VARIABLE LIFE LICENSING MOCK EXAM (Set D)

VARIABLE LIFE LICENSING MOCK EXAM (Set D)

NAME:

BRANCH:

SCORE:

Instructions: Please encircle the correct answer.

One. Variable life insurance policy owners may make withdrawals in terms of A or D through cancellation of a. Number of units or fixed monetary amount through cancellation of units 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

Number of units through cancellation of units

Two. 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 units at the bid price.

Policyholders can take loans against their variable life up to the entire withdrawal value of their policies False letter B kasi no loan tayo c. Policyholders have the flexibility of switching from one fund to another provided it satisfies the company's switching criteria d. Policyholders have the flexibility of increasing or decreasing their premiums for regular premium variable life policies

Three. The investment returns under variable life insurance policy

I. Are not guaranteed

Are assured Are linked to the performance to of the investment fund managed by the life insurance company Fluctuate according to the rise and fall of market prices

IV

Not assured ang investment sa insurance kaya II Lang ang di kasama a. I, II and III

b. I, II and IV

c. I, III and IV

d. II, III and IV

Four. 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 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 Pag nakita word na offer price yan na agad di kasama kasi di tayo nagooffer ng price a. I & II

b. I, II & III

c. I & III

II & III

Five. 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 d. Switching is a facility allowing the policyholders to switch to another variable life funds offered by the company Clue word : ung first word ending sa -ing ung tatlo , ung naiba mali Scanned by CamScanner c Misrepresentation is a specific form of twisting

Ung first word offerprice ang di kasama

Letter C ang tamang sagot ung may word na DIRECTLY parehas sa sentence a. I & II

I, II & III c. I & III C.I and III

Thirteen. 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 with another company without disclosing the disadvantage of doing so

False letter D kasi ung pagbigay discount rebating 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 tawag dun

Eleven. Mr. Juan dela Cruz is currently earning Philippine thirty thousand pesos per month. He is thirty-five 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

Participating whole life b. Variable life policies d. Annuities

Twelve. What are the benefits available when investing in variable life funds?

The variable life funds offer policyholders an access to pooled or diversified portfolios

II. The variable life policyholders can vary his premium payments, take premium holidays, add single premium top-ups and change the level of the sum assured easily

III. The variable life policyholder can have access to a pool of qualified and trained professional fund managers Ill di kasama kasi wala direct a. I & II access ang policyholder sa fund at eastspring investment b. I & III fund manager ni pru c. I, II & III

d. II & III

Thirteen. Rank the following in terms of their liquidity, from the least liquid to the most liquid:

I. Short term securities

Letter D TAMANG SAGOT Properties Equities Short term Cash

II. Property

III. Cash

IV. Equities

PESC

a. IV, II, III, I

b. III, I, IV, II

II, I, IV, III

d II, IV, I, III

Fourteen. A unit trust is Established by trust deed

Seventeen. Which of the following BEST describes the policy benefits of variable life policies?

a. The policy benefits are payable only on death or disability b. The policy benefits will depend on the long-term performance of the life company. c. The policy benefits are directly linked to the investment performance of the underlying assets d. The policy benefits are guaranteed

Clue word : Directly linked

Eighteen. Why is it important that the customer must understand the sales proposal in full?

a. Because the insurer does not guarantee any return

Because the impact of changes in investment condition on variable life policy is borne solely by the customer.

Clue word : Borne solely kasi pwede ipersonalized ang policy ng client based sa needs at wants niya c. Because the agent may give the wrong recommendations d. Because the policyholder expects higher returns

Nineteen. Which of the following statements about rebating are TRUE?

I. Rebating is prohibited under the Insurance Code

II. Rebating deals with offering the prospect a special inducement to purchase a policy

III. Rebating will enhance the sales performance and uphold the prestige of an agent.

Bawal rebating. Rebating is like discounting

@ I & II

b. I & III

c. II & III

Twenty. Which one of the following statements is FALSE?

Variable life insurance policies offer investors policies with values and indirectly linked to the investment performance of the life company

False kasi dapat directly b. Life company will carry out a valuation of its funds yearly and any surplus may be allocated to participating policyholder as cash dividends c. Both Whole Life and Endowment policies can be used as an investment media with benefits that become payable at a future date d. The investment element of Variable life policies varies according to underlying assets of the portfolio

Twenty-one. Which of the following statements about option top-up under variable life insurance is false?

a. Policy owners may buy additional units of the variable life fund and these units will be allocated to new variable life insurance policies Not new kung additional units b. Further premiums at time of the top-up will be used in full, after deducting langges for top-ups, to purchase additional units of the variable life funds c. Top-up policy, the policy owner pays further single premium at the time of the top-up d. Policy owners are normally allowed to top-up their policies at any time, subject to a minimum amount

Twenty-two. The characteristics of a variable life insurance include

I. Its withdrawal value and protection benefits are determined by the investment performance of the underlying assets.

II. Its protection costs are generally met by implicit charges

III. Its commission and company expenses are met by a variety of explicit charges with normally six months notice given by the life companies prior to any change

