VUL Exam 2023 questions and answers with complete
solution
Which of the following statements describe the differences between variable universal
life insurance products and traditional participating products
I. Traditional participating life policies aim to produce steady return by smoothing out
market fluctuations, while Variable Universal Life insurance policies offer the potential
for higher returns but at the expense of market volatility and higher risk.
II. Variable Universal Life insurance products can take the form of Whole life or
endowment policies but traditional participating life policies do not
III. The investment element of Variable Universal Life insurance policies is made known
on the outset and is invested in a separately identifiable fund, which is made up of units
of investment.
A. I only
B. I & III only
C. II & III only
D. I, II, & III
B
which one of the following statements about diversification in portfolio management is
FALSE?
A. Diversification can completely eliminate the risk of investing in stock portfolio
B. Diversification helps to spread the portfolio risk by investing in the different categories
of investment in a portfolio
C. Diversification involves purchasing different types of stocks and investing in stocks of
different countries
D. A diversified portfolio provides greater security to an investor without having to
sacrifice the return for the portfolio
A
People generally invest their money to provide:
I. an improvement in their financial position
II. a less comfortable standard of living
III. income in retirement
IV. funds for paying necessary expenses and taxes when the person dies
A. I, II, & III
B. I, III, & IV
, C. I, II & IV
D. II, III, & IV
B
Which of the following statement is/ are FALSE?
I. Higher capital gain is normally associated with lower risk
II. One way to lower risks in investment is to diversify
III. One method of measuring risk is to determine the average return and its standard
deviation from future data.
IV. Diversification can be acheived by investing in different countries and/or types of
assets.
V. An investor can always choose an investment that is risk free
A. I, II & III
B. II, III & IV
C. I, III & V
D. All of the above
C
The risk profile of a person depends on
I. age
II. investment objectives
III. financial conditions
IV. personality
A. I & II only
B. II, III & IV
C. I, II, & III only
D. All of the above
D
Which of the following information must not be conveyed to client in sales of Variable
Universal Life insurance policies?
A. Guaranteed interest rate
B. Time horizon of the product
C. The risk involved
D. Benefits illustrations using 10% as the gross
E. Rate of return
A
Which of the following is NOT a characteristic of a variable Universal Life policy?
A. It is used solely for investment purposes
B. the commissions and office expenses are met by explicit charges
C. Its generally, though not necessarily, more exposure to equity investments.
D. its cash value is usually the value of units allocated to the policy calculated at the
prevailing bid price
solution
Which of the following statements describe the differences between variable universal
life insurance products and traditional participating products
I. Traditional participating life policies aim to produce steady return by smoothing out
market fluctuations, while Variable Universal Life insurance policies offer the potential
for higher returns but at the expense of market volatility and higher risk.
II. Variable Universal Life insurance products can take the form of Whole life or
endowment policies but traditional participating life policies do not
III. The investment element of Variable Universal Life insurance policies is made known
on the outset and is invested in a separately identifiable fund, which is made up of units
of investment.
A. I only
B. I & III only
C. II & III only
D. I, II, & III
B
which one of the following statements about diversification in portfolio management is
FALSE?
A. Diversification can completely eliminate the risk of investing in stock portfolio
B. Diversification helps to spread the portfolio risk by investing in the different categories
of investment in a portfolio
C. Diversification involves purchasing different types of stocks and investing in stocks of
different countries
D. A diversified portfolio provides greater security to an investor without having to
sacrifice the return for the portfolio
A
People generally invest their money to provide:
I. an improvement in their financial position
II. a less comfortable standard of living
III. income in retirement
IV. funds for paying necessary expenses and taxes when the person dies
A. I, II, & III
B. I, III, & IV
, C. I, II & IV
D. II, III, & IV
B
Which of the following statement is/ are FALSE?
I. Higher capital gain is normally associated with lower risk
II. One way to lower risks in investment is to diversify
III. One method of measuring risk is to determine the average return and its standard
deviation from future data.
IV. Diversification can be acheived by investing in different countries and/or types of
assets.
V. An investor can always choose an investment that is risk free
A. I, II & III
B. II, III & IV
C. I, III & V
D. All of the above
C
The risk profile of a person depends on
I. age
II. investment objectives
III. financial conditions
IV. personality
A. I & II only
B. II, III & IV
C. I, II, & III only
D. All of the above
D
Which of the following information must not be conveyed to client in sales of Variable
Universal Life insurance policies?
A. Guaranteed interest rate
B. Time horizon of the product
C. The risk involved
D. Benefits illustrations using 10% as the gross
E. Rate of return
A
Which of the following is NOT a characteristic of a variable Universal Life policy?
A. It is used solely for investment purposes
B. the commissions and office expenses are met by explicit charges
C. Its generally, though not necessarily, more exposure to equity investments.
D. its cash value is usually the value of units allocated to the policy calculated at the
prevailing bid price
