IC VUL MOCK EXAM Questions with Correct Answers (Grade A+)
Question 1:
1. Variable life insurance policy owners may make withdrawals in terms of ___________
a. Number of unit or fixed monetary amount through cancellation of units
b. Number of unit or fixed monetary amount 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: A. Number of unit or fixed monetary amount through cancellation of units
Question 2:
1. Which one of the following statements about the flexibility features of variable life policies is FALSE?
a. Policy holders may request for a partial withdrawal of the policy and the withdrawal of the policy and the
withdrawal of the policy and the withdrawal amount will be met by cashing the units and bid price.
b. Policy holders can take loans against their variable life policy up to the entire withdrawal value of their
policies.
c. Policy holders have the flexibility of switching from one fund to another provided it satisfies the company's
switching criteria.
d. Policy holders have the flexibility of increasing or decreasing their premiums for regular premiums variable
life policies.
Answer: B. Policy holders can take loans against their variable life policy up to the entire withdrawal value
of their policies.
Question 3:
1. The returns under variable life insurance policy. ___ I. Are not guaranteed II. Are assured III. Are linked to
the performance of the investment fund management by the life company IV. Fluctuate according to the rise
and fall of market prices
a. I, II and III
b. I, II and IV
c. I, III and IV
d. II, III and IV
Answer: C. I, III and IV
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, Question 4:
1. Which of the following statements are TRUE? I. The policy value of variable life policies is determined by
the offer 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 lifer policies distinct from the general account.
a. I, and II
b. I, II and III
c. I, and II
d. II and III
Answer: B. I, II and III
Question 5:
1. Which of the following statements is FALSE?
a. Rebating 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 is a facility allowing policy holders to switch to another variable life funds offered by company.
Answer: C. Misrepresentation is a specific form of twisting
Question 6:
1. Which of the following statements about variable life policies are TRUE? I. Offer price is used to determine
the numbers of units to be cancelled to the amount 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 base 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
Answer: D. II and III
Question 7:
1. What is the most suitable investment instrument for an investor who is interested 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
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Question 1:
1. Variable life insurance policy owners may make withdrawals in terms of ___________
a. Number of unit or fixed monetary amount through cancellation of units
b. Number of unit or fixed monetary amount 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: A. Number of unit or fixed monetary amount through cancellation of units
Question 2:
1. Which one of the following statements about the flexibility features of variable life policies is FALSE?
a. Policy holders may request for a partial withdrawal of the policy and the withdrawal of the policy and the
withdrawal of the policy and the withdrawal amount will be met by cashing the units and bid price.
b. Policy holders can take loans against their variable life policy up to the entire withdrawal value of their
policies.
c. Policy holders have the flexibility of switching from one fund to another provided it satisfies the company's
switching criteria.
d. Policy holders have the flexibility of increasing or decreasing their premiums for regular premiums variable
life policies.
Answer: B. Policy holders can take loans against their variable life policy up to the entire withdrawal value
of their policies.
Question 3:
1. The returns under variable life insurance policy. ___ I. Are not guaranteed II. Are assured III. Are linked to
the performance of the investment fund management by the life company IV. Fluctuate according to the rise
and fall of market prices
a. I, II and III
b. I, II and IV
c. I, III and IV
d. II, III and IV
Answer: C. I, III and IV
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, Question 4:
1. Which of the following statements are TRUE? I. The policy value of variable life policies is determined by
the offer 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 lifer policies distinct from the general account.
a. I, and II
b. I, II and III
c. I, and II
d. II and III
Answer: B. I, II and III
Question 5:
1. Which of the following statements is FALSE?
a. Rebating 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 is a facility allowing policy holders to switch to another variable life funds offered by company.
Answer: C. Misrepresentation is a specific form of twisting
Question 6:
1. Which of the following statements about variable life policies are TRUE? I. Offer price is used to determine
the numbers of units to be cancelled to the amount 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 base 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
Answer: D. II and III
Question 7:
1. What is the most suitable investment instrument for an investor who is interested 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
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