Chapter 4-Variable Products

All of the following are guaranteed features in a variable life insurance policy, EXCEPT: Select one: a. Death benefit c. Premium rate d. Period of death protection

Cash value

All of the following are features of variable universal life insurance, EXCEPT: Select one: a. Flexible premiums b. Cash value d. Death benefit option A or B

Death protection is not deducted from cash value

All of the following policies could be offered as variable policies, EXCEPT: Select one: a. Ordinary whole life c. Joint life d. Universal

Decreasing term

Which of the following statements are NOT correct regarding variable universal life contract charges and fees:

Interest earned is credited to the death benefit.

Joanna has selected a variable universal life policy because it meets her needs. Which of the following is not a characteristic of a variable universal policy?

It has no cash value.

What is the primary purpose of the Investment Company Act of 1940?

Requires insurer to maintain a separate account for variable investments

Hank is looking for the best life insurance policy to meet his needs. He has a limited amount of income and assets, but needs a large amount of insurance protection. Which policy should Hank's insurance agent recommend?

Term life insurance

Because variable contracts are equity products, they are subject to various regulations. Which of the following applies to variable contracts?

The 12% rule

Gerald wants a life insurance policy in which he can choose the investment vehicle. Which policy would you recommend to him?

Variable life

Insurance agent Sam would need a securities license to sell this policy:

Variable life

Which of the following policies allows the policyowner to buy term and direct the investments made in the cash value account?

Variable universal life

Which policy has fixed premiums, a guaranteed minimum death benefit and nonguaranteed cash values?

Variable whole life

All of the following policy elements are not guaranteed in a variable whole life policy, EXCEPT: a. Value in separate account b. Accumulation units d. Cash value

c. Death benefit

In which fund are premiums for a variable whole life insurance policy invested?

The insurer's separate account

Which life insurance policy allows the policyowner to choose where they want their funds invested?

Variable life

Which of the following laws defined a security product?

Securities Act of 1933

Which of the following laws requires sales representatives selling variable products to have a Series 6 license?

Securities Act of 1934

Donna is getting ready to look at variable life insurance as an option for her insurance. Which of the following statements is TRUE about variable life insurance?

To sell a variable life insurance policy, the proposal must be accompanied by a prospectus

What is the primary purpose of the Securities Act of 1933?

Defines a securities product

Of the following policies, which has a guaranteed minimum death benefit, fixed premiums and nonguaranteed cash values?

Variable life