問題一覧
1
Which of the following statements BEST describes “variable life” policies?
It is a flexible premium policy with returns that will vary with the underlying value of investments investments.
2
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?
Participating whole life
3
What are the disadvantages of investing in common shares?
Investors are exposed to market and specific risks, Shares can become worthless if company becomes insolvent
4
Which of the following statements about flexibility features of variable life policies is false?
Policyholders can take loans against their variable life up to the entire withdrawal value of their policies
5
Which of the following statement s about option top – up under variable life insurance is FALSE?
Policy owners may buy additional units of the variable life fund and these units will be allocated to new variable life insurance policies
6
Rank the following investment instruments in terms of their level of risks, from the least risky to the most risky. I. cash and deposit II. derivatives III. a well diversified investment portfolio of a company IV. stock options
I, IV, III & II
7
Which of the following statements about characteristics of varible life policies are TRUE?
Variable policies generally have a longer exposure to equity investment than with participating andother traditional policies, The commissions and company expenses are met by a variety of explicit charges, some of which are variable
8
The duties of the trustee of the unit trust do nit include:
Managing the portfolio of investment and administering the buying and selling of shares in the unit trust itself
9
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
Ps. 33,246.78
10
Which of the following statements about variable life policies are TRUE?
The withdrawal value is not guaranteed, The volatility of the returns depends on the investment strategy of the fund
11
Policy fee payable by variable life insurance policy owner is to cover__________________
The administrative expenses of setting uo the variable life insurance policy
12
With traditional participating life insurance products, the allocations to policy owners in the form of dividends ______
Are not directly linked to the company’s investment performance, Have already been smoothened by the life company, Do not have the highs and lows of investment return as in good investments years of life company
13
Why is it important that the customer must understand the sales proposal in full?
Because the impact of changes in investment condition on variable life policy is borne solely by the customer.
14
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
II, I, IV, III
15
Which one of the following statements is FALSE?
Variable life insurance policies offer investors policies with values and indirectly linked to the investment performance of the life company
16
Which of the following statements are TRUE?
The policy value of endowment policies is the cash value plus any accumulated dividends less any outstanding loans due at the time of surrender., The life company needs to maintain a separate account for variable life policies distinct From the general account.
17
What are the benefits available when investing in variable life funds?
The variable life funds offer policyholders an access to pooled or diversified portfolios , 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
18
Which of the following statements describe the differences between variable life products and participating products?
Variable life products allow policyholders to vary the premium payments unlike participating products., Variable life products can take the form of whole life or endowment policies with Participating products., Variable life products allow policyholders to pay future single premiums from time to time to add more units to his account unlike participating products.
19
What should be the withdrawal values after a year?
Php. 401,107.58
20
Which of the following statements about the difference between variable life policies and endowment policies are FALSE?
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, The benefits and risks of variable life and endowment policies directly accrue to the policyholders
21
Single premium variable life insurance policy:
Must be issued with a minimum death benefit
22
The fundamental differences between traditional participating life insurance policies and variable life insurance policies include _____________.
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, Variable life insurance policies offer the potential for higher returns, Traditional participating policies aim to produce a steady return by smoothing out market fluctuation
23
The protection cost under a variable life insurance policy ___________________.
Are generally covered by cancellation of units in the fund, Are generally met by explicit charges stipulated openly in the policy terms, Vary with age of policy owner and level of cover
24
Which of the following statements about twisting is FALSE?
It refers to an agent offering a prospect a special inducement to purchase a policy
25
Investing in bonds offer the following EXCEPT
It enables the investor an opportunity for capital appreciation
26
Which of the following is / are the main characteristic (s) of variable life policies?
The policies can be used for investment, as a source of regular savings and protection , The withdrawal values and protection benefits are determined by the investment
27
Which of the following statements is TRUE?
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, The life company needs to maintain a separate account for variable life policies distinct from the general account
28
Which of the following factors contribute to the specific risk of an investment:
Fraud by senior management, Financial leverage of the company
29
The following statement about sureender value under traditional participating life insurance products are TRUE
The amount of surrender value is usually higher than the amount under non – participating policies and it varies with the age of the assured, being lower at older ages
30
In risk-return profile of cash funds, bond funds, balanced funds, managed funds and equity funds, a risk-return graph will show that _____________
Higher return normally comes with higher risk, At the top end of the graph are the equity funds, The relatively risk-less cash funds sit at the bottom end of the graph
31
The characteristics of a variable life insurance include:
Its withdrawal value and protection benefits are determined by the investment performance of the underlying assets., 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, Its withdrawal value is normally the value of units allocated to the policy owner calculated at the bid price
32
Which of the following statements about variable life policies is TRUE?
