Podcast
Questions and Answers
Variable life insurance policy owners may make withdrawals in terms of?
Variable life insurance policy owners may make withdrawals in terms of?
- Fixed monetary amount only through the reduction of the life cover sum assured
- Number of units of fixed monetary through reduction of the life cover sum assured
- Number of units or fixed monetary amount through the cancellation of units (correct)
- Number of units through the cancellation of units (correct)
Which of the following statements about the flexibility features of variable life policies is false?
Which of the following statements about the 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 (correct)
- Policyholders have the flexibility of increasing or decreasing their premiums for regular premium variable life policies
- Policyholders have the flexibility of switching from one fund to another provided it satisfies the company's switching criteria
- 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
The investment returns under variable life insurance policy?
The investment returns under variable life insurance policy?
- Are a fixed rate (correct)
- Are not guaranteed, are assured, are linked to the performance of the investment fund managed by the life insurance company
- Fluctuate according to the rise and fall of market prices (correct)
- Are guaranteed (correct)
Which of the following statements is TRUE?
Which of the following statements is TRUE?
Which of the following statements is FALSE?
Which of the following statements is FALSE?
Which of the following statements about variable life policies is TRUE?
Which of the following statements about variable life policies is TRUE?
What is the most suitable investment instrument for an investor who is interested in protecting his principal and receiving a steady stream of income?
What is the most suitable investment instrument for an investor who is interested in protecting his principal and receiving a steady stream of income?
What are the disadvantages of investing in common shares?
What are the disadvantages of investing in common shares?
Which of the following statements about the difference between variable life policies and endowment policies?
Which of the following statements about the difference between variable life policies and endowment policies?
Which of the following statements about twisting is FALSE?
Which of the following statements about twisting is FALSE?
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?
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?
What are the benefits available when investing in variable life funds?
What are the benefits available when investing in variable life funds?
A unit trust is?
A unit trust is?
Flashcards are hidden until you start studying
Study Notes
Variable Life Insurance
- Variable life insurance allows policy owners to make withdrawals in various forms including cancellation of units or fixed monetary amounts.
- Flexibility features include partial withdrawals, loans against withdrawal value, and switching between funds as per company criteria.
- Investment returns in variable life insurance are not guaranteed and depend on the performance of managed investment funds.
Policy Value and Characteristics
- The policy value relates to offer price at valuation, while endowment policies factor in cash value and accumulated dividends.
- Life insurance companies must maintain separate accounts for variable life policies, distinct from general accounts.
Misrepresentation and Inducement
- Rebating involves special inducements for purchasing policies; twisting is a form of misrepresentation, while misrepresentation leads to twisting.
- Switching allows policyholders to move between variable life funds without penalties.
Investment Instruments and Risks
- Fixed income securities are ideal for investors wanting to protect principal and ensure steady income.
- Disadvantages of common shares include exposure to market risks and the possibility of shares becoming worthless.
Comparison Between Policies
- Variable life policies' value reflects fund performance, unlike endowment policies which have set benefits.
- Benefits and risks of variable life policies accrue directly to policyholders, offering them a more dynamic experience.
Understanding Twisting
- Twisting is misleading and involves encouraging a client to discontinue an existing policy without full disclosure of the disadvantages.
- It may involve comparisons that are misleading or incomplete.
Recommendations for Mr. Juan dela Cruz
- For a 35-year-old individual earning Php 30,000 monthly with moderate risk tolerance, participating endowment or variable life policies are suggested due to their balance of risk and returns.
Benefits of Variable Life Funds
- They offer access to diversified portfolios and flexible premium payments, including premium holidays and adjustments to the sum assured.
- Policyholders benefit from access to professional fund management expertise.
Understanding Unit Trusts
- A unit trust is established through a trust deed where a trustee manages pooled funds and assets on behalf of investors.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
