VUL MOCK EXAM (2025) Questions with Correct Answers (Grade
A+)
Question 1: Variable life insurance policy owners may make withdrawals interms of
________________.*
A. Number of units or fixed monetary amount through cancellation of units.
B. Number of units of fixed monetary through reduction of the life cover sum assured.
C. Fixed monetary amount only through reduction of the life cover sum assured.
D. Number of units through cancellation of units.
Answer: D. Number of units through cancellation of units.
Question 2: Which of the following statements about flexibility features of variable life policies is false?
A. Policyholders may request for a partial withdrawal of the policy and the withdrawal amount will be met by
cashing the unitsa at the bid price.
B. Policyholderscan take loans against their variable life up to the entire withdrawal value of their policies.
C. Policyholders have the Flexibility of swithcing from one fund to another provided it satisi2es the company's
switching criteria.
D. Policyholders have the flexibility of increasing or decreasing their premiums for regular premium variable
life policies.
Answer: B. Policyholderscan take loans against their variable life up to the entire withdrawal value of their
policies.
Question 3: The investment returns under variable life insurance policy ______________ I. Are not
guaranteed II. Are assured IlI. Are linked to the performance to of the investment fund managed by the
life insurance company IV. Fluctuate according to the rise and fall of market prices
A. I, II AND III
B. I, II, IV
C. I, III, IV
D. II, III, IV
Answer: C. I, III, IV
Page 1
,Question 4: Which of the following statements is TRUE? 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 III. 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
A. I, II
B. I, II, III
C. I, III
D. II & III
Answer: D. II & III
Question 5: Which of the following statements is FALSE?*
A. Rebating is to offer a prospect a special inducement to purchase a policy.
B. Twisting is a specific form of misrepresentation.
C. Misrepresentation is a specific form of twisting.
D. Switching iis a facility allowing the policyholders to switch to another variable life funds offered by the
company.
Answer: C. Misrepresentation is a specific form of twisting.
Question 6: which of the following statement about Variable Life is true? I. Offer price is used to
determine the number of units to be credited to the account. II. the margin between the bid and the
offer price is used to cover the management costs of the policy. III. The policy value is calculated based
on the bid price of units allocated in the policy. *
A. I, II, III
B. I, II
C. I, III
D. II, III
Answer: D. II, III
Question 7: What is the most suitable investment instrument for an investor who is interested in
protecting his principal and receiving a steady stream of income?*
A. Equities
B. Warrants
C. Variable Life Policies
D. Fixed income securities
Answer: D. Fixed income securities
Page 2
, Question 8: What are the disadvantages of investing in common shares? I. Dividends are paid more
than fixed rates II. Investors are exposed to market and specific risks III. Shares can become worthless
if company becomes insolvent *
A. I, II
B. I, III
C. II, III
D. I, II, III
Answer: C. II, III
Question 9: Which of the following statements about the difference between variable life policies and
endowment policies are false? I. The policy values of variable life policies directly reflect the
performance of the fund of the life company II. The premiums and benefits of the endowment policies
are described at the inception of the policy whereas variable life are flexible as they are account driven
III. The benefits and risks of variable life and endowment policies directly accrue to the policyholders*
A. I, II
B. I, II, III
C. I, III
D. II, III
Answer: D. II, III
Question 10: Which of the following statements about twisting is FALSE?*
A. Twisting is a special form of misrepresentation.
B. It refers to an agents including a policyholder to discontinue policy witht another company without
disclosing the disadvantage of doing so.
C. It includes misleading or incomplete comparison of policies.
D. It refers to an agent offering a prospect a special inducement to purchase a policy.
Answer: D. It refers to an agent offering a prospect a special inducement to purchase a policy.
