Insurance - Study Mode

[#531] Which of the below is correct with regards to universal life insurance? I: It allows policy owner to vary payments. II: Policy owner can earn market based rate of return on cash value
Correct Answer

(C) I and II are true

Explanation

Solution: Both are correct with regards to universal life insurance: It allows policy owner to vary payments and policy owner can earn market based rate of return on cash value.

[#532] All of the following is true regarding ULIP’s EXCEPT:
Correct Answer

(B) Life insurer provides guarantee for unit values

Explanation

Solution: All of the following is true regarding ULIP’s except life insurer provides guarantee for unit values.

[#533] What does unbundling of life insurance products refers to?
Correct Answer

(D) Separation of the protection and savings element

Explanation

Solution: Unbundling of life insurance products refers to separation of the protection and savings element. A unbundled life insurance policy contains a savings and investment component that the policyholder can use during his or her lifetime or pass on to beneficiaries.

[#534] Which of the below risk cannot be addressed through pensions?
Correct Answer

(D) Early death

Explanation

Solution: Early death cannot be addressed through pensions. A minimum qualifying service of 10 years is necessary for eligibility for Pension. The Government has reduced the qualifying service from 33 years to 30 years to become eligible for full Pension with effect from 1.4.2003.

[#535] What is the basic contingency associated with pensions?
Correct Answer

(C) Post-retirement income security

Explanation

Solution: Post-retirement income security is the basic contingency associated with pensions. A pension plan is a good way to secure your financial stability post-retirement. These pension plans which are maintained by the employers protect you from any uncertainty that may come unannounced post your retirement.