The margin between the bid and offer price is used to cover the managements cost of the policy, The policy value is calculated based on the bid price of units allocated into the policy
33
Which one of the following statements about risks of investing in variable life funds is TRUE?
Policy owners who invest in variable life funds with high equity investment face higher risk but can expect to achieve higher return than the traditional life insurance product over the long term
34
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______:
Invest in shares of stocks and investors who buy such assets usually aim for capital appreciation
35
Which of the statements is true about CASH?
Amount invested in cash depends on size of the cashflow requirement
36
Which of the following statements about diversification in portfolio management is FALSE?
Diversification can completely eliminate the risk of investing in stocks in a portfolio.
37
Under a regular premium variable whole life plan
Premium top-ups and holidays, subject to the company’s administrative rules are usually allowed, Life protection is the main objective of the plan with investment as the nominal purpose, Withdrawals after the payment of a few years premium are usually allowed
38
The benefits of investing in variable life funds include ___________________
Policy owners have access to pooled or diversified portfolios of investment, 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, Policy owners can gain access to variable life funds managed by professional investment managers with proven track records
39
What is the most suitable investment instrument for an investor who is interested in protecting his principal and receiving a steady stream of income?
Fixed income securities
40
Which of the following statements about rebating are T_R_U_E_?
Rebating is prohibited under the Insurance Code, Rebating deals with offering the prospect a special inducement to purchase a policy
41
Variable life insurance policy owners may make withdrawals in terms of ____________.
d. Number of units through cancellation of units
42
Which of the following statements is FALSE?
Misrepresentation is a specific form of twisting
43
Which of the following information i NOT required to be disclosed to policyholders of variable life policies?
The net withdrawal value as of the statement date.
44
What are the advantages of investing in preferred shares?
It gives shareholders the right to a fixed dividend, Has the priority over company assets during a dissolution, They enjoy benefit of capital appreciation
45
The selling price under variable life insurance policy is:
The price at which units under the policy are offered for sale by the life company
46
Investing in bonds offers the following advantages EXCEPT
It enables the investor an opportunity for capital apprecition
47
Under variable life insurance policies ______________________
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, 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
48
The flexibility benefit of investing in variable life funds include _____________:
Policy owners can easily change the level of sum assured and switch their investment between funds, Policy owners can easily take premium holidays and add single premium to Top – ups, Variable life insurance policies offer the potential for higher returns
49
Risk can be classified in teo particular categories in relation to investment. They include________:
The risk of rate of return on the investment not matching up to the individual’s expectation, The risk of losing some or all of a person’s initial investment
50
The switching facility under variable life insurance policies is a very useful _____
For the purpose of financial planning by the policy owners
51
Which of the following statements about benefits in variable life fund is F_A_L_S_E?
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
52
The investment returns under variable life insurance policy _______________
Are not guaranteed, Are linked to the performance to of the investment fund managed by the life insurance company by the life insurance company, Fluctuate according to the rise and fall of market prices
53
Which of the following statements about investment objectives is FALSE?
People invest money in fixed deposits to produce high and guaranteed returns
54
The objective of satisfying customers need profitably can be achieved by and agent through
Extensive investment training by the company, The use of sales plan, where sales goals, strategies, and objectives are coordinated with the market analysis, segmentation and training
55
Which of the following statements about single premium variable life policies are TRUE?
There is no fixed term in a single premium variable life policy and therefore, they are technically whole life insurance, Top – ups or single premium injections are allowed in these plans
56
Diversification in investment involves __________________:
Reducing the risks of investment by putting one fund under management into several categories of investment
57
Which of the following BEST describes the policy benefits of variable life policies?
The policy benefits are directly linked to the investment performance of the underlying assets
58
A unit trust is:
Established by a trust deed which enables a trustee to hold the pool of money and assets in trust in behalf of the investor