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WM IV 2% Which of the following funds comprises a higher proportion of equity and a lower proportion of fixed-income instruments? A, Bond Funds 8. Cash Funds (© Managed Funds . Mixed Funds Which of the following are the main characteristics of Variable Life insurance policies? |. The policies can be used for investments, protection, |. The withdrawal and protection benefit performance of the underiying assets Il, The net withdrawal values of the policies are the gross withdrawal values shown in the policy which includes cash dividends up to the date of surrender, less all indebtedness, includes interests. as a source of regular savings and are determined by the investment A. lonly llonly © | & ilonly A & 4, Which of the following statements are FALSE? |. The policyholders may request a partial withdrawal be met by cashing the unils at the offer price. I. The structure of charges and the investment content of a Variable life policy are specified in the policy document and the policy statement, Some Variable Life policies grant loans to policyholders which percentage of the cash value. 'V. Commissions and office ext which are variable. of the policy and the amount will Mm, is limited to a penses are met by a variety of implicit charges, some of A. |&llonly ©) !& only ‘ie 6, 2011 Version 1 Page to 12@ VUL MOCK EXAM 4 ete LIE C. W&lilonly D. All of the above 5. Which of the following statements about the feature of Regular Premium Variable Life Policy are TRUE? 1. Top-ups are usually allowed. ll. The level of cover can be varied. Ill, Premium holidays are usually allowed. A. 1&llonly B. 1&illonly Wt only Wa Bl Which one of the following statements is NOT TRUE about the benefits of investing in a Variaible life insurance policy? A. The fund provides a highly diversified portfolio, thus, lowering the risk of investment. 8, The fund relieves the investor from the hassle of administering his/her investment. ) The fund ensures definite high yield for an investor since it is managed by professionals who are well-versed in the management of risk of investment portfolio. D. The fund enables small investors to participate in a pool of diversified portfolio in which he/she is unlikely to have access to with low investment capital. Which of the following statements describes the difference between Variable Life insurance products and Traditional participating products? |. Variable life insurance products allow policyholders to change the premium payments but traditional participating life products do nat. Variable life insurance products can take the form of Whole Life or Endowment policies but Traditional life policies can not. Variable life insurance products allow the policyholders to pay future single premiums from time to time to add more units to his account but — traditional life participating products do not, lonly C6) 18. thonly W& tllonly D. Nl u Which of the following are some of the flexibility features of Variable life insurance policies? L. Partial Withdrawal il. Variation in sum assured I, Guaranteed withdrawal values Jn 6, 2011 Version 4 Page 20 12@ PLAY EE VUL MOCK EXAM 4 A. tlonly only 1 &ilonly DB. iN & i 9. Which of the following statements about single premium variable life policies are TRUE? There is no fixed term in a single premium variable life policy and therefore. it is technically whole life insurance. ll. Top-ups or single premium injections are allowed. i, Policyholders have the flexibility of varying the life coverage. A. 1& ll 1a il Wal B.A, & ll 10. The benefits of investing in variable life fund include: Policyholders have access to a pooled and diversified portfolio of investment, i The policyholder can easily change the level of premium payments as the product design of variable life insurance policies have clear structures which cater separately for investment and insurance protection. Policyholders can gain access 10 variable life funds managed by professional invesiment managers. 1V. The policyholder is relieved of the day to day administration of his investment. M. A. ttl, Bell B. LHL &IV Lill, & IV. All of the above™ \1. The flexibility benefits of investing in variable life funds include: |. Policyholders can easily change the level of sum insured and switch their invesiments belween funds. Policyhalders can easily take premium holidays and add single premium top-ups. Variable life insurance products have simple product design with a clear structure which caters separately for investment and insurance protection. Policyholders can easily change the level of their premium payment. U1 ML Vv. Atl, & ll L&I Will, 3 IV WA, & IV A ® iS D June 6, 2044 Version 4 Page 3 of 12@ Prvigceny was UL Mock Exam 4 D. Its yield potential is high, 21. These statements are true EXCEPT A.,No regular income may be gained from investing in commodities. Investing in fixed deposits gives high guaranteed returns, 5. pegPle invest money to enhance a comfortakis star indard of living. D. People invest money to provide funds for the hi igher education of their children, 22. For variable life policy, the definition of selling price is: @) the price at which units under the policy B. It is also known as the bid price. C. The price at which units under the Policy are bought back by the life company. ©. Iisa fixed amount throughout the life of the pales, Y's offered for sale by the life company. lly invested in units of equity funds are not sullable for policyowners who can tolerate the risks of short term fluctuation in their Cash valve. ©Poiicy owners who invest in variable life fun tisk but can expect to achieve higher retur high equily investment, D. Policy owners who are investment, ‘ds with high equity investment face greater n than traditional fife insurance policies with "sk averse should buy variable life policies with high equity ¢ The policy owner pays further single premium to make a top-up. 8. Normally, policy owners are allowed to make a top-up on their policies at any time subject to. a minimum amount. Policy Owners may buy additional units of variable life °. Further premiums at the time of top-up will be used in full after deducting charges to Purchase additional units of the variable life funds 25, If the current offer price = ® P 240 B. P2.50 P 2.50 and the Bid offer spread = 4%, Calculate the Bid Price Sune 6, 2011 Version 4 Page 6 of 12