6 Questions
Variable life insurance policy owners may make withdrawals in terms of:
Number of units or fixed monetary amount through cancellation of units.
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.
The investment returns under variable life insurance policy:
Are not guaranteed.
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.
Which of the following statements is FALSE?
Misrepresentation is a specific form of twisting.
Which factor does NOT influence the investment returns under a variable life insurance policy?
Fixed interest rates set by the insurer.
Study Notes
Variable Life Insurance Policy Features
- Policy owners can make withdrawals in terms of either a fixed monetary amount or by cancelling units.
- Policyholders can take loans against their variable life policies, but not up to the entire withdrawal value.
Flexibility Features of Variable Life Policies
- Policyholders cannot take loans against their variable life policies up to the entire withdrawal value.
Investment Returns Under Variable Life Insurance Policy
- Investment returns are not guaranteed.
- Returns are linked to the performance of the investment fund managed by the life insurance company.
- Returns fluctuate according to the rise and fall of market prices.
Policy Value and Accounting
- The policy value of endowment policies is the cash value plus any accumulated dividends less any outstanding loans due at the time of surrender.
- Life insurance companies need to maintain a separate account for variable life policies, distinct from the general account.
Misrepresentation
- Misrepresentation is a specific form of twisting.
Test your knowledge of variable life insurance policies, including features and benefits, withdrawals, and investment returns.
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