THE CERTIFICATE EXAMINATI

INVESTMENT-LINKED
LIFE INSURANCE
The following chart is a consolidated figure on the percentage
(%) of multiple choice questions derived from respective
chapters :

exam topics
2
Chapter 1
INTRODUCTION TO
INVESTMENT-LINKED LIFE
INSURANCE
Loading…

3
Introduction

Value of policy Linked to Chosen Fund

Total Units
multiply Value
Unit Price fluctuates

Investment
Performance
Directly linked

4
Introduction
Premium

Insurance
Company

Internal Unitised Loading…

Investment
Investment-Linked External Unit Trust
Fund
Fund

Fund Invested
to Earn
Returns

5
Introduction

Malaysia/ Singapore UK
U.S.A.
/

Investment-Linked Unit-Linked Variable Life

Refers to the same thing

6
Sample Questions:
1. What is an "internal unitized investment-linked fund"?

A. Part of the external unitized investment-linked fund

B. Part of the stock market investment-linked fund
C. Part of the life insurance fund of a life insurance company
D. Part of the investment fund of a life insurance company

7
Sample Questions:
2. Investment-Linked Insurance policy is named as the following
around the world except

A. Mutual Fund-Linked Policy.

B. Unit-Linked Policy.
C. Variable Life Policy.
D. Takaful Investment-Linked life.

8
Chapter 2
KEY CONSIDERATIONS
IN INVESTMENT

9
 1. Availabilit 1. Risk Or
y Of Funds Security

1. Investme 1. Investment
nt KEY Horizon

Objectives CONSIDERATIONS
1. Diversificati 1. Accessibilit
on y Of Funds
1. Performance Of1. Taxation
The Investment Treatment
 Investment Objectives
o Safety
• Some instruments lend a relatively safe investment return.
• Client has to forego growth and income stream .
• Quite conservative, help to create hedge against inflation.

o Income Loading…
RIS
• Safest investment are K
also the ones that are
likely to have
RETURN
lowest rate of income. S
BONDS / EQUITY
• RISK–RETURN trade off. FD /SHARES

11
 Investment Objectives
o Growth
• Seeking capital gains.
• Invest in common stocks – ranks among the most
speculative of investments.

12
 Other Investment Objectives
Education &
up-bringing Improve financial
Funds for dependents position

Comfortable standard
Hedging inflation
of living

Pay expenses Liability

& taxes upon death cancellation

Beyond financial Retirement income

freedom Achieving financial
freedom
13
 Funds Available
o Personal Budget
Finding enough surplus fund.
Takes control of spending and save /
invest.
Cash Flow and Net Worth Analysis.
Able to assist the client to make sure
that they have enough money to put
aside for investment and be able

to follow through with the

investments financial obligation.

14
 Funds Available
o Simple Monthly Cash Flow Analysis
No Income (A) RM Expenditure RM
1 Salary 5,000 Rental/Housing Loan Payment 1,000
2 Rental 500 Groceries and Utilities 750
3 Commissions 1,000 Childcare/Parents Allowance 500
4 Others 1,000 Education Expenses 250
5 Loans (Car, Credit Cards, etc.) 2,000
6 Insurance Premiums 500
7 Savings 500
8 Misc. 1,000
TOTAL 7,500 6,500
The analysis shows: Has RM1,000 a month as surplus fund

15
 Funds Available
o Simple Net Worth Analysis
No Assets (Present Value) Amount Liabilities RM
1 House 220,000 Housing Loan Balance 200,000
2 Car 30,000 Car Loan Balance 35,000
3 EPF 20,000 Credit Card Balance 5,500
4 Saving Accounts 1,500 Personal Loan Balance 10,000
5 Ins. Cash Value 20,000 Others 15,000
TOTAL 291,500 265,500

• The analysis shows: Positive Net Worth Position = RM26,000

• Can offer a viable and simple plan that will meet client’s
investment objectives

16
 Risk OR Security
o What’s Your Investment Risk Profile?

• Definition of risk - Your returns are directly proportional

to the risk you take.
• Concept of risk – Volatility or how widely price of stock or
mutual fund fluctuates.
• ‘The wider the fluctuations, the higher the risk.’