Question 11: Mr. Juan dela Cruz is currently earning Php 30,000 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?*
A. Participating Endowment
B. Variable life policies
C. Participating whole life
D. Annuities
Answer: C. Participating whole life
Page 3
A+)
Question 1: Variable life insurance policy owners may make withdrawals interms of
________________.*
A. Number of units or fixed monetary amount through cancellation of units.
B. Number of units of fixed monetary through reduction of the life cover sum assured.
C. Fixed monetary amount only through reduction of the life cover sum assured.
D. Number of units through cancellation of units.
Answer: D. Number of units through cancellation of units.
Question 2: Which of the following statements about flexibility features of variable life policies is false?
A. Policyholders may request for a partial withdrawal of the policy and the withdrawal amount will be met by
cashing the unitsa at the bid price.
B. Policyholderscan take loans against their variable life up to the entire withdrawal value of their policies.
C. Policyholders have the Flexibility of swithcing from one fund to another provided it satisi2es the company's
switching criteria.
D. Policyholders have the flexibility of increasing or decreasing their premiums for regular premium variable
life policies.
Answer: B. Policyholderscan take loans against their variable life up to the entire withdrawal value of their
policies.
Question 3: The investment returns under variable life insurance policy ______________ I. Are not
guaranteed II. Are assured IlI. Are linked to the performance to of the investment fund managed by the
life insurance company IV. Fluctuate according to the rise and fall of market prices
A. I, II AND III
B. I, II, IV
C. I, III, IV
D. II, III, IV
Answer: C. I, III, IV
Page 1
,Question 4: Which of the following statements is TRUE? 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 III. 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
A. I, II
B. I, II, III
C. I, III
D. II & III
Answer: D. II & III
Question 5: Which of the following statements is FALSE?*
A. Rebating is to offer a prospect a special inducement to purchase a policy.
B. Twisting is a specific form of misrepresentation.
C. Misrepresentation is a specific form of twisting.
D. Switching iis a facility allowing the policyholders to switch to another variable life funds offered by the
company.
Answer: C. Misrepresentation is a specific form of twisting.
Question 6: which of the following statement about Variable Life is true? I. Offer price is used to
determine the number of units to be credited to the account. II. the margin between the bid and the
offer price is used to cover the management costs of the policy. III. The policy value is calculated based
on the bid price of units allocated in the policy. *
A. I, II, III
B. I, II
C. I, III
D. II, III
Answer: D. II, III
Question 7: What is the most suitable investment instrument for an investor who is interested in
protecting his principal and receiving a steady stream of income?*
A. Equities
B. Warrants
C. Variable Life Policies
D. Fixed income securities
Answer: D. Fixed income securities
Page 2
, Question 8: What are the disadvantages of investing in common shares? I. Dividends are paid more
than fixed rates II. Investors are exposed to market and specific risks III. Shares can become worthless
if company becomes insolvent *
A. I, II
B. I, III
C. II, III
D. I, II, III
Answer: C. II, III
Question 9: Which of the following statements about the difference between variable life policies and
endowment policies are false? I. The policy values of variable life policies directly reflect the
performance of the fund of the life company II. The premiums and benefits of the endowment policies
are described at the inception of the policy whereas variable life are flexible as they are account driven
III. The benefits and risks of variable life and endowment policies directly accrue to the policyholders*
A. I, II
B. I, II, III
C. I, III
D. II, III
Answer: D. II, III
Question 10: Which of the following statements about twisting is FALSE?*
A. Twisting is a special form of misrepresentation.
B. It refers to an agents including a policyholder to discontinue policy witht another company without
disclosing the disadvantage of doing so.
C. It includes misleading or incomplete comparison of policies.
D. It refers to an agent offering a prospect a special inducement to purchase a policy.
Answer: D. It refers to an agent offering a prospect a special inducement to purchase a policy.
Question 11: Mr. Juan dela Cruz is currently earning Php 30,000 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?*
A. Participating Endowment
B. Variable life policies
C. Participating whole life
D. Annuities
Answer: C. Participating whole life
Page 3
