Which of the Following Statements Is True of a Variable

question 36

Multiple Choice

Which of the following statements is true of a variable life insurance policy?

• A)The policy stays in force as long as the premiums are paid.
• B)It provides protection for a specific period.
• C)This "mutual fund" policy is intended to keep death benefits apace with inflation.
• D)It pays the face amount if policy is in force when death occurs.
• E)The interest rates of the policy are based on bonds only (not stocks) and can be higher than the minimum guaranteed.

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Definitions:

Noncumulative Preferred Shares

Type of preferred stock where dividends not paid in a particular year do not accumulate and must be forfeited.

Stock Split

A corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares.

Shareholders' Equity

Shareholders' equity represents the residual interest in the assets of a corporation after deducting its liabilities, indicating the ownership interest of the shareholders.

2-For-1 Stock Split

A corporate action where a company doubles its number of outstanding shares, halving the stock price, effectively giving shareholders two shares for every one they owned.