Variable Licensing Mock Exam (Set D) - Financial Wealth Planners
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Questions and Answers

In a variable life insurance policy, how can owners make withdrawals?

  • Number of units through cancellation of units
  • Number of units or fixed monetary amount through cancellation of units (correct)
  • Number of units of fixed monetary through reduction of the life cover sum assured
  • Fixed monetary amount only through reduction of the life cover sum assured

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

  • Policyholders may request for a partial withdrawal of the policy and the withdrawal amount will be met by cashing the units at the bid price.
  • Policyholders have the flexibility of switching from one fund to another provided it satisfies the company’s switching criteria
  • Policyholders can take loans against their variable life up to the entire withdrawal value of their policies (correct)
  • Policyholders have the flexibility of increasing or decreasing their premiums for regular premium variable life policies

    • What is true about the investment returns under variable life insurance policy?

  • Fluctuate according to the rise and fall of market prices
  • Are not guaranteed
  • Are assured
  • Are linked to the performance of the investment fund managed by the life insurance company (correct)

    • Which of the following is not a flexibility feature of variable life policies?

    <p>Policyholders cannot change the beneficiary of the policy</p> Signup and view all the answers

    What is required for policyholders to switch from one fund to another in variable life policies?

    <p>Fulfilling company’s switching criteria</p> Signup and view all the answers

    What happens when policyholders make withdrawals in terms of fixed monetary amount through reduction of the life cover sum assured?

    <p>The cash value of the policy decreases</p> Signup and view all the answers

    Which of the following statements about the policy value of variable life policies is TRUE?

    <p>The policy value of variable life policies is determined by the offer price at the time of valuation</p> Signup and view all the answers

    Which of the following statements is FALSE?

    <p>Misrepresentation is a specific form of twisting</p> Signup and view all the answers

    Which of the following statements about variable life policies is TRUE?

    <p>Offer price is used to determine the number of units to be credited to the account</p> Signup and view all the answers

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

    <p>Fixed income securities</p> Signup and view all the answers

    What are the disadvantages of investing in common shares?

    <p>Shares can become worthless if the company becomes insolvent</p> Signup and view all the answers

    Which of the following statements about the difference between variable life policies and endowment policies are FALSE?

    <p>The premiums and benefits of endowment policies are described at the inception of the policy whereas variable life are flexible as they are account driven</p> Signup and view all the answers

    Which of the following statements about twisting is FALSE?

    <p>Twisting is a facility allowing policyholders to switch to another variable life funds offered by the company</p> Signup and view all the answers

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