PRULIFE UK_IC EXAM ( PART 1, 1-30 VARIABLE )
Test Your Knowledge on Variable Life Insurance
Welcome to the PRULIFE UK IC Exam Quiz! This quiz is designed to assess your understanding of variable life insurance policies and their various features. Whether you are a student, a professional in the industry, or simply interested in insurance products, this quiz will help reinforce your knowledge.
- 30 multiple-choice questions.
- Focused on key concepts in variable life insurance.
- Suitable for certification and learning purposes.
1. 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 of fixed monetary 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
2. Which of the following statements about 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 the bid price.
B. Policyholders can take loans against their variable life 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 premium variable life policies
3. The investment returns under variable life insurance policy _____ I. Are not guaranteed II. Are assured III. Are linked to the performance to of the investment fund managed by the life insurance company IV. Fluctuate according to the rise and fall of market prices
A. I, II and III
B. I, II and IV
C. I, III and IV
D. II, III and IV
4. Which of the following statements is 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 the surrender III. The life company needs to maintain a separate account for variable life policies distinct from the general account
A. I & II
b. I, II & III
C. I & III
D. II & III
5. Which of the following statements 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 the policyholders to switch to another variable life funds offered by the company
6. 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
A. I, II & III
B. I & II
C. I & III
D. II & III
7. 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
B. Warrants
C. Variable life policies
D. Fixed income securities
8. What are the disadvantages of investing in common shares? I. Dividends are paid 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
B. I& III
C. II & III
D. I, II & III
9. Which of the following statements about the difference between variable life policies and endowment policies are FAL SE? I. The policy values of variable life policies directly reflect the performance of the fund of the life company II. The premiums and benefits of the endowment policies are described at the inception of the policy Whereas variable life are flexible as the are account driven III. The benefits and risks of variable life and endowment policies directly accrue to the policyholders
A. I & II
B. I, II & III
C. I & III
D. II & III
10. Which of the following statements about twisting is FALSE?
A. Twisting is a special form of misrepresentation
B. It refers to an agents including 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
11. Mr. Juan dela Cruz is currently earning Php 30,000.00 per month. He is 35 years old and he has a reasonable amount of savings. He has a moderate level of risk tolerance. What kind of policy would you recommend for him to buy?
A. Participating Endowment
B. Variable life policies
C. Participating wholelife
D. Annuities
12. 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 policyholders can vary his premium payments, take premium holidays, add single premium top – ups and change the level of the sum assured easily III. The variable life policyholder can have access to a pool of qualified and trained professional fund managers
A. I & II
B. I & III
C. I, II & III
D. II & III
13. Rank the following in terms 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
14. A unit trust is __________________
A. Established by a trust deed which enables a trustee to hold the pool of money and assets in trust in behalf of the investor
B. A close-end fund and does not have to dispose off if the large number investors sell their shares
C. One whereby the investor buys units in the trust itself and not share in the company
D. An organization registered under the SECURITY EXCHANGE COMMISSION (SEC) which usually Invests in a wide range of equities and other investment
15. Under 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 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 investment monies to the value of the fund
A. I & IV
B. II & IV
C. III & IV
D. II &III
16. 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 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 & IV
B. I, III, & IV
C. I, II & III
D. II, III & IV
17. Which of the following BEST describes the policy benefits of 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
18. 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 is borne solely by the customer.
C. Because the agent may give the wrong recommendations
D. Because the policyholder expects higher returns
19. Which of the following statements 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 & II
B. I & III
C. II & III
20. Which one of the following statements is FALSE?
A. Variable life insurance policies offer investors policies with values and indirectly linked to the investment performance of the life company
B. Life company will carry out a valuation of its funds yearly and any surplus may be allocated to participating policyholder as cash dividends
C. Both Whole Life and Endowment policies can be used as an investment media with benefits that become payable at a future date
D. The investment element of Variable life policies varies according to underlying assets of the portfolio
21. Which of the following statements about option top – up under variable life insurance is false?
A. Policy owners may buy additional units of the variable life fund and these units will be allocated to new variable life insurance policies
B. Further premiums at time of the top – up will be used in full, after deducting charges for top – ups, to purchase additional units of the variable life funds
C. Top – up policy, the policy owner pays further single premium at the time of the top – up
D. Policy owners are normally allowed to top – up their policies at any time, subject to a minimum amount
22. 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
A. I, II & III
B. II, III & IV
C. I, II & IV
D. I, III & IV
23. 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
A. I, II & III
B. II & III
C. I & II
D. I & III
24. Investing in bonds offer the following EXCEPT
A. Must be issued with a minimum death benefit
B. Must be issued with a maximum withdrawal value
C. It allows the investor a chance for capital preservation
D. It enables the investor an opportunity for capital appreciation
25. Which of the following statements about variable life policies are TRUE? I. The withdrawal value is not guaranteed II. The volatility of the returns depends on the investment strategy of the fund III. The variable life policyholder has direct control over the investment decisions of the variable life fund
A. I, II & III
B. I & II
C. I & III
D. II & III
26. Single premium variable life insurance policy:
A. Must be issued with a minimum death benefit
B. Must be issued with a maximum withdrawal value
C. Has no death benefit
D. Has no withdrawal value
27. Which of the following statements about characteristics of variable life policies are TRUE? I. Variable policies generally have a longer exposure to equity investment than with participating and other traditional policies II. The protection costs are generally met by im plicit charges, which vary with age and level of cover III. The commissions and company expenses are met by a variety of explicit charges, some of which are variable
A. I, II & III
B. I & II
C. II & III
D. I & III
28. Which of the following statements about benefits in variable life fund is FALSE?
A. The fund provides a highly diversified portfolio, thus, lowering the risk of investment
B. The fund ensures definite high yield for an investor since it is managed by professionals who are well – versed in the management of risk of investment portfolios
C. The fund relieves the investor from the hassle of administering his / her investment
D. The fund enables small investors to participate in a pool of diversified portfolio in which he / she, with a low investment capital, is likely to have acceded to
29. The flexibility benefit of investing in variable life funds include _____ : I. Policy owners can easily change the level of sum assured and switch their investment between funds II. Policy owners can easily take premium holidays and add single premium to Top – ups III. Variable life insurance policies offer the potential for higher returns IV. Traditional participating policies aim to produce a steady return by smoothing out market fluctuation
A. All of the above
B. I, II & III
C. I, II & IV
D. I, III & IV
30. The fundamental differences between traditional participating life insurance policies and variable life insurance policies include _____ . I. Variable life insurance policies are less likely to offer more choices in terms of the type of investment funds II. The investment elements of variable life insurance policies is made known to the policy owner at the outset and is invested in a separately identifiable fund which is made up of units of investment III. Variable life insurance policies offer the potential for higher returns IV. Traditional participating policies aim to produce a steady return by smoothing out market fluctuation
A. I, III & IV
B. II, III, IV
C. I, II, III
D. I, II & IV
{"name":"PRULIFE UK_IC EXAM ( PART 1, 1-30 VARIABLE )", "url":"https://www.quiz-maker.com/QPREVIEW","txt":"Welcome to the PRULIFE UK IC Exam Quiz! This quiz is designed to assess your understanding of variable life insurance policies and their various features. Whether you are a student, a professional in the industry, or simply interested in insurance products, this quiz will help reinforce your knowledge.30 multiple-choice questions.Focused on key concepts in variable life insurance.Suitable for certification and learning purposes.","img":"https:/images/course8.png"}