Variable Products Exam with questions
and well verified answers actual
exam!!! 2026
Separate Account - ANSWER -An investment pool funded by contributions to variable
contracts, including variable annuities and variable life insurance. These assets are kept
separate from the insurance company's general account
-acts like a family of mutual funds
Fixed Premium Variable Life Insurance - ANSWER --aka scheduled premium variable life
or just variable life
-fixed, level, and required premiums
-fixed and level DB, "guaranteed minimum death benefit" which runs to age 100
-access cash value through policy loans + pay interest
-when a policy loan is executed, both cash value and death benefit of the policy are reduced by
the loan amount
Flexible Premium Variable Life Insurance - ANSWER --aka variable universal life
-flexible premiums, which can be increased, decreased, or even omitted at the will by the
owner
-61 day grace period (entered when the cash value is insufficient to pay the next mortality
charge and the policy lapse if this deficiency is not corrected before the end of the grace
period)
-adjustable DB (proof of insurability required for an increase of DB and will cause increased
mortality charges)
,-cash value is accessed using partial withdrawals rather than policy loans (does not reduce DB
and no interest charges)
Fixed Annuities - ANSWER --premiums accumulate inside the general account
-contract provides a guaranteed minimum rate of return (when insurer is willing and able they
may pay a current ROR above the guarantee)
-FULLY protected against any loss of capital in a declining market
-inflation risk (decline in purchasing power)
-insurer bears risk
New York Life Actuarial method - ANSWER -the method that insurers use to convert net
investment returns into variable life product values is called
Variable Annuities - ANSWER -Annuities that have variable interest rates and benefits.
-values accumulate in separate account
-performance of separate account NOT guaranteed
-owner bears risk
Entire Contract Provision - ANSWER --generally located at the beginning of any insurance
contract
-It warns the consumers to read the full contract, once it has been delivered to them, because
the insurer will only be bound to honor what's written there
-10 day free look period
- the provision separates the insurer from the insurance sales process in that the insurer will
not be bound by any errors or omissions made by the agent during VERBAL sales presentation
10 day free look period - ANSWER -the amount of time the client has to review the
policy
Premiums Provision - ANSWER -provision that states that fixed premiums that are level
and required to be paid to age 100 or death of the insured if it occurs earlier
-insurer controls the premiums as to timing and amount
, Suicide Provision - ANSWER -If the insured knowingly misrepresents their health and
gets found out, or commits suicide, within the first 2 years of the contract, the insurer is
permitted to rescind the contract by returning the premiums and they are not bound by the
contract any further
incontestable - ANSWER -after 2 years a life insurance policy becomes
________________, meaning the insurer cannot fail to pay the death benefit, even in the face
of provable fraud or suicide
Assignment Provision - ANSWER -policy owner's right to assign the policy; 2 types:
absolute assignment- transfer all rights of ownership, permanent, new policy owner doesn't
need insurable interest in insured; collateral assignment- transfer of partial rights, usually done
to secure a loan, partial and temporary 'til debt is repaid
Misstatement of Age/ Gender Provision - ANSWER -This provision stipulates that if an
insured misstates his age or gender on an insurance application, the insurer will have the right
to recalculate the benefit that the premiums paid should have purchased, no matter when the
discovery is made, and to pay the adjusted amount in the event of a claim
grace period - ANSWER -is a period of time after a premium payment is due, but while
the payment has not been made, and yet the policy remains in force
31 days - ANSWER -fixed premium grace period is
*applies to whole life and fixed premium variable life
61 days - ANSWER -flexible (universal) grace period is
*applies to universal life and flexible premium
True - ANSWER -T or F: Should the insured die during the grace period, the death benefit
WILL BE PAID, but the insurer will subtract the overdue premium payment from the death
benefit
and well verified answers actual
exam!!! 2026
Separate Account - ANSWER -An investment pool funded by contributions to variable
contracts, including variable annuities and variable life insurance. These assets are kept
separate from the insurance company's general account
-acts like a family of mutual funds
Fixed Premium Variable Life Insurance - ANSWER --aka scheduled premium variable life
or just variable life
-fixed, level, and required premiums
-fixed and level DB, "guaranteed minimum death benefit" which runs to age 100
-access cash value through policy loans + pay interest
-when a policy loan is executed, both cash value and death benefit of the policy are reduced by
the loan amount
Flexible Premium Variable Life Insurance - ANSWER --aka variable universal life
-flexible premiums, which can be increased, decreased, or even omitted at the will by the
owner
-61 day grace period (entered when the cash value is insufficient to pay the next mortality
charge and the policy lapse if this deficiency is not corrected before the end of the grace
period)
-adjustable DB (proof of insurability required for an increase of DB and will cause increased
mortality charges)
,-cash value is accessed using partial withdrawals rather than policy loans (does not reduce DB
and no interest charges)
Fixed Annuities - ANSWER --premiums accumulate inside the general account
-contract provides a guaranteed minimum rate of return (when insurer is willing and able they
may pay a current ROR above the guarantee)
-FULLY protected against any loss of capital in a declining market
-inflation risk (decline in purchasing power)
-insurer bears risk
New York Life Actuarial method - ANSWER -the method that insurers use to convert net
investment returns into variable life product values is called
Variable Annuities - ANSWER -Annuities that have variable interest rates and benefits.
-values accumulate in separate account
-performance of separate account NOT guaranteed
-owner bears risk
Entire Contract Provision - ANSWER --generally located at the beginning of any insurance
contract
-It warns the consumers to read the full contract, once it has been delivered to them, because
the insurer will only be bound to honor what's written there
-10 day free look period
- the provision separates the insurer from the insurance sales process in that the insurer will
not be bound by any errors or omissions made by the agent during VERBAL sales presentation
10 day free look period - ANSWER -the amount of time the client has to review the
policy
Premiums Provision - ANSWER -provision that states that fixed premiums that are level
and required to be paid to age 100 or death of the insured if it occurs earlier
-insurer controls the premiums as to timing and amount
, Suicide Provision - ANSWER -If the insured knowingly misrepresents their health and
gets found out, or commits suicide, within the first 2 years of the contract, the insurer is
permitted to rescind the contract by returning the premiums and they are not bound by the
contract any further
incontestable - ANSWER -after 2 years a life insurance policy becomes
________________, meaning the insurer cannot fail to pay the death benefit, even in the face
of provable fraud or suicide
Assignment Provision - ANSWER -policy owner's right to assign the policy; 2 types:
absolute assignment- transfer all rights of ownership, permanent, new policy owner doesn't
need insurable interest in insured; collateral assignment- transfer of partial rights, usually done
to secure a loan, partial and temporary 'til debt is repaid
Misstatement of Age/ Gender Provision - ANSWER -This provision stipulates that if an
insured misstates his age or gender on an insurance application, the insurer will have the right
to recalculate the benefit that the premiums paid should have purchased, no matter when the
discovery is made, and to pay the adjusted amount in the event of a claim
grace period - ANSWER -is a period of time after a premium payment is due, but while
the payment has not been made, and yet the policy remains in force
31 days - ANSWER -fixed premium grace period is
*applies to whole life and fixed premium variable life
61 days - ANSWER -flexible (universal) grace period is
*applies to universal life and flexible premium
True - ANSWER -T or F: Should the insured die during the grace period, the death benefit
WILL BE PAID, but the insurer will subtract the overdue premium payment from the death
benefit