17
 Investment Horizon
o The length of time a sum of money is expected to be
invested.

o Depends on:
i. When and how much
money will be needed
ii. Risk exposure desired

18
Accessibility Of Funds
o Accessibility of funds has 3 components:

1. Time frame when fund is needed.

2. Cost of realizing the investment (withdrawal).

3. Initial Cost of Investment.

19
Taxation Treatment

o Tax treatment on different type of investment must be

considered.

o Investment-Linked’s tax treatment is the same as the

traditional life insurance plan

20
Performance Of the Investment
Regional & Global economic factors
Competencies
& capabilities of
Country’s management
economic factors Team
Performance
depends on:
Life cycle
of investment
Invested company’s
level of costs

History of the invested Invested company’s

company past experience

21
Diversification
o Process of investing across different asset classes and
across different market segment

o Proven effective in reducing risk without sacrificing returns.

22
Sample Questions:
1. Which of the following are the considerations in investment?

I. Taxation Treatment
II. Performance of the investment
III. Diversification
IV. Accessibility of Fund

A. I , II , III
B. I , II , IV
C. II , III , IV
D. I , II , III , IV

23
Sample Questions:

2. Which of the following factor will affect the investment

decision?

A. The level or amount of task in hand

B. The level or amount of information available
C. The level or amount of funds available
D. The level or amount of debt in hand

24
Sample Questions:
3. Which of the following investment carries highest risk and
uncertainties?

A. Investment that offers the lowest opportunities for capital

growth
B. Investment that offers the lowest opportunities for income
growth
C. Investment that offers the greatest opportunities for capital
growth
D. Investment that offers the acceptable opportunities for
income growth

25
Sample Questions:
4. What is diversification?

A. The process of investing in the same asset classes and

across different market environments
B. The process of investing across different asset classes and
across different market environments
C. The process of investing in the same asset classes and
not across different market environments
D. The process of investing across different asset classes
and not across different market environments

26
Sample Questions:
5. What considerations must be taken before making an
investment decision?
i. Investment objectives, Availability of Funds, Diversification.
ii. Risk or Security, Promised Money, Tax issues.
iii. Investment Horizon, Performance of Investment,
Accessibility of Funds.
iv. Economic Reports, Insurance Companies Asset base,
Government Regulations.
A. i.iii only.
B. i,ii only.
C. i,iv only.
D. iii,iv only.

27
Sample Questions:
6. Clients want to invest;

i. to lead a comfortable lifestyle.

ii. to be comfortable during retirement.
iii. to amass great wealth.
iv. to provide adequate funding for their children’s needs.

A. i, iii, iv only.
B. i, ii, iii only.
C. i, ii, iv only.
D. ii, iii, iv only.

28
Chapter 3
TYPES OF
INVESTMENT ASSETS

Loading…

29
INVESTMENT CHOICES
• Cash and Deposits • Life Insurance
• Fixed Income Securities • Annuities
• Shares • Exchange Traded Funds
• Unit Trusts • Sukuk Bonds
• Investment Trusts • Real Estate Investment Trusts

• Properties • Capital Guaranteed Funds

• Derivatives
• Commodities

30
Cash & Deposits
o Liquid instruments that carry little or no risk.

o Cash cannot be considered as an investment, used as a

means only to finance investments.

o Includes: Short-term debt instruments, i.e.:

1. Treasury Bills
2. Bank Accounts

31
Cash & Deposits
o Treasury Bills
- Issued by Bank Negara to borrow money from the
public
- Short-term government funding vehicle issued on a
regular basis with repayment normally within a year.
- Safest type of investment, no risk, except if the
country is politically unstable.

32
 Cash & Deposits
o Bank Accounts
- Fixed deposits with fixed periods with fixed interest
rate
- Accounts available:
• Saving Accounts
• Current Accounts
• Fixed Deposits
• Investment Accounts

• Time Deposits
• Offshore Accounts
33
Cash & Deposits

Funds available

Duration of Choices of Emergency

the funds withdrawals
deposits
can be remained

Prevailing
market conditions

34
 Cash & Deposits
o Perbadanan Insurans Deposit Malaysia (PIDM)
Objective:
• Administer a deposit insurance system
• Provide insurance against the loss of part of all of
deposits of a financial institution
• Provide incentives for sound risk management in the
financial system
• Promote and contribute to the stability of the
Malaysian financial system

35
 Cash & Deposits

o Perbadanan Insurans Deposit Malaysia (PIDM)

Benefits to depositors:
• Protection is automatic
• Protects depositors holding deposits with banks

