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Life Insurance Reviewer - Variable Part 4

Create an image representing variable life insurance, including elements like investment graphs, life insurance policy documents, and symbols of financial growth.

Life Insurance Knowledge Test

Test your knowledge on Variable Life Insurance with our engaging quiz designed for both professionals and enthusiasts. With 10 thought-provoking questions, you'll learn more about investment flexibility, protection costs, and the risks involved in investing in variable life funds.

Key Features:

10 challenging questions
Multiple choice format for easy understanding
Immediate scoring and feedback

10 Questions2 MinutesCreated by InvestmentGuide315

The flexibility of investing in variable life funds includes _______________.

I. Policy owner can easily change the level of sum assured and switch their investment between funds

II. Policy owners can easily take premium holidays and add single premium to top-ups

III. Variable life insurance products have a simple product design with a clear structure which cater separately for investment and insurance protection

IV. Policy owners can easily change the level of their premium payment

All of the choices

I, II and III

I, II and IV

I, III and IV

The switching facility under a variable life insurance policy is a very useful _________________

For the purpose of profit planning by the life policies

For the purpose of assets planning by the trustee

For the purpose of sales planning by the fund managers

For the purpose of financial planning by the policy owners

The protection costs under a variable life insurance policy __________________

I. Are met by a flat initial charges for regular premium loans

II. Are generally covered by cancellation of units in the fund

III. Are generally met by explicit charges stipulated openly

IV. Vary with age of policy owner and level of coverage

I, II and III

I, II and IV

I, III and IV

II, III and IV

Which of the following statements about risks of investing in variable life funds is TRUE?

Policy owners who are risk averse should buy variable life insurance policies with high equity investment

Investment in variable life funds which are fully invested in units of equity bonds are not suitable for policy owners who can tolerate the risks of short term fluctuation in their cash value

Policy owners who invest in variable life funds with high equity investment face greater risk but can expect to achieve higher return than the traditional life insurance product over the long term

Policy owner who are risk averse should not purchase life insurance policies with high protection and guaranteed cash and maturity values

What would be the withdrawal value after a year?

Offer Price P 16.00

Bid-offer spread 4.5%

Number of Units bought 25,000

Policy Fee 1,800

Admin and Mortality charge 8,750

Top-up Fee 700

Admin for Top-up 2,000

Sum assured is 190% of single premium or the value of the units, whichever is higher.

ASSUMPTIONS:

1. Charges and Fees are deducted after the single premium has been invested into the account

2. The growth rate of the unit price and the bid-offer spread is maintained at 8% and 4.5% respectively

P 432,000.00

P 420, 069.02

P 401, 107.58

P 412, 500.00

Advantages of investing in preferred shares are:

I. It gives shareholders the right to a fixed dividend

II. Has the priority over company assets during dissolution

III. They enjoy benefit of capital appreciation

I, II and III

I and II

I and III

II and III

Which one of the following statements about an investor diversifying his portfolio is FALSE?

A diversified portfolio provides for greater security to an investor having sacrifice the return for the portfolio

Diversification can completely eliminate the risk of investing in stocks in a portfolio

Diversification can involve purchasing different countries

Divesification helps to spread the portfolio risk by investing in different categories of investment in portfolio

With traditional life insurance products, the allocations to policy owners in the form of dividends __________________

I. Are not directly linked to the life company’s investment performance

II. Have already been smoothened by the life company

III. Do not have the highs and lows of investment returns as in good investment years of the life company

IV. Are not fixed at the inception of the policy, but are greatly dependent on the investment performance of the life company

I, II and III

I, II and IV

I, III and IV

II, III and IV

The objective of satisfying customers needs profitably can be achieved by an agent through

I. The giving of freebies to customers

II. Extensive investment training by the company

III. The use of sales plan, where sales goals, strategic and objectives are coordinated with market analysis, segmentation and targeting

IV. The giving of monetary assistance and discount to the customers

I and III

II and III

I, II and IV

II, III and IV

Risk can be classified into two particular categories in relation to investment. They include __________

I. The risk of not losing some or all of a person’s initial investment

II. The risk of rate of return on the investment not matching up to the individual’s expectation

III. The risk of rate of return on the investment matching up to the individual’s expectation

IV. The risk of losing some or all of a person’s initial investment

I and III

I and II

III and IV

II and IV

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