Variable Universal Life Insurance Policies

question 9

Multiple Choice

Variable universal life insurance policies

• A)have fixed premiums and a fixed benefit payout.
• B)have fixed premiums,but allow the benefit payout to vary with investment returns.
• C)have a fixed benefit payout,but allow the premium to vary with investment returns.
• D)allow both the premium and benefit payout to vary with investment returns.

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Definitions:

Current Cost

Current Cost is the cost that would be incurred to replace an asset or resource at its present value, reflecting its current market price rather than its historical cost.

Target Costing

A pricing strategy where a product’s selling price is determined first based on market conditions, and then the manufacturing cost is managed to ensure profitability.

Life Cycle Cost

Encompasses all costs associated with a product or asset over its entire life, from acquisition through disposal.

Cost-plus Price

An approach where the selling price of a product is fixed by appending a set markup to the product’s per-unit cost.