The investment returns under variable life insurance policy _____________. 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 market prices.

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 variation. 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 separate account for variable life policies distinct from the general account.

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

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

Which of the following statements about the difference 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 of variable life and endowment policies directly accrue to the policyholders.

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

What is the most suitable investment instrument for an investor who is interested in protecting his principal and receiving a steady stream of income?

Which of the following statements about variable life policies are 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 management cost of the policy III. The policy value is calculated based on the bid price of units allocated into the policy

Which of the following statements is FALSE?

A UNIT TRUST is ________________.

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

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 sum assured easily. III. The variable life policyholders can have access to a pool of qualified and trained professional fund managers.

Mr. Juan dela Cruz is currently earning P30,000.00 per month. He is 35 years old and 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?

Which of the following statements about twisting is FALSE?

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

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

Which one of the following BEST describes the policy benefits variable life policies?

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 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

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 premiums will be used to purchase units and 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 the investment monies to the value of the fund

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 corner

The characteristics of a variable life insurance policy 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

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

Which of the following statements is FALSE?

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

Which of the following statements about variable life policies are TRUE? II. The withdrawal value is not guaranteed III. The volatility of the returns depends on the investment strategy of the fund IIII. The variable life policyholder has direct control over the investment decisions of the variable life fund

Investing in bonds offers the following advantages EXCEPT…

Single premium variable life insurance policy:

Which of the following statements about characteristics of variable life policies are TRUE? I. Variable life policies generally have a 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 following statement about surrender value under traditional participating life insurance products is TRUE?

The fundamental difference 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 are made known to the policy owner at the onset and are 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

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 products have a simple product design with a clear structure which caters separately for investment and insurance protection IV. Policy owners can easily change the level of their premium payments

The switching facility under variable life insurance policies is very useful __________.

The protection costs under a variable life insurance policy __________. I. Are met by flat initial charges for regular premiums 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

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

What would be the withdrawal value after a year? Offer Price -------------------------- P 16.00 Bid-Offer spread ---------------- 4.5% Number of Units bought---- 25 000 Policy Fee --------------------------- 1 800 Admin and Mortality Charge --- 8 750 Top-up Fee --------------------------------- 700 Admin for Top-up ---------------------- 2 000 Sum assured is 190% of single premium or 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 bid-offer spread is maintained at 8% and 4.5%0 respectively.

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 dissolution III. They enjoy benefit of capital appreciation

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

With traditional participating life insurance products, the allocation 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 return as in good investment years of Life Company IV.Are not foxed at the inception of the policy, but are greatly dependent on the investment performance of the life company

The objective of satisfying customers need profitability can be achieved by an 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, strategies and objectives are coordinated with market analysis, segmentation and targeting IV. The giving of monetary assistance and discount to the customers

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 the person’s initial investment

Under a 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

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 withdrawals values and protection benefits are determined by the investment 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

Which of the following statements is true about CASH?

Which of the following statements about investment objectives is FALSE?

Variable life funds can be invested in any financial instruments including cash funds, bonds funds, equity funds, property funds, specialized funds and diversified funds. Equity funds means __________:

In risk-return profile of cash funds, bonds funds, balance funds, balanced funds, managed funds and equity funds, a risk-return graph will show that _______________: I. Higher return normally comes with a 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

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

The selling price under variable life insurance policy is:

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

Diversification in investment involves______________.

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

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

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 = Php 13.00 Bid-offer spread = 4% Single premium = Php 450,000 Policy fee = Php 1,800 Admin and mortality charges = 3% Sum assured is 200% of single premium or the value of the units, whichever is higher:

Which of the following statements BEST describes “variable life” policies?

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

Rank the following investment instruments in terms of their level of risks, from the least risky to the most risky. I. Cash and Deposits II. Derivatives III. A well-diversified investment portfolio of a company IV. Stock options

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

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

Investing in bonds offer the following EXCEPT

The flexibility benefit of investing in variable life funds include _________ I. Policyowners can easily change the level of sum assured and switch their investment between funds II. Policyowners 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