Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
20 Cards in this Set
- Front
- Back
|
Variable life insurance policy owners may make withdrawals in terms of ___________. A. Number of units or fixed monetary amount through cancellation of units B. Number of units or fixed 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
|
Number of units or fixed monetary amount through cancellation of units. |
|
|
Which one of the following statement 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. Policyholders 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 satisfies the company’s switching criteria D. Policyholders have the flexibility of increasing or decreasing their premiums for regular premiums variables life policies
|
Policyholders can take loans against their variable life policies up to the entire withdrawal value of their policies.
|
|
|
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 management by the life company IV. Fluctuate according to the rise and fall of the market prices
A. I, II and III B. I, II and IV C. I, III and IV D. II, III and IV
|
C. I, III and IV
I. Are not guaranteed III. Are linked to the performance of the investment fund management by the life company IV. Fluctuate according to the rise and fall of the market prices
|
|
|
. 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 time of surrender III. The life company needs to maintain a separate account for variable life policies distinct from the general account. A. I, and II B. I, II and III C. I and III D. II and III |
II and III |
|
|
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 time of surrender III.The life company needs to maintain a separate account for variable life policies distinct from the general account. A. I, and II C. I and III B. I, II and III D. II and III |
D. II and III II. The policy value of endowment policies is the cash value plus any accumulated dividends less any outstanding loans due at 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 statement 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 funds offered by company |
Misrepresentation is a specific form of twisting |
|
|
Which of the following statements about variable life policies are TRUE? I. Offer price is used to determine the numbers of units to be cancelled to the account Which of the following statements about variable life policies are TRUE? I. Offer price is used to determine the numbers of units to be cancelled 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 A. I, II and III C. I and III B. I and II D. II and III Which of the following statements about variable life policies are TRUE? I. Offer price is used to determine the numbers of units to be cancelled 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 A. I, II and III C. I and III B. I and II D. II and III Which of the following statements about variable life policies are TRUE? I. Offer price is used to determine the numbers of units to be cancelled 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 A. I, II and III C. I and III B. I and II D. II and III Which of the following statements about variable life policies are TRUE? I. Offer price is used to determine the numbers of units to be cancelled 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 A. I, II and III C. I and III B. I and II D. II and III 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 A. I, II and III C. I and III B. I and II D. II and III |
D. II and III 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 |
|
|
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 C. Variable life policies B. Warrants D. Fixed income securities |
Fixed income securities |
|
|
What are the disadvantages of investing in common shares? I. Dividends are paid not more than fixed rates II. Investors are exposed to market and specific risks III. Shares can become worthless if company becomes insolvent A. I, II C. II, III B. I, III D. I, II and III |
C. II, III II. Investors are exposed to market and specific risks III. Shares can become worthless if company becomes insolvent |
|
|
Which of the following statement about the differences between variable life policies and endowment policies are FALSE? I. The policy values of variable life and endowment policies directly reflect the performance of the fund of the life company II. The premiums and benefits of the endowment policies are described at inception of the policy whereas variable life policies are flexible as they are account driven III. The benefits and risks variable life and endowment policies directly accrue to the policyholders A. I and II C. I and III B. I, II and III D. II and III |
C. I and III I. The policy values of variable life and endowment policies directly reflect the performance of the fund of the life company III. The benefits and risks variable life and endowment policies directly accrue to the policyholders |
|
|
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 |
D. It refers to an agent offering a prospect a special inducement to purchase a policy |
|
|
Mr. Juan dela Cruz is currently earning Ps, 30,000/month. He is 35 years old and has a reasonable amount of savings. He has a moderate level for risks tolerance. What kind of policy would you recommend for him to buy? A. Participating endowment C. Participating whole life B. Variable life policies D. Annuities |
B. Variable life policies |
|
|
What are the benefits available when investing in variable life funds? I. The variable life funds offer policyholders an access to a pooled or diversified portfolios II. The variable life policyholder can vary his premium payments, take premium holidays, add single premium top-ups and change the level of sum assured easily. III. The variable life policyholder can have access to a pool of qualified and trained professional fund managers. A. I and II C. I, II and III B. I and III D. II and III |
A. I and II I. The variable life funds offer policyholders an access to a pooled or diversified portfolios II. The variable life policyholder can vary his premium payments, take premium holidays, add single premium top-ups and change the level of sum assured easily. |
|
|
Rank the following in term of their liquidity, from the least liquid to the most liquid: I. Short Term Securities II. Property III. Cash IV. Equities A. IV, II, III, I B. III, I, IV, II C. II, I, IV, III D. II, IV, I, III |
C. II, I, IV, III
II. Property > I. Short Term Securities > IV. Equities > III. Cash
|
|
|
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 off its assets if large number of investors sell their shares C. One whereby investor buys units in the trust itself and not shares in the company D. An organization registered under the SECURITY AND EXCHANGE COMMISSION (SEC) which usually invests in a wide range of equities and other investment. |
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 |
|
|
Under variable life insurance policies ____________________ I. There is no guaranteed minimum sum assured for the purpose of declaring dividends II. There is not 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 the investment monies to the value of the fund. A. I and IV B. II and IV C. III and IV D. II and III |
C. III and IV 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 the 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 insurance 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.
A. I, II and IV B. I, III and IV C. I, II and III D. II, III and IV |
C. I, II and III
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 insurance 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. |
|
|
Which of the following BEST describes the policy benefits variable life policies? A. The policy benefits are payable only on 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 assets D. The policy benefits are guaranteed |
C. The policy benefits are directly linked to the investment performance of the underlying assets |
|
|
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 investment condition on variable life policy borne solely by the customer C. Because the agent may give the wrong recommendations D. Because the policyholders expect higher returns |
B. Because the impact of changes in investment condition on variable life policy borne solely by the customer |
|
|
19. Which of the following statement 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 A. I and II B. I and III C. II and III D. All of the above |
A. I and II I. Rebating is prohibited under the Insurance Code II. Rebating deals with offering the prospect a special inducement to purchase a policy |
