VUL MOCK EXAM 2
Quiz by Maricar Y. Ladines
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50 questions
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- Q1Variable Life insurance policy owners may make withdrawals in terms of ______________________The sum of units or fixed monetary amount through reduction of the life cover sum assuredThe number of units or fixed monetary amount through the cancellation of unitsThe number of units through the cancellation unitsThe fixed monetary amount only through reduction of the life cover sum assured30s
- Q2Which one of the following statements about the flexibility features of variable life policies is FALSE?Policy owners may request for a partial withdrawal of the policy, and the withdrawal amount will be met by cashing the units at bid pricePolicy owners can take loans against their Variable Life policies up to entire withdrawal value of their policies.Policy owners have the flexibility of switching from one fund to another provided satisfies the company switching criteriaPolicy owners have the flexibility of increasing or decreasing their premiums for regular premium variables life policies30s
- Q3The investments returns under a Variable Life insurance policy __________ I. Are not guaranteed. II. Are assured. Ill. 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 pricesI, II and IllI, Ill and IVII, Ill and IVI, II and IV30s
- Q4Which 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. Ill. The life company needs to maintain a separate account for Variable life Policies district from the general account.I, II and IllI and IllII and IllI, and II30s
- Q5Which of the following statements is FALSE?Misrepresentation is a specific form of twisting.Switching is a facility allowing policy owners to switch to another Variable Life fund offered by the companyTwisting is a specific form of misrepresentation.Rebating is to offer a prospect a special inducement to purchase a policy30s
- Q6Which of the following statements about Variable life policies are TRUE? I. Offer price is used to determine the numbers of units to be cancelled from the account. II. The margin between the bid and offer price is used to cover the management cost of the policy. Ill. The policy value is calculated based on the bid price of units allocated into the policy.II and Illl and lllI, II and IllI and II30s
- Q7What is the most suitable Investment Instrument for an Investor who is Interested in protecting his principal and receiving a steady stream of Income?WarrantsEquitiesVariable Life policiesFixed Income securities30s
- Q8What are the disadvantage of investing in common shares? I. Divides are paid not more than fixed rates. II. Investors are exposed to market and specific risks. Ill. Share can become worthless if company becomes Insolvent.I, IllI, III, II and IllII, Ill30s
- Q9Which of the following statements 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 premium and benefits of the Endowment policies are described at inception of the policy whereas Variable life policies are flexible as they are account driven. Ill. The benefits and risks variable life and Endowment policies directly accrue to the policy ownersI and IllI, IllI and III, II and Ill30s
- Q10Which of the following statements about twisting is FALSE?Twisting is a special form of misrepresentation.it refers to an advisors inducing a policy owner to discontinue a policy with another company without disclosing the disadvantage of doing so.It include misleading or the incomplete comparison of policiesIt refers to an advisor offering a prospect a special inducement to purchase a policy.30s
- Q11Mr. juan dela cruz is currently earning P30,000/month. He is 35 years old and has a reasonable amount of savings. He has a reasonable amount of saving. He has moderate level of risk tolerance. What kind of policy would you recommended for him to buy.AnnuitiesParticipating EndowmentVarialble Life policiesParticipating Whole life30s
- Q12What are the benefits available when investing in variable life funds? I. The Variable Life funds offer policy owners an access to a pooled of diversified portfolios. II. The Variable Life policy owner 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 policy owners can have access to a pool of qualified and trained professional fund manager.I and IllI and IIll and IllI, ll and Ill30s
- Q13Rank the following in terms of their liquidity, from the least liquid to the most liquid: I. Short Term Securities II. Property III. Cash IV. EquitiesIV, II, III, III, I, IV, IIlIll, I, IV, IIII, IV, I, III30s
- Q14A UNIT TRUST is _____________A closed-end fund and does not have to dispose of Its asset. If a large number of investors sell their sharesAn organization registered under the security and Exchange Commission (SEC) which usually invest in a wide range of equities and other Investments.Established by a trust deed which enables a trustee to hold the pool of money and asset in behalf s in trust on behalf of the Investor.One whereby an investor buys units In the trust itself and not from the shares of the company30s
- Q15Under 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 insurance protection. Ill. 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.I, II and Illll, lll and IVI, Ill and IVI, II and IV30s