IV. Its withdrawal value is normally the value of units allocated to the policy owner calculated at the bid price a. I, II & III b. II, III & IV c. I, II & IV

I, III & IV

Twenty-nine. The flexibility benefit of investing in variable life funds include

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

Policy owners can easily take premium holidays and add single premium to Top-ups

III. Variable life insurance policies offer the potential for higher returns

Four. Traditional participating policies aim to produce a steady return by smoothing out market fluctuation a. All of the above b) One, Two, and Three c. One, Two, and Four

Traditional is not variable d. One, Three, and Four

Thirty. The fundamental differences between traditional participating life insurance policies and variable life insurance policies include

One. Variable life insurance policies are less likely to offer more choices in terms of the type of investment funds

Two: The investment elements of variable life insurance policies is made known to the policy owner at the outset and is invested in a separately identifiable fund which is made up of units of investment Three. Variable life insurance policies offer the potential for higher returns

Four. Traditional participating policies aim to produce a steady return by smoothing out market fluctuation a. One, Three, and Four

Six Two, Three, and Four c. One, Two, Three d. One, Two, and Four

Thirty-one. The switching facility under variable life insurance policies is a very useful a. For the purpose of profit planning by the life policies Clueword: financial planning b. For the purpose of assets planning by the trustee c. For the purpose of sales planning by the fund managers d) For the purpose of financial planning by the policy owners

Thirty-two. The following statement about surrender value under traditional participating life insurance products are TRUE?

a. Cash value is paid when yearly renewable term insurance policy is surrendered b. When a participating insurance policy is surrendered, the surrender value is calculated by multiplying the bid price with the number of units

The amount of surrender value is usually higher than the amount under non-participating policies and it varies with the age of the assured, being lower at older ages d. In the case of participating policies, the net cash surrender value includes the surrender value of the paid-up addition up to the date of surrender

Thirty-three. Which one of the following statements about risks of investing in variable life funds is TRUE?

a. Policy owners who are risk averse should buy life insurance policies with high equity investment b. 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 higher risk but can expect to achieve higher return than the traditional life insurance product over the long term d. Policy owners who are risk averse should not purchase life insurance policies with high protection and guaranteed cash and maturity values

High risk high return on variable insurance/VUL

This material is solely for the information, use and private circulation of Pru Life UK and may not be published, circulated, or win consent.

Twenty-nine. The flexibility benefit of investing in variable life funds include

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

Policy owners can easily take premium holidays and add single premium to Top-ups

Three. Variable life insurance policies offer the potential for higher returns

Four. Traditional participating policies aim to produce a steady return by smoothing out market fluctuation a. All of the above b) One, Two, and Three c. One, Two, and Four

Traditional is not variable d. One, Three, and Four

Thirty. The fundamental differences between traditional participating life insurance policies and variable life insurance policies include

One. Variable life insurance policies are less likely to offer more choices in terms of the type of investment funds

Two: The investment elements of variable life insurance policies is made known to the policy owner at the outset and is invested in a separately identifiable fund which is made up of units of investment Three. Variable life insurance policies offer the potential for higher returns

Four. Traditional participating policies aim to produce a steady return by smoothing out market fluctuation a. One, Three, and Four

Six Two, Three, and Four c. One, Two, Three d. One, Two, and Four

Thirty-one. The switching facility under variable life insurance policies is a very useful a. For the purpose of profit planning by the life policies Clueword: financial planning b. For the purpose of assets planning by the trustee c. For the purpose of sales planning by the fund managers d) For the purpose of financial planning by the policy owners

Thirty-two. The following statement about surrender value under traditional participating life insurance products are TRUE?

a. Cash value is paid when yearly renewable term insurance policy is surrendered b. When a participating insurance policy is surrendered, the surrender value is calculated by multiplying the bid price with the number of units

The amount of surrender value is usually higher than the amount under non-participating policies and it varies with the age of the assured, being lower at older ages d. In the case of participating policies, the net cash surrender value includes the surrender value of the paid-up addition up to the date of surrender

Thirty-three. Which one of the following statements about risks of investing in variable life funds is TRUE?

a. Policy owners who are risk averse should buy life insurance policies with high equity investment b. 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 higher risk but can expect to achieve higher return than the traditional life insurance product over the long term d. Policy owners who are risk averse should not purchase life insurance policies with high protection and guaranteed cash and maturity values

High risk high return on variable insurance/VUL

This material is solely for the information, use and private circulation of Pru Life UK and may not be published, circulated, or win consent.

Thirty-four. What should be the withdrawal values after a year?

Forty-six pesos

Offer Price =

Bid-Offer Spread =

Four point five percent

Twenty-five thousand

Number of units bought =

Policy Fee

One thousand eight hundred

Admin and Mortality Charge

Seven hundred

Top-up Fee

Two thousand

Admin for Top-up

Sum assured is one hundred ninety percent of single premium or the value of units, whichever is higher.