Life Insurance Reviewer - Variable Part 2 | Take the Quiz

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

I. Short Term Securities

II. Property

III. Cash

IV. Equities

IV, II, III, I

III, I, IV, II

II, I, IV, III

II, IV, I, III

What are the benefits available when investing in variable life funds?

I. The variable life funds offer policyholders an access to 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

I and II

I and III

I, II and III

II and III

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 risk tolerance. What kind of policy would you recommend him to buy?

Participating endowment

Variable life policies

Participating whole life

Annuities

Which of the following statements about twisting are FALSE?

Twisting is a special form of misrepresentation

It refers to an agent inducing a policyholder to discontinue policy with another company without disclosing the disadvantage of doing so

It includes misleading or incomplete comparison of policies

It refers to an agent offering a prospect a special inducement to purchase a policy

Which of the following about rebating is 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

I and II

I and III

II and III

Why is it important that the customer has to understand the sales proposal completely?

Because the insurer does not guarantee any return

Because the impact of changes in investment condition on variable life policy borne solely by the customer

Because the agent may give the wrong recommendations

Because the policyholders expects higher returns

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

The policy benefits are payable only on death or disability

The policy benefits will depend on the long-term performance of the life company

The policy benefits are directly linked to the investment performance of the underlying assets

The policy benefits are guaranteed

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

I, II and IV

I, III and IV

I, II and III

II, III and IV

Under variable life insurance policies _________________________.

I. There is no guaranteed minimum sum assured for the purposed 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 for 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

I and IV

II and IV

III and IV

II and III

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-up single premium injections are allowed in these plans

III. Policyholders have the flexibility of varying the level cover

I, II and III

II and III

I and II

I and III