1. Variable life insurance policy owners may make withdrawals in terms of ______.

2. Which of the following statements about flexibility features of variable life policies is false?

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

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

5. Which of the following statements is FALSE?

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 necount II. The margin between the bid and offer price is used to cover the managements cost of the policy III. The policy value is caleulated based on the bid price of units allocated into the policy

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?

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

9. Which of the following statements about the difference between variable life policies and endowment policies are FALSE? 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 policics are described at the inception of the policy whercas 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

10. Which of the following statements about twisting is FALSE?

11. Mr. Juan dela Cruz is currently carning Php 30,000.00 per month. He is 35 years old and he has a reasona bo hinount of savings. He has a moderate level of risk tolerance. What kind of policy would you recommend for him to buy?

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 casily III. The variable life policyholder can have access to a pool of qualified and trained professional fund managers

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

14. A unit trust is ____________.

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

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 ange the level of the preminim payments as the product design of varibic lite 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 will proven track records IV. Policy owners can buy a variable life insurance policy only with a high initial investment

17. Which of the following BEST describes the policy bencfits of variable life policies?

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 IlI. Rebating will enhance the sales performance and uphold the prestige of an agent.

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. Il. 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

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 tcchnically 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

24. Investing in bonds offer the following EXCEPT

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

26. Single premium variable life insurance policy:

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 implicit 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

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

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 casily 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 & Ill 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

31. The switching facility under variable life insurance policies is a very useful ________.

32. The following statement about surrender value under traditional participating life insurance products are TRUE?

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

34. What should be the withdrawal values after a year? Offer Price = Php 16.00 Bid-Offer Spread = 4.5% Number of units bought = 25,000 Policy Fee = 1,800 Admin and Mortality Charge = 8,750 Тор-up fee = 700 Admin for Top-up = 2,000 Sum assured is 190% of single premium or the value of 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 bid-offer spread is maintained at 8% and 4.5% respectively.

35. The protection cost under a variable life insurance policy ______________. I. Are met by flat initial charges for regular premium plans 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 cover

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

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

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

39. The objective of satisfying customers need profitably can be achieved by and agent through ___________. I. The giving of freebies to the customers II. Extensive investment training by the company III. The use of sales plan, where sales goals, strategics, and objectives are coordinated with the market analysis, segmentation and training IV. The giving of monetary assistance and discount to the customers

40. Which of the statements is true about CASH?

41. Under a regular premium variable whole life plan _______________. I. Premium top-ups and holidays, subject to the company's administrative rules are usually allowed II. Life protection is the main objective of the plan with investment as the 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 a variable life fund to provide a certain level of life cover

42. Which of the following statements about investment objectives is false?

43. Which of the following is / are the main characteristic (s) 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 III. The net cash values of the policies are the gross cash valucs shown in the policy that includes dividends up to the date of surrender less and indebtedness including interest

44. Risk can be classified into two particular categories in relation to investment. They include _______________. I. The risk of not losing some or all of the 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

45. The duties of the trustee of unit trust do not include:

46. Policy fee payable by variable life insurance policy owner is to cover _____________.

47. The selling price under a variable life insurance policy is:

48. Diversification in investment involves _________________.

49. Variable life funds can be invested in any financial instruments including cash funds, bond funds, equity funds, property funds, specialized funds, and diversified funds. Equity funds ______________.

50. Which of the following statements describe the differences between variable life products and participating products? I. Variable life products allow policyholders to vary the premium payments unlike participating products. II. Variable life products can take the form of whole life or endowment policies with Participating products. III. Variable life products allow policyholders to pay future single premiums from time to time to add more units to his account unlike participating products.

51. Assuming no movement in the prices and charges / fees are deducted after the single premium has been Invested into the account, how much will the policyholder lose if he surrenders the policy now? Bid price = Ps. 13.00 Bid-offer spread = 4% Single premium = Ps. 450,000 Policy fee = Ps. 1,800 Admin and Mortality charge = 3% Sum assured is 200% of single premium or the value of the units, whichever is higher

52. Which of the following statements BEST describes "variable life" policies?

53. Which of the following factors contribute to the specific risk of an investment: I. Rate of corporate laxes II. Fraud by senior management III. Financial leverage of the company

54. Investing in bonds offers the following advantages EXCEPT

55. Rank the following investment instruments in terms of their level of risks, from the least risky to the most risky. I. cash and deposit Il. derivatives Ill. a well diversified investment portfolio of a company IV. stock options

56. In risk-return profile of cash funds, bond funds, balanced funds, managed 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

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

58. Which of the following information is NOT required to be disclosed to policyholders of variable life policies?