Nilo

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 6 months’ 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

• I,II & III

• II, III & IV

• I,II & IV

• I, III & IV

Which of the following statements about single premium variable life policies are TRUE?
I. There is no fixed term in a single premium variable life policy and therefore, they are technically whole life insurance
II. Top – ups or single premium injections are allowed in these plans
III. Policyholders have the flexibility of varying the level cover

• I, II & III

• II & III

• I & II

• I & III

Which of the statements is true about CASH?

• It has a high yield potential

• Amount invested in cash depends on size of the cash flow requirement

• Investment in cash increase when there is a bull run in the stock market

• Investment in cash decrease when interest rates rise

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

• It is a fixed premium policy with returns that will not vary with the underlying value of investments.

• It is a fixed premium policy with returns that will vary with the underlying value of investments.

• It is a flexible premium policy with returns that will not vary with the underlying value of investments.

• It is a flexible premium policy with returns that will vary with the underlying value of investments.

Investing in bonds offer the following EXCEPT

• Must be issued with a minimum death benefit

• Must be issued with a maximum withdrawal value

• It allows the investor a chance for capital preservation

• It enables the investor an opportunity for capital appreciation

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

• I, II and III

• I & II

• I & III

• II & III

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

• I, II, & III

• I, II, & IV

• I, III & IV

• II, III, & IV

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

• The net withdrawal value as of the statement date

• The premiums received and charges levied during the period

• The basis and frequency for valuing the assets.

• Number and value of units held at the beginning of the period; bought and sold during the period; and held at the end of the period.

Which of the following statements is FALSE?

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

• Twisting is a specific form of misrepresentation

• Misrepresentation is a specific form of twisting

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

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

• I, II, & III

• I & II

• I & III

• II & III