ADVISOR TRAINING & DEVELOPMENT Page 8
28. Which of the following BEST describes the policy benefits of variable life policies?
A. The policy benefits are payable only in death and disability -FALSE
B. The policy benefits will depend on the short term performance of the company -FALSE
C. The policy benefits are directly linked to the investment performance of the underlying
assets -TRUE
D. The policy benefits are guaranteed -FALSE
29. Which of the following statements about option to top-up under variable life insurance products
is FALSE?
A. Policyowner may buy additional units in the variable life fund and these units will be
allocated to new variable life insurance policies. -FALSE
B. Further premiums at time of top-up will be used in full, after deducting charges for top-ups,
to purchase additional units of the variable life funds. -TRUE
C. To top-up a policy, the policyowner pays further single premium at the time of top-up. -TRUE
D. Policyowners are normally allowed to top-up their policies at any time, subject to a
minimum amount. -TRUE
30. Which of the following statements is FALSE?
A. Variable life insurance policies offer investors with values indirectly linked to the
investment performance of the life company. -FALSE
B. The life company will carry out a valuation of its funds yearly and any surplus may be
allocated to participating policy holder as cash dividends. -TRUE
C. Both whole life and endowment policies can be used as an investment media with benefits
that become payable at a future date. -TRUE
D. The investment element of variable life policies varies according to underlying assets of the
portfolio. -TRUE
31. Which of the following statements about rebating is/are TRUE?
I. Rebating is prohibited under the Insurance Code -TRUE
II. Rebating deals with offering the prospect a special inducement to purchase a policy -TRUE
III. Rebating will enhance the sales performance and uphold the prestige of an agent -FALSE
A. I and II
B. I and III
C. II and III
32. CHOOSE THE BEST ANSWER:
Why is it important that the customer understand the sales proposal in full?
A. Because the insurer does not guarantee any return -FALSE
B. Because the impact of changes in investment condition on variable life policy is borne
solely by the customer -TRUE
C. Because the agent may give the wrong recommendations -FALSE
D. Because the policyholder expects higher returns -FALSE