• No charge for deposit insurance protection

• Reimburse deposit to depositors if bank fail

36
Fixed Income Securities

Security Usually a company

or or government
certificate

Investors Issuer
Lend money

Offer a fixed periodic return with

repayment of principal at maturity

37
Fixed Income Securities

Government Corporate
Bonds Bonds

Types of Fixed
Income
Securities
Money
Preference
Market
Shares
Instruments

38
 Fixed Income Securities
o Government Bonds

• Types of government bonds according to maturity period

➢ Short term bonds – less than 5 years
➢ Medium term bonds – 5 to 10 years
➢ Long term bonds – more than 15 years

• Advantage – very safe, marketability and income for

future is guaranteed

• Disadvantage – in time of inflation, capital can be eroded

39
Fixed Income Securities
o Corporate Bonds

Bonds issued by companies:

a. Debenture stocks

b. Loan stocks

c. Convertible Stocks

40
 Fixed Income Securities
o Corporate Bonds

• Debenture stocks
➢ Secure loans to a company
➢ Pay fixed interest rate for a fixed
term at the end at which the
capital is repaid
➢ If company defaults on loan,
investor can take over the said
assets and sell to get their money
back

41
 Fixed Income Securities
o Corporate Bonds
• Loan stocks
➢ Unsecured loans to a company
➢ Interest rate and term are fixed
➢ If company defaults on loan,
investor may or may not get
back the capital depending on
the company’s performance
➢ Less secure but higher interest
rate
42
Fixed Income Securities

Risk-Return
Risk

Debenture Stocks
Loan Stocks

Government Bonds

Return

43
 Fixed Income Securities
o Corporate Bonds

• Convertible Stocks
➢ Can be converted to ordinary
shares of a company on a fixed
date
➢ Investor can then convert his
investment from a fixed interest
load to being a part owner and is
entitled to a share of its profits
though dividends declared

44
Fixed Income Securities
o Corporate Bonds

• Advantage – higher return than

government bond

• Disadvantage – more risky than

government bond

45
Shares

Company Private

• Not listed on the Stock Exchange

Public • Not available to ordinary investors

• Share can be quoted on the Stock Exchange
• Listed company share are thus easy to buy and sell through
stockbrokers
• The value of share fluctuates according to the market’s view
of the worth of the company

46
 Shares
o Ordinary Share
- Holder of ordinary share is a part owner of
the company and entitled to share in its
profits in the form of dividends
- Can realise investment by selling the

shares
- Profits made via capital gains are not liable
to tax

o Preference Share
- Holder enjoy a fixed dividend provided
enough profit has been made
47
Shares
o Advantage
- participate directly in the future of
the company.
- provide good dividends and capital
appreciation

- very liquid

o Disadvantage – very risky

48
Unit Trusts
o Generate income in the form
of dividends, interest and
capital gain
o Is a pool of funds contributed
by investors kept in trust by a
trustee & managed by fund

manager
o Investors buy units at offer
price and sell at bid price

49
 Unit Trusts
Trust Deed - Unit trust is established by trust deed
o Trust deed sets out
➢ Fund manager’s investment power
➢ Price structure
➢ Registration of unit-holders

➢ Remuneration of the fund managers

➢ Accounting and auditing rules

50
Unit Trusts

o Advantage – spread of investments open to unit-

holders and professional investment services are
provided by fund managers.

o Disadvantage - bewildering array of funds and

extra costs or charges must be paid when
purchasing the units.

51
Investment Trusts
o A company set up under the
Companies Act 1965
o Similar to unit trust, also pool
contributions from investors and
managed by specialist fund
manager
o Unit prices are recalculated and
quoted daily

o Higher risk / reward profile than

unit trusts.
52
 Properties
3 types of real estate investment:
1). Agricultural property. The price depends
on:
➢ Quality of the land
➢ Location of the land
➢ Value of the buildings on the land
2). Domestic property and 3). Commercial /
industrial properties. The price depends on:
➢ Location of the land
➢ Types of building on the land
53
 Properties
o Real Estate Investment Trust (REITs)

➢ Similar concept like unit trust

➢ Target long term investors with moderate risk, such as

insurance companies, pension funds, unit trust funds
and individual investors
o Advantage – provide good capital appreciation & steady
flow of income, low risk
o Disadvantage – property could be difficult to disposed off
during economic recession

54
Derivatives
o Values are linked to the price of underlying instruments
in the cash markets

o We will cover Options, Warrants and Futures

55
 Derivatives
Options – investor can buy a right, not an obligation, to
purchase or sell the security at a future date.

