Which of the following statements are FALSE? I. The policy value of variable life policies is determined by the offer price at the time of valuation II. The policy value of endowme... Which of the following statements are FALSE? I. The policy value of variable life policies is determined by the offer price at the time of valuation II. The policy value of endowment policies is the cash value plus any accumulated dividends less any outstanding loans due at time of surrender III. The life company needs to maintain a separate account for variable life policies distinct from the general account.
Understand the Problem
The question is asking which statements regarding the valuation of variable life policies and endowment policies are false. We need to analyze each statement's accuracy based on insurance principles to determine which is incorrect.
Answer
Statements I and II are FALSE; Statement III is TRUE.
Statements I and II are FALSE. Statement III is TRUE.
Answer for screen readers
Statements I and II are FALSE. Statement III is TRUE.
More Information
Statement I is incorrect because the policy value of variable life policies is not determined solely by the offer price; it involves various factors including the performance of investment funds. Statement II is incorrect due to inaccurate details about determining the policy value. Statement III accurately describes a requirement for separate accounts.
Tips
A common mistake is assuming that the offer price alone determines the value of policies. Realizing that multiple factors influence valuation can help avoid such errors.
Sources
- [PDF] ILP MOCK EXAM 2014 - Quia - quia.com
- Variable Life Insurance- Agent Licensing Exam Prep Test - ProProfs - proprofs.com
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