financial position

1. II. a less comfortable standard of living

2. III. income in retirement

3. IV. funds for paying necessary expenses and taxes when the

   person dies

Which of the following characteristics pertaining to common shares is/are TRUE?

I. Guaranteed small returns

II. The holder of an ordinary share is a part owner of the company
III. There is no certainty that the company will make profits and

thus no certainty that there will be dividends
IV. There is no risk involved in the investment of ordinary

shares

Three elements affect the accessibility of the funds. They include ___:

I. the age and attitude of the investment towards risk

1. II. the initial cost in setting up or buying into the investment

2. III. the time horizon of needs of the fund

3. IV. the cost or penalty or realizing the investment before its

   maturity period

Which one of the following investment options entitles the holder ownership and has a share of profits in the form of dividends appreciation?

Why is it important that the client understands the agent’s recommendation in full?

0. The benefits of investing in Variable Universal Life funds include ___:
   
   I. Policyholders have access to a pooled or diversified portfolio of investment

1. II. Policyholders can easily change the level of premium payments as the product design of variable life insurance policies have clear structures which cater separately for investment and insurance protection

2. III. Policyholders can’t gain access to Variable Universal Life funds managed by professional investment managers.

3. IV. Policyholders are relieved of the day-to-day administration of his investment

Which of the following statements regarding VUL policies is/are FALSE?

I. VUL is an INSURANCE, SAVINGS and INVESTMENT package all rolled into one.

1. II. Similar to dividends in participating traditional policies, VUL allows the policy owners to withdraw from the fund as the need arises.

2. III. Similar to traditional policies, non-payment of premiums in VUL policies beyond the grace period automatically translates to a lapsed policy and is invested in a separately identifiable fund, which is made up of units of investment.

The offer price can be computed as follows:

Which of the following statements is/are FALSE?

I. With VUL, you can switch funds, i.e. change how premiums paid are allocated into the funds.

1. II. With VUL, you can make changes in the fund allocation, e.g. transfer earnings from bond fund to equity fund.

2. III. With VUL, you can make full withdrawal.

Investing in bonds offers the following advantages EXCEPT

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

I. The policy values 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 are account driven

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

Which of the following statements about option to top-up under variable life insurance products is FALSE?

Which of the following statement/s is/are the advantages of money market instruments?

I. High liquidity
II. Long-term of investments

III. Low returns

IV. Low risks

V. No re-investment risk

Which one of the following statements is FALSE?

I. Treasury Bills are long-term government borrowings.

1. II. Money market securities are examples deposit instruments

   with a maturity of one year or less.

2. III. Preferred stock entitles the owner to a share of the

   corporation's profits and a share of the voting power in shareholder elections.

What are the disadvantages in investing in common shares?

I. Dividends are paid not more than the fixed rate
II. Investors are exposed to market and specific risks

III. Shares can become worthless if company becomes insolvent

Which of the following investment options has all the advantages of capital appreciation, liquidity and inflation hedge?

Which of the following statements is FALSE?

Which one of the following statements is FALSE?

0. What is the right sequence of the steps in Financial Planning?
   
   I. Analyze Resources
   II. Evaluate Investment Options

   III. Set Goals
   IV. Evaluate the Plan

   V. Implement the Plan

Which of the following is NOT a characteristic of a Variable Universal Life policy?

Variable Universal Life funds can be invested in any financial instruments including cash funds, bond funds, property funds, specialized funds, and diversified funds. Equity funds ___.

0. Which of the following statements is TRUE?

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

Which of the following statements describe/s the differences between Variable Universal Life insurance products and Traditional participating products?

I. Traditional participating life policies aim to produce steady return by smoothing out market fluctuations, while Variable Universal Life insurance policies offer the potential for higher returns but at the expense of market volatility and higher risk.

1. II. Variable Universal Life insurance products can take the form of Whole Life or Endowment policies but Traditional Participating life policies do not.

2. III. The investment element of Variable Universal Life insurance policies is made known on the outset and is invested in a separately identifiable fund, which is made up of units of investment.

If the current offer price = P1.50
And the Bid-offer Spread = 5%
Calculate for the Bid Price:

Which one of the following statements is not true about the benefits of investing in a Variable Universal Life insurance policy?

Variable life insurance policy owners may make withdrawals in terms of ___________.

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

Which of the following statements is TRUE?

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

II. The policy value of endowment policies is the cash value plus any 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

Which of the following statements is FALSE?

Which of the following 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 managements cost of the policy

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

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

are FALSE?

I. The policy values 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 are account driven

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

Which of the following statements about twisting is FALSE?

Mr. Juan dela Cruz is currently earning Php 30,000.00 per month. He is 35 years old and he has a reasonable amount of savings. He has a moderate level of risk tolerance.

What kind of policy would you recommend for him to buy?

