Which of the following statements about option to top-up under variable life insurance products is FALSE?

What are the disadvantages when investing in common shares? |. Dividends are paid not more than fixed rates. II. Investors are exposed to market and specific risks. III. Shares can become worthless if company becomes insolvent.

Which of the following statements about the flexibility features of variable life policies is FALSE?

What is the most suitable investment instrument for someone who is interested in protecting his principal, while receiving a steady stream of income?

A unit trust is _____________

The following are characteristics of a variable life insurance policy 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 commissions and company expenses are met by a variety of explicit charges, notice of which is given by life companies normally 6 months prior to any change in such charges. IV. Its withdrawal value is normally the value of units allocated to the policyholder calculated at the

Which 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 values plus any accumulated dividends less any outstanding loans due at time of surrender. III. The life company needs to maintain a separate account for variable life policies distinct from the general account.

Variable life insurarnce policy owners may withdraw in terms of __________

An investor in variable life funds gets to enjoy these benefits: 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.

Which of the following statements about rebating is/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.

Which of the following statements is FALSE?

Which of the following statements about single premium variable life policy 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 life coverage.

Which of the following statements about variable life policies is/are TRUE? I. The cash 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.

Which of the following statements about variable life policies are TRUE? I. Variable life policies generally have larger exposure to equity investment than with participating and other traditional policies. II. The protection costs are generally met by implicit charges, which vary with age and level of cover. III. Commissions and company expenses are met by a variety of explicit charges, some of which are variable.

The facility to do switching under a variable life insurance policy is a very useful ______

Which of the following is/are TRUE about the flexibility benefit of investing in variable life funds? 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 arnd add single premium to top-ups. III. Variable life insurance products have a single product design with a clear structure which cater separately for investment and insurance protection. IV. Policy owners can easily change the level of their premium payment.

Which of the following statements about risks of investing in variable life funds is TRUE?

What would be the withdrawal value after a year? Offer price = Ps 16.00 Bid-offer spread = 4.5 % Number of Units = 25,000 units bought Policy Fee =Ps. 1,800 Admin and Mortality = Ps. 8,750 Charge Top-Up Fee. =Ps. 700 Admin for Top-Up. =Ps. 2,000 Sum assured is 190% of single premium of the value of the units, whichever is higher. Assumptions: 1. Charges and fees are deducted after the single premium has been invested into the account. 2. The growth rate of the unit price and the bid-offer spread is maintained at 8% and 4.5% respectively.

Which of the following statements about an investor diversifying his portfolio is FALSE?

In traditional life insurance products, the allocations to policy owners in the form of dividends I. Are not directly linked to the life company's investment performance II. Have already been smoothened by the life company III. Do not have the highs and lows of investment returns as in good investment years of the life company IV. Are not fixed at the inception of the policy, but are greatly deperndent on the investment performance of the life company.

Which of the following statements is TRUE about cash?

Which of the following are main characteristics of variable life policies? I. The policies can be used for investment, as a source of regular savings and protection. II. The withdrawal values and protection benefits are determined by the investment performance of the underlying assets. III. The net cash values of the policies are the gross cash values shown in the policy that includes dividends up to the date of surrender, less any indebtedness including interest.

The duties of the trustee of unit investment trust do not include

The policy fee payable by a variable life insurance policy owner is to cover _________

In risk-return profile of bond funds, cash funds, managed funds, balanced funds, and equity funds, a risk-return graph will show that_____ I. Higher return normally comes with lower risk. II. Higher return normally comes with higher risk. III. At the top end of the graph are the equity funds. IV. The relatively risk-less cash funds sit at the bottom end of the graph.

Variable life funds can be invested in any financial instruments including bond funds, property funds, specialized funds, and equity funds. Equity funds ______

The investment returns under variable life insurance I. Are not guaranteed II. Are assured III. Are linked to the performance of the investment fund managed by the life company IV. Fluctuate according to the rise and fall of the market prices

Which of the following statements is FALSE?

Which 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 premiums and benefits of the endowment policies are described at inception of the policy whereas variable life policies are flexible as they are account-driven. III. The benefits and risks variable life and endowment policies directly accrue to the policyholders.

Which of the following statements about variable life policies are TRUE? I. Offer price is used to determine the numbers of units to be cancelled to the account. II. The margin between the bid and offer price is used to cover the management cost of the policy. III. The policy value is calculated based on the bid price of units allocated into the policy.

Mr. Cruz is currently earning Ps 30,000 each 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?

Which of the following statements about twisting is FALSE?

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

Which of the following best describes the benefits of variable life policies?

35. Investing in bonds offers the following advantages EXCEPT:

Which of the following statements about benefits in a variable life fund is FALSE?

The differences between traditional participating life insurance and variable life insurance 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 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.

Advantages of investing in preferred shares are: I. It gives shareholders the right to a fixed dividend. II. Has the priority over company assets during dissolution. III. They enjoy benefit of capital appreciation.

Under regular premium, variable whole life insurance plan: I. Premium top-ups and holidays, subject to the life company's administrative rules are usually allowed II. Life protection is the main objective of the plan with investment as a nominal purpose. III. Withdrawals after the payment of a few years premium are usually allowed. IV. A single premium contribution is made to the policy which uses the premium to purchase units in variable life fund and to provide certain level of life cover.

Risk can be classified into two particular categories in relation to investment. They include______ I. The risk of not losing some or all of a person's initial investment II. The risk of rate of return on the investment not matching up to the individual's expectation III. The risk of rate of return on the investment matching up to the individual's expectation IV. The risk of losing some or all of a person's initial investment

The selling price under a variable life insurance policy is_____

When investing in variable life funds, what are the benefits available? 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 the services of a pool of qualified and trained professional fund managers

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 policyowner'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 the investment will add value to the fund

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

A single premium variable life insurance policy_______

Which of the following statements about surrender value under traditional participating life insurance products is TRUE?

Under a variable life insurance policy, the protection costs_____ I. Are met by a flat initial charges for regular premium loans II. Are generally covered by cancellation of units in the fund III. Are generally met by explicit charges stipulated openly in the policy terms IV. Vary with age of policy owner and level of coverage

The objective of satisfying customers' need and business profitability can be achieved by an agent through ______ I. The giving of freebies to customers II. Extensive investment training by the company III. The use of sales plan, where sales goals, strategic and objectives are coordinated with market analysis, segmentation and targeting IV. The giving of monetary assistance and discount to the customers

Which of the following statements about investment objectives is FALSE?

Diversification in investment involves

Which of the following statements about diversification in portfolio management is FALSE?