➢ Call option – gives holder the right to buy shares

(call away), hoping the share price will rise

➢ Put option – gives holder the right to sell shares

(put away), expect the share price to fall

➢ Advantage – potential to boost profits from

share price movement
➢ Disadvantage – very risky

56
 Derivatives
Warrants - also called Transferable Subscription Rights (TSR)

➢ is a corporate option to purchase the Company shares:

- At Pre-determined ratio (conversion ratio)
- At Pre-determined subscription price (exercise price)
- Within a specified time period.

➢ Advantage – investors can pay the exercise price at a

later date, gain capital by selling warrants

➢ Disadvantage – warrants lose their value completely if it is

not exercised on expiry, no chance for price recovery, no
voting privilege

57
 Derivatives
Futures – A contract between buyer & seller, set a price
today for an instrument that will be delivered on a specified
future date

➢ Two types of cash markets:

1. Spot markets – Current market price of an item
available for immediate delivery.
2. Forward markets – Agrees on the price today for
delivery in the future.

➢ A futures market is an organized and standardized

forward markets

58
 Exchange Traded
Exchange Traded Funds
Fund (ETF) – Also(ETF)
known as exchange-
traded product (ETP)
➢ Traded on stock exchanges, and is attractive because of
low cost, tax efficiency and stock-like features
➢ Types of ETFs
• Index ETFs
• Commodity ETFs or ETCs
• Bond ETFs
• Currency ETF or ETCs
• Actively managed ETFs
• Exchange-traded grantor trusts
• Leveraged ETF

59
 Sukuk Bonds
Sukuk Bonds – Arabic name for financial
certificates, they are Islamic
Bonds

➢ Comply with Islamic law and its

principle prohibits the charging
or paying interest

➢ Enjoy division of the assets in proportion to their

investment and bear the credit risk of the issuer

60
 Sukuk Bonds
Characteristic:

1. Issued by pooled funds (Mutual funds)

2. Based on hard assets that generate steady income and
expectations
3. May or may not guaranteed by their originators
4. Investor receive a fee equal to the income of the underlying
assets
5. Securities are issued SPVs
6. Issued in dollars
7. Based on tangible assets instead of debt
8. About 14 kinds of sukuk, but mostly used are Sukuk Al Ijara
and Sukuk Al Mucharaka

61
 Capital Guaranteed Fund

➢ Offered by certain institutions that guarantees the

investor’s initial capital investment from any losses,
provided that investors did not redeem their investments
before the maturity date

➢ Features:
● High asset allocation in guaranteed
investment instruments
● Slightly higher risk than FD
● Investment horizon for 3 – 5 years

62
 Capital Guaranteed Fund
Capital Guaranteed

➢ Features:
● Most CGF are offered during an offer period
● Higher initial investment compared to unit trust
● Not so high entry fee
● There is a redemption fee before maturity
● Capital preservation feature – guaranteed
● Need to wait for another series to be launched if the
previous offer period is missed

63
Sample Questions:
1. Fixed deposit is an example of which type of investment?

A. Investment that produces regular income flow and capital

gain
B. Investment that produces no regular income flow but
capital gain
C. Investment that produces no regular income flow and no
capital gain
D. Investment that produces regular income flow without
capital gain

64
Sample Questions:
2. Which of the following are examples of bank accounts?

I. Current Accounts
II. Savings accounts

III. Offshore Accounts

IV. Investment Accounts

A. I , II
B. I , II , III
C. II , III , IV
D. I , II , III , IV

65
Sample Questions:
3. What is fixed income securities?

A. All fixed investment vehicles

B. All fixed interest rate investment vehicles
C. A group of investment vehicles that offer a non-fixed
periodic return
D. A group of investment vehicles that offer a fixed periodic
return

66
Sample Questions:
4. Which of the following bond carries the lowest risk?

A. Loan stocks
B. Debenture stocks
C. Government bonds
D. Convertible stocks

67
Sample Questions:
5. What is the difference between shares from stocks?

A. A shareholder is a part owner of the company

B. A stockholder is a part owner of the company
C. Shareholders are liable for the debts of their company
D. Stockholders can vote at company meeting

68
Sample Questions:
6. Which of the following is the advantage of unit trusts?

I. Have lower risk compared to share

II. No extra cost or charges for switching from one fund to
another
III. Spread of investments opened to unit-holder
IV. Professional investment service is provided by the fund
managers

