IC Variable Life (VUL) Reviewer 2023 Correctly solved

Variable Life Insurance policy owners may make withdrawals in terms of ______________. - ANSWER Number of units or fixed monetary amount through cancellation of units Which of the following statemements about flexibility features of variable life policies is false? - ANSWER Policyholders can take loans against their variable life up to the entire withdrawal value of their policies The investment returns under variable life insurance policy ______________. - ANSWER Are not guaranteed 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. I, III and IV Which of the following statements is TRUE? - ANSWER The policy value of variable life policies is determined by the offer price at the time of valuation The policy value of endowment policies is the cash value plus any accumulated dividends less any outstanding loans due at the time of the surrender The life company needs to maintain a separate account for variable life policies distinct from the general account II & III Which of the following statements is FALSE? - ANSWER Misrepresentation is a specific form of twisting Which of the following statemements about variable life policies is TRUE? - ANSWER Offer price is used to determine the number of units to be credited to the account The margin between the bid and offer price is used to cover the managements cost of the policy The policy value is calculated based on the bid price of units allocated into the policy II & III What is the most suitable investment instrument for an investor who is interested in protecting his principal and receiving a steady stream of income? - ANSWER Fixed income securities What are the disadvantages of investing in common shares? - ANSWER Dividends are paid more than fixed rates Investors are exposed to market and specific risks Shares can become worthless if company becomes insolvent II & III Which of the following statements about the difference between variable life policies and endowment policies are FALSE? - ANSWER The policy values of variable life policies directly reflect the performance of the fund of the life company The premiums and benefits of the endowment policies are described at the inception of the policy whereas variable life are flexible as the account driven The benefits and risks of variable life and endowment policies directly accrue to the policyholders I & III Which of the following statements about twisting is TRUE? - ANSWER Twisting is a special form of misrepresentation It refers to an agents including a policyholder to discontinue policy with another company without disclosing the disadvantage of doing so It includes misleading or incomplete comparison of policies It refers to an agent offering a prospect of special inducement to purchase a policy. I, II & III 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? - ANSWER Variable life policies