Vul 2
Quiz by Mary Anne Marte
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55 questions
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- Q1Which of the following statements are FALSE? I. The bid-offer spread is used to provide death benefit for the Variable life insurance policy. II. The bid-price is always higher than the offer price. III. The bid-offer is usually about 5%. IV. There are two types of death benefit under the variable life insurance product. They may offer either or both types depending on the product design.II & IV onlyII & III onlyI & II onlyNone of the above30s
- Q2The death benefit under regular premium variable life insurance policies is either I. The sum insured chosen by the life insured plus the value of units in the fund at the bid price. II. The sum insured chosen by the life insured or the value of units in the fund at the bid price whichever is higher. III. The minimum sum insured or the value of the units in the fund at the bid price, whichever is higher. IV. The minimum sum insured plus the value of the units in the fund at the bid price.. II & IIII & IVIII & IVI & II30s
- Q3If the current offer price = P 2.50 and the Bid offer spread = 4%. Calculate the Bid PriceC. P2.60D. P2.70A. P2.40B. P2.5030s
- Q4Which of the following statements about switching are TRUE? I. Switching allows a policyholder the liberty to move part or all money from one fund to another. II. Switching can be used for retirement and education fees planning. III. A company which offers only one fund to its policyholders will normally include a switching facility. IV. It is advisable for policyholders to switch assets in the bond type funds which are more variable in returns.I & IIII onlyI, II, & IIII & II30s
- Q5Identify charges that are applicable to single premium policy:D. All of the aboveC. Investment Management FeeA. Policy FeeB. Administrative and Mortality Charge30s
- Q6The difference between the offer price and the bid price is?D. None of the aboveB. Offer price spreadA. Bid price spreadC. Bid offer spread30s
- Q7The switching facility is very useful forC. The purpose of financial planning by the policyowner.D. The purpose of profit planning by the life policies.B. The purpose of sales planning by the fund manager.A. The purpose of assets planning by the trustee.30s
- Q8For variable life policy, the definition of selling price is:D. It is a fixed amount throughout the life of the policy.A. The price at which units under the policy is offered for sale by the life company.B. It is also known as the bid price.C. The price at which units under the policy are bought back by the life company.30s
- Q9Policy owners of variable life insurance policies may make withdrawal in terms ofC. Number of units through cancellation of units.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.D. Fixed monetary amount only through reduction of the life cover sum assured.30s
- Q10Which statement regarding the risk of investment in variable life is TRUE?A. Policyowners who are risk averse should not purchase life insurance policy with high protection and guaranteed cash and maturity values.B. Investments in variable life funds which are fully invested in units of equity funds are not suitable for policyowners who can tolerate the risks of short term fluctuation in their cash value.C. Policy owners who invest in variable life funds with high equity investment face greater risk but can expect to achieve higher return than traditional life insurance policies with high equity investment.D. Policy owners who are risk averse should buy variable life policies with high equity investment30s
- Q11The administrative fee, insurance charge, and fund management charge under Variable Life are I. not subject for review II. usually guaranteed III. always upfront charges IV. subject to change by the life company after written notice to its policyownersII and IIII and IIIIII and IVII, III, and IV30s
- Q12Mr. Pascual wishes to invest P20, 000 in a single premium Variable 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 If the charges and fees are deducted by canceling units from the policy at inception, how many units can Mr. Pascual purchase?D.. None of the aboveB.. 16,666.67C.16,122.81A. 16,150.7630s
- Q13Which of the following statements about variable life policies are true? I. The margin between the bid and the offer price is used to cover the management cost of the policy. II. The policy value is calculated based on the price of units allocated into the policy. III. The offer price is used to determine the number of units to be credited to the account.I & IIAll of the aboveI & IIII & III30s
- Q14Which statement best describes the policy benefits of variable life insurance policies?The policy benefits will depend on the long-term performance of the company.The policy benefits are guaranteed.The policy benefits are directly linked to the investment performance of the underlying assets.The policy benefits are payable only upon death or disability.30s
- Q15What is the reason why a customer must fully understand the sales proposal?Because the agent may give wrong recommendations.Because the impact of changes in investment condition on variable life policy is borne solely by the customer.Because he expects a high return.Because the insurer does not guarantee any return.30s