A. I , II , III only
B. I , III , IV only
C. II , III , IV only
D. I , II , III , IV

69
Sample Questions:
7. Which of the following regarding investment in property is
TRUE?

A. Can provide good capital appreciation and a steady

source of dividend
B. Can provide good source of dividend and a steady flow of
income
C. Can provide good capital appreciation and a steady flow
of income
D. Can provide good capital appreciation and a guaranteed
flow of income

70
Chapter 4
INVESTMENT-LINKED
LIFE INSURANCE PRODUCTS
– A WORLD SCENARIO

71
United Kingdom
o The first investment-linked insurance was an
individual retirement annuity for the self employed,
introduced by London & Manchester Assurance
Company Limited in 1957

o 1977 – The first of the new generation of investment-

link life insurance product was the Hambro Whole Life
Plan

o 1979 – Hambro Whole Life Plan was superseded by

Skandia Life UK

72
United States of America
o Offered to general public in 1976

o Marketing of Variable Life Insurance was pioneered by

the Equitable Life Assurance Society

o The securities laws that governing are the Investment

Company Act, 1940, the Securities Act, 1933 and
the Securities Exchange Act, 1934

o Securities Exchange Act, 1934 requires insurer to

register as a broker-dealer, agents to pass exam and
register with the National Association of Securities
Dealer (NASD)

73
Singapore

o 1973 – first single premium investment-linked policy

introduced by NTUC income
o Expansion of Investment-linked Life Insurance business
in Singapore was the introduction of the Enhanced
Investment Scheme (EIS) by the Central Provident
Fund (CPF) in 1993

74
Malaysia
o 1985 – A simplified form of investment-linked life
insurance product was introduced by Syarikat Takaful
Malaysia Sdn Bhd
o 1997 – Berjaya Prudential Assurance Bhd is the first
traditional insurance company to launch investment
link life insurance product

o Takaful investment-linked life insurance policies were

developed by Takaful companies
o Wider choice of both Takaful and conventional
investment-link life insurance policies

75
Sample Questions:
1. What type of insurance policy was the first investment-linked
insurance contract in the United Kingdom?

A. Group term insurance policy

B. Group retirement policy
C. Joint life annuity for the self-employed
D. Individual retirement annuity for the self-employed

76
Sample Questions:
2. The first traditional insurance company to launch the
investment-linked life insurance product was:

A. Malaysia Assurance Alliance

B. Berjaya Prudential Assurance Bhd
C. Mayban Life Assurance Bhd
D. Hong Leong Assurance

77
Chapter
TYPES OF
5
INVESTMENT-LINKED
LIFE INSURANCE PRODUCTS

78
 HOW DOES INVESTMENT-LINKED

o LIFE INSURANCE
Investment POLICIES
linked policies WORK?
work on a similar basis as
unit trust.
o The investment returns are not guaranteed.

Investment
Major portion used to purchase units Mortality
in fund managed by life office Protection
Smaller portion

PREMIUMS

79
HOW DOES INVESTMENT-LINKED
LIFE INSURANCE POLICIES WORK?
Definition
Policy Fee
• Same as for traditional life insurance
• It covers the administrative expenses setting up the policy

Annual Fund Management Fee

• Deduction of 0.5% to 2% of the fund each year as the investment
management charges

Offer Price
• Price at which units under an investment-linked life insurance policy are
offered for sale by the life office

80
HOW DOES INVESTMENT-LINKED
LIFE INSURANCE POLICIES WORK?
Definition
Bid Price
• Price at which units under an investment-linked life insurance policy
when the policy matures, or when the policy is surrendered, or at which
time units are cashed out
Bid-Offer Spread
• Difference between offer and bid price, with the offer price being higher
than the bid price, usually 5% - 6% of the offer price

Reduction in Allocation of Units-Premiums

• Not all the premiums allocate to buy investment units. The difference
representing marketing expenses & setting up expenses of the policy

81
HOW DOES INVESTMENT-LINKED
LIFE INSURANCE POLICIES WORK?
Definition
Initial Unit
• Life office may allocate all premium to units and known as initial units
• Higher annual management charges (6%), heavy is continuance
charge, cash value is much lower