Rank the following in terms of their liquidity, from the least liquid to the most liquid:

I. Short term securities

II. Property

III. Cash

IV. Equities

A unit trust is ____________________

Under variable life insurance policies ________________

I. There is no guaranteed minimum sum assured for the purpose of declaring dividends

II. There is no guaranteed minimum sum assured as a level of life insurance protection

III. Each of the policy owner’s premium will be used to purchase units the number of which is dependent on the selling price of each unit

IV. Purchase of units can only be made from the variable life fund itself, which will then create new units and add investment monies to the value of the fund

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

Which of the following BEST describes the policy benefits of variable life policies?

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.

Which one of the following statements is FALSE?

The characteristics of a variable life insurance include ________________:

I. Its withdrawal value and protection benefits are determined by the investment performance of the underlying assets.

II. Its protection costs are generally met by implicit charges

III. Its commission and company expenses are met by a variety of explicit charges with normally 6months notice given by the life companies prior to any change

IV. Its withdrawal value is normally the value of units allocated to the policy owner calculated at the bid price

Investing in bonds offer the following EXCEPT

Single premium variable life insurance policy:

Which of the following statements about characteristics of variable life policies are TRUE?

I. Variable policies generally have a longer exposure to equity investment than with participating and other traditional policies

II. The protection costs are generally met by implicit charges, which vary with age and level of cover

III. The commissions and company expenses are met by a variety of explicit charges, some of which are variable

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

The fundamental differences between traditional participating life insurance policies and variable life insurance policies include:

I. Variable life insurance policies are less likely to offer more choices in terms of the type of investment funds

II. The investment elements of variable life insurance policies is made known to the policy owner at the outset and is invested in a separately identifiable fund which is made up of units of investment

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

The following statement about surrender value under traditional participating life insurance products are TRUE?

Which one of the following statements about risks of investing in variable life funds is TRUE?

What should be the withdrawal values after a year?

Offer Price = Php. 16.00

Bid-Offer Spread = 4.5%

Number of units bought = 25,000

Policy Fee = 1,800

Admin and Mortality Charge = 8,750

Top-up Fee = 700

Admin for Top-up = 2000

Sum assured is 190% of single premium or the value of units, whichever is higher.

ASSUMPTIONS:

1. Charges and fees are deducted after the single premium has been invested into the account.

2. The growth rate of the unit price and bid-offer spread is maintained at 8% and 4.5% respectively.

The protection cost under a variable life insurance policy ____________.

I. Are met by flat initial charges for regular premium plans

II. Are generally covered by cancellation of units in the fund

III. Are generally met by explicit charges stipulated openly in the policy terms

IV. Vary with age of policy owner and level of cover

What are the advantages of investing in preferred shares?

I. It gives shareholders the right to a fixed dividend

II. Has the priority over company assets during a dissolution

III. They enjoy benefit of capital appreciation

With traditional participating life insurance products, the allocations to policy owners in the form of dividends ________________________:

I. Are not directly linked to the company’s investment performance

II. Have already been smoothened by the life company

III. Do not have the highs and lows of investment return as in good investments years of life company

IV. Are not fixed at the inception of the policy, but are greatly dependent on the investment performance of the company.

The objective of satisfying customers need profitably can be achieved by and agent through

I. The giving of freebies to the customers

II. Extensive investment training by the company

III. The use of sales plan, where sales goals, strategies, and objectives are coordinated with the

market analysis, segmentation and training

IV. The giving of monetary assistance and discount to the customers

Which of the following is / are the main characteristic (s) of variable life policies?

I. The policies can be used for investment, as a source of regular savings and protection

II. The withdrawal values and protection benefits are determined by the investment

III. The net cash values of the policies are the gross cash values shown in the policy that includes dividends up to the date of surrender less and indebtedness including interest

Risk can be classified into two particular categories in relation to investment. They include________:

I. The risk of not losing some or all of the person’s initial investment

II. The risk of rate of return on the investment not matching up to the individual’s expectation

III. The risk of rate of return on the investment matching up to the individual’s expectation

IV. The risk of losing some or all of a person’s initial investment

The duties of the trustee of unit trust do not include:

Policy fee payable by variable life insurance policy owner is to cover___________

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.

Assuming no movement in the prices and charges / fees are deducted after the single premium has been Invested into the account, how much will the policyholder lose if he surrenders the policy now?

Bid price = Ps. 13.00

Bid-offer spread = 4%

Single premium = Ps. 450,000

Policy fee = Ps. 1,800

Admin and Mortality charge = 3%

Sum assured is 200% of single premium or the value of the units, whichever is higher

Which of the following statements BEST describes “variable life” policies?

Which of the following factors contribute to the specific risk of an investment:

I. Rate of corporate taxes

II. Fraud by senior management

III. Financial leverage of the company

Investing in bonds offers the following advantages EXCEPT

Rank the following investment instruments in terms of their level of risks, from the least risky to the most risky.

I. cash and deposit

II. derivatives

III. a well diversified investment portfolio of a company

IV. stock options

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

Which of the following statements are TRUE?

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

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

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

Which of the following information is NOT required to be disclosed to policyholders of variable life policies?