Insurance - Study Mode

[#621] In Unit Linked policies, the benefits are determined by the _________ of units credited to the policyholder’s account on the date on which payment is due.
Correct Answer

(B) Value

Explanation

Solution: In Unit Linked policies, the benefits are determined by the Value of units credited to the policyholder’s account on the date on which payment is due.

[#622] Units in a Unit Linked policy are purchased through payment of a
Correct Answer

(C) Either A or B

Explanation

Solution: Units in a Unit Linked policy are purchased through payment of a Single premium or Regular premium.

[#623] Name the deductions made from policyholder of a Unit Linked policy.
Correct Answer

(D) Charges

Explanation

Solution: In a Unit Linked Plan (ULIP), the premiums you pay are invested in the funds chosen by you after deducting allocation charges and charges including those for managing funds, policy administration and for providing insurance cover are deducted from the funds by cancelling certain units. Charges are deducted.

[#624] The value of the units of a Unit Linked policy is termed as :
Correct Answer

(B) Net Asset Value

Explanation

Solution: The value of the units of a Unit Linked policy is termed as Net Asset Value. Net asset value (NAV) is the value of an entity's assets minus the value of its liabilities, often in relation to open-end or mutual funds, since shares of such funds registered with the U.S. Securities and Exchange Commission are redeemed at their net asset value.

[#625] What could be the basis for choice of fund in a Unit Linked policy?
Correct Answer

(C) Both A & B

Explanation

Solution: Investment need and Risk profile could be the basis for choice of fund in a Unit Linked policy. Unit linked insurance plans allow policy takers to closely monitor their portfolios. They also offer the flexibility to switch your capital between funds with varying risk-return profiles.