Which of the following statements about variable life policies are TRUE? I. Offer price is used to determine the number of units to be cancelled to the account II. The margin betwe... Which of the following statements about variable life policies are TRUE? I. Offer price is used to determine the number of units to be cancelled 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 A) I, II and III B) I and II C) I and III D) II and III
Understand the Problem
The question is asking which statements about variable life policies are true among the given options. It involves understanding terms related to variable life insurance, such as offer price, bid price, and policy value.
Answer
B) I and II
The final answer is B) I and II
Answer for screen readers
The final answer is B) I and II
More Information
Statement I is true as the offer price is used to cancel units from the account. Statement II is also true because the margin between the bid and offer price covers management costs. Statement III is false; the policy value is determined by the bid price, not offer price.
Tips
A common mistake is confusing the bid and offer price in determining the policy value. Also, ensure understanding of the terms 'bid price', 'offer price', and the role of management costs in variable life policies.
Sources
- VUL MOCK EXAM 2 | Quizalize - resources.quizalize.com
- Variable Life Insurance- Agent Licensing Exam Prep Test - ProProfs - proprofs.com
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