Insurance - Study Mode

[#196] Universal life insurance policy provides for partial withdrawals. This partial withdrawal was made from the policy’s _________
Correct Answer

(D) Cash value

Explanation

Solution: Universal life insurance policy provides for partial withdrawals. This partial withdrawal was made from the policy’s Cash value. Cash value may also be used to pay policy premiums. If there is sufficient cash value, a policyholder can stop paying premiums out-of-pocket and have the cash value account cover the payment.

[#197] In respect of Universal life insurance, which of the following statement is correct:-
Correct Answer

(C) Both A & B

Explanation

Solution: Both the statements are correct. The partial withdrawal once taken need not be repaid and Policy was kept in force even if premiums are not paid provided there were adequate investment returns.

[#198] As per IRDA, which of the following non-traditional products are permitted to be sold?
Correct Answer

(C) Both A & B

Explanation

Solution: As per IRDA, Variable insurance plans and Unit Linked insurance plans non-traditional products are permitted to be sold. Variable life insurance is a permanent life insurance policy with an investment component. The policy has a cash value account, which is invested in a number of sub-accounts available in the policy. Unit linked insurance plan(ULIP) is a market-linked product that aggregates the very best of investment and insurance. It is a plan which is linked to the capital market and offers flexibility to invest in equity or debt funds as per risk appetite.

[#199] Variable Life Insurance is a kind of _________ Insurance.
Correct Answer

(A) Whole life

Explanation

Solution: Variable Life Insurance is a kind of Whole life Insurance. Variable life insurance is a permanent life insurance policy with an investment component. The policy has a cash value account, which is invested in a number of sub-accounts available in the policy. A sub-account acts similar to a mutual fund, except it's only available within a variable life insurance policy.

[#200] In Variable life insurance, the death benefit and cash value of the policy _________ according to the investment performance of a special investment account into which premiums are credited.
Correct Answer

(D) Fluctuate

Explanation

Solution: In Variable life insurance, the death benefit and cash value of the policy fluctuate according to the investment performance of a special investment account into which premiums are credited.