​is a type of permanent life insurance policy with a built-in savings component that allows for the investment of the cash value

Variable Universal

Life

1. Variable life insurance policy owners may make withdrawals in terms of________.​

D.​ Number of units through cancellation of units

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2. Which of the following statements about flexibility features of variable life policies is false?

b. Policyholders can take loans against their variable life up to the entire withdrawal value of their policies

3. The investment returns under variable life insurance policy________

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I.Are not guaranteed

III.Are linked to the performance of the investment fund managed by the life insurance company

IV.Fluctuate according to the rise and fall of market prices

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c. I, III and IV

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4. Which of the following statements is TRUE?

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II. 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 (Endownment Policy= Cash Value + Devidends - Loans)

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III.The life company needs to maintain a separate account for variable life policies distinct from the general account

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d. II & III ​

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5. Which of the following statements is FALSE?

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c. Misrepresentation is a specific form of twisting

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6. Which of the following statements about variable life policies is TRUE?

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II.The margin between the bid and offer price is used to cover the managements cost of the policy

III.The policy value is calculated based on the bid price of units allocated into the policy

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d. II & III

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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?

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d. Fixed income securities

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8. What are the disadvantages of investing in common shares?

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II.Investors are exposed to market and specific risks

III.Shares can become worthless if company becomes insolvent

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c. II & III​

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​9. Which of the following statements about the difference between variable life policies and endowment policies are FALSE?

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II.The premiums and benefits of the endowment policies are described at the inception of the policy whereas variable life are flexible as the are account driven

III.The benefits and risks of variable life and endowment policies directly accrue to the policyholders

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d. II & III

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​ 10. Which of the following statements about twisting is FALSE?

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d. It refers to an agent offering a prospect a special inducement to purchase a policy ​