The differences between traditional participating life insurance and variable life insurance include I. Variable life insurance policies are less likely to offer more choices in te... The differences between traditional participating life insurance and variable life insurance 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 is made known to the policy owner at the outset and is invested in a separately identifiable fund which is made up 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. A) II, III and IV B) I, II and IV C) I, II and III D) I, III and IV
Understand the Problem
The question is comparing two types of life insurance policies, traditional participating life insurance and variable life insurance. It lists statements about both types and asks to identify which combination of statements is correct regarding their differences.
Answer
A) II, III, and IV
The final answer is A) II, III, and IV
Answer for screen readers
The final answer is A) II, III, and IV
More Information
Variable life insurance policies offer the possibility for higher returns and have a transparent investment structure disclosed to the policy owner from the start. Traditional participating life insurance aims to provide consistent returns by mitigating market variability.
Tips
A common mistake is to assume variable life insurance offers fewer investment choices, but it generally provides a wide array of options.
Sources
- [PDF] ILP MODULE QUIZZES [2014] - quia.com
- Understanding Variable Universal Life (VUL) insurance: A guide for ... - agentblog.nationwide.com
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