#1
Which regulatory body oversees variable life insurance products in the United States?
SEC (Securities and Exchange Commission)
FDA (Food and Drug Administration)
FCC (Federal Communications Commission)
IRS (Internal Revenue Service)
#2
What is the surrender period in variable life insurance policies?
The period during which the policyholder can surrender the policy for its cash value without penalty
The period during which the policyholder cannot access the cash value of the policy
The period during which the policyholder can change beneficiaries
The period during which premium payments are required
#3
Which of the following is NOT a common investment option in variable life insurance policies?
Stocks
Bonds
Real Estate
Fixed Interest Account
#4
Which of the following statements about variable life insurance loans is true?
Loans are not allowed on variable life insurance policies.
Loans are allowed but can only be used for medical expenses.
Loans are allowed but may reduce the policy's death benefit if not repaid.
Loans are allowed but do not affect the policy's cash value.
#5
What does the 'variable' component in variable life insurance refer to?
The variability of the premiums
The variability of the policy's face value
The variability of the investment options
The variability of the policyholder's age
#6
What is the purpose of the death benefit in variable life insurance policies?
To provide income during retirement
To cover the policyholder's medical expenses
To provide financial protection for the policyholder's beneficiaries
To fund the policyholder's investments
#7
What distinguishes variable life insurance from traditional whole life insurance?
The premium payments are fixed.
The policyholder can choose how the cash value is invested.
It does not have a death benefit.
It cannot be surrendered for cash.
#8
In variable life insurance, the cash value of the policy fluctuates based on the performance of:
The policyholder's age
The insurance company's profits
The stock market investments chosen by the policyholder
The policy's face value
#9
What is the primary tax advantage of variable life insurance policies?
Tax-deductible premiums
Tax-free death benefit for beneficiaries
Tax-deferred growth of cash value
Tax-free withdrawals of cash value
#10
Who typically benefits the most from variable life insurance policies?
Policyholders seeking guaranteed returns
Policyholders with a high tolerance for investment risk
Policyholders with short-term financial goals
Policyholders who do not require a death benefit
#11
Which of the following is a potential disadvantage of variable life insurance?
High liquidity
Potential for loss of principal
Low growth potential
Fixed premiums
#12
What is the primary source of the cash value in a variable life insurance policy?
Premium payments
Investment returns
Policy loans
Dividends
#13
What is the primary purpose of securities regulations regarding variable life insurance?
To ensure that the policies provide a guaranteed return
To protect consumers from investment risks associated with the policies
To limit the number of variable life insurance policies sold
To promote the sale of variable life insurance policies
#14
Which of the following is a characteristic of variable life insurance policies?
The policyholder has no control over investment choices.
The policyholder bears no investment risk.
The policyholder can access the cash value at any time without penalty.
The death benefit may fluctuate based on investment performance.
#15
What happens if the investments within a variable life insurance policy perform poorly?
The policyholder's premiums decrease
The policy's death benefit increases
The policyholder may need to increase premiums to maintain coverage
The policyholder is not affected financially
#16
Which of the following is typically NOT covered by variable life insurance policies?
Death benefit
Cash value
Surrender value
Premiums
#17
In variable life insurance, who assumes the investment risk?
The policyholder
The insurance company
The government
The beneficiaries
#18
What happens to the cash value of a variable life insurance policy upon the death of the policyholder?
It is transferred to the beneficiary tax-free.
It is forfeited to the insurance company.
It is subject to income tax.
It is used to pay off the policy's outstanding loans.