VUL Mock Exam 1 Flashcards
People generally invest their money to provide:
I. An improvement in their financial position
II. A less comfortable standard of living
III. Retirement income
IV. Funds for paying necessary expenses and taxes when the person dies
A. I,II and III
B. I, III and IV
C. I, II, and IV
D. II, III and IV
B. I, III and IV
- Which of the following funds is comprised of a higher proportion of equity and a lower
proportion of fixed-income instruments?
A. Bond Funds
B. Cash Funds
C. Managed Funds
D. Mixed Funds
C. Managed Funds
- Which of the following are the main characteristics of Variable Life insurance
policies?
I. The policies can be used for investments, as a source of regular savings and
protection.
II. The withdrawal and protection benefit are determined by the investment
performance of the underlying assets.
III. The net withdrawal values of the policies are the gross withdrawal values shown
in the policy which includes cash dividends up to the date of surrender, less all
indebtedness and includes interests.
A. I only
B. II only
C. I and II only
D. I, II and III
C. I and II only
- Which of the following statements are FALSE?
I. The policyowners may request a partial withdrawal of the policy and the amount
will be met by cashing the units at the offer price.
II. The structure of charges and the investment content of a Variable Life policy are
specified in the policy document and the policy statement.
III. Some Variable Life policies grant loans to policyowners which is limited to a
percentage of the cash value.
IV. Commissions and office expenses are met by a variety of implicit charges, some
of which are variable.
A. I and II only
B. I and III only
C. II and III only
D. All of the above
B. I and III only
- Which of the following statements about the feature of Regular Premium Variable
Life Policy are TRUE?
I. Top-ups are usually allowed.
II. The level of cover can be varied.
III. Premium holidays are usually allowed.
A. I and II only
B. I and III only
C. II and III only
D. I, II and III
D. I, II and III
- Which one of the following statements is NOT TRUE about the benefits of investing
in a Variable Life insurance policy?
A. The fund provides a highly diversified portfolio, thus, lowering the risk of
investment.
B. The fund relieves the investor from the hassles of administering his/her
investment.
C. 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 the investment
portfolio.
D. The fund enables small investors to participate in a pool of diversified portfolios in
which he/she is unlikely to have access to with low investment capital.
C. 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 the investment
portfolio.
- Which of the following statements describes the difference between Variable Life
insurance products and traditional participating products?
I. Variable Life insurance products allow policyowners to change the premium
payments but traditional participating life products do not.
II. Variable Life insurance products can take the form of Whole Life or Endowment
policies but Traditional Life policies cannot.
III. Variable Life insurance products allow the policyowners to pay future single
premiums from time to time to add more units to his account but Traditional Life
participating products do not.
A. I only
B. I and III only
C. II and III only
D. I, II and III
B. I and III only
- Which of the following are some of the flexibility features of Variable Life insurance
policies?
I. Partial Withdrawal
II. Variation in sum assured
III. Guaranteed withdrawal values
A. II only
B. III only
C. I and II only
D. I, II and II
C. I and II only
- Which of the following are some of the flexibility features of Variable Life insurance
policies?
I. Partial Withdrawal
II. Variation in sum assured
III. Guaranteed withdrawal values
A. II only
B. III only
C. I and II only
D. I, II and II
C. I and II only
- 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, it is
technically Whole Life insurance.
II. Top-ups or single premium injections are allowed.
III. Policyowners have the flexibility of varying the life coverage.
A. I and II
B. I and III
C. II and III
D. I, 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, it is
technically Whole Life insurance.
II. Top-ups or single premium injections are allowed.
III. Policyowners have the flexibility of varying the life coverage.
A. I and II
B. I and III
C. II and III
D. I, II, and III
C. II and III
- The benefits of investing in Variable Life fund include:
I. Policyowners have access to a pooled and diversified portfolio of investment.
II. The policyowner can easily change the level of premium payments as the
product design of Variable Life insurance policies have clear structures which
cater separately for investment and insurance protection.
III. Policyowners can gain access to Variable Life funds managed by professional
investment managers.
IV. The policyowner is relieved of the day to day administration of his investment.
A. I, II, and III
B. I, II, and IV
C. I, III, and IV
D. All of the above
D. All of the above
- The flexibility benefits of investing in Variable Life funds include:\
I. Policyowners can easily change the level of sum insured and switch their
investments between funds.
II. Policyowners can easily take premium holidays and add single premium top-ups.
III. Variable Life insurance products have simple product design with a clear
structure which caters separately for investment and insurance protection.
IV. Policyowners can easily change the level of their premium payment.
A. I, II, and III
B. I, II, and IV
C. I, III, and IV
D. I, II, III, and IV
B. I, II, and IV
- Which of the following statements describes the difference between Variable Life
products and traditional participating life products?
I. Variable Life products allow policyowners to pay top-up premiums from time to
time to buy more units for his account unlike traditional participating life policies.
II. Variable Life products allow policyowners to take premium holiday unlike
traditional participating life products.
III. Variable Life products can take the form of Whole Life or Endowment policies
unlike traditional participating life products.
A. I
B. I and II
C. I and III
D. I, II, and II
B. I and II
- Your client is a 35 year-old male, earning P35,000 a month, has savings, and with a
moderate risk tolerance. What product would you recommend?
A. Participating Whole Life
B. Endowment
C. Term
D. Variable Life
D. Variable Life