Mortality Charges
• Cover the mortality costs & dependent on age

Surrender Charges

• A Charge deducted from the value of units at surrender

82
 Characteristics of Investment-Linked
Life Insurance Policies
o Can be used for investments, regular savings and
protections
o Have larger exposure to equity investments
Cash value & protection benefits are determined by the
o
Loading…
investment performance
o Protection cost are met by explicit charges
o Six months notice will be given prior to any change of
charges.
o Cash value is the value of units allocated to
policyowner

83
 Types of Investment-Linked
Life Insurance Policies
Single Premium Investment-Linked Whole Life Plan
o One-off premium contribution to purchase units
o Minimum premium – RM3000

o Amount of protection – 125% of premium paid,

minimum RM5000
o Long term savings and investment
o Top-ups / single premium injections are allowed
o Can surrender part / whole of the units

84
 Types of Investment-Linked
Life Insurance Policies
Regular Premium Investment-Linked Whole Life Plan
o Premium are paid at regular intervals (monthly,
quarterly, half yearly or annually)
o Serves as investment and life protection

o Premium holidays & top-ups are allowed

o Withdrawals & surrenders are allowed after a few
years’ premiums have been paid

85
 Types of Investment-Linked
Life Insurance Policies
Investment-Linked Education Plan
o Designed solely to satisfy the educational
needs of the policy owner's children

Investment-Linked Permanent Health Plan

o Offer coverage such as permanent health
and dread disease / living insurance plan
o It provides health coverage such as
disability income & contains cash value
unlike traditional health products that
doesn’t have cash value

86
 Types of Investment-Linked
Life Insurance Policies
Investment-Linked Individual
Pension Plan
o High allocation of premium
contributions to accumulate fund
to retirement
o Fund is then used to purchase
traditional annuity / investment-

linked annuity
o No life insurance cover other than
a return of investment funds on
death

87
 Types of Investment-Linked
Life Insurance Policies
Investment-Linked Takaful Policies
o Combines investment & takaful cover
o Parts of contribution used to provide cover (death &
disability) and parts will be invested in Shariah-
approved investment funds
o Unique Feature of Investment-Linked Takaful Policies
o Flexibility to choose own level of protection &
investment
o Vary the amount of contribution
o Switch current investment fund to another
o Redeem part of investment-linked units at any time
o Variety of investment funds
88
 Types of Investment-Linked
Life Insurance Policies
Investment-Linked Dread Disease
Plan
o Advances the whole face amount
in the event of diagnosis of heart
attack, stroke, coronary artery by-
pass, end stage renal failure or
total permanent disablement

89
Sample Questions:
1. Investment-linked life insurance policies operate on similar
principle as which of the following investment vehicle?

A. Shares
B. Options
C. Investment trusts
D. Unit-trust

90
Sample Questions:
2. The offer price under an investment-linked life insurance
policy is__________.

A. The price at which units under policy are offered for sale
by the life office.
B. The price at which units under policy are bought back by
the life office.
C. Also known as the bid price.
D. A fixed amount throughout the life of the policy.

91
Sample Questions:
3. Which of the following are the characteristics of investment-
linked life insurance policies?

I. The protection costs are generally met by explicit charges

II. Can be used for investments, regular savings and protection
III. Have a larger exposure to equity investments than traditional
with-profit life insurance policies
IV. The cash value and protection benefits are determined by the
investment performance of the underlying assets
A. I , II , III
B. I , II , IV
C. II , III , IV
D. I , II , III , IV

92
Sample Questions:
4. Which of the following are the basic types of investment-
linked insurance policies sold in Malaysia?

I. Regular premium life insurance plan

II. Single premium life insurance plan
III. Personal retirement life insurance plan

A. I , II
B. I , III
C. II , III
D. I , II , III

93
Sample Questions:
5. Chandran wants to have enough money to fund a traditional
annuity or investment-linked annuity before he retires. What
plan would you suggest to him?

A. Single Premium Investment-Linked Whole Life Plan.

B. Investment-Linked Individual Pension Plan.
C. Regular Premium Investment-Linked Whole Life Plan.
D. Investment-Linked Takaful Whole Life Plan.

94
Chapter 6
STRUCTURE OF
INVESTMENT-LINKED FUNDS

95
Structure Of Investment-linked Funds
Investment-linked funds can be structured in 2 ways:

1. Accumulation units – the investment income of

the fund is ploughed back into the fund and the unit
prices normally increase over a long period.

Unit Price Total Unit Unchanged

1. Distribution units – the investment income is used

to purchase additional units to be distributed to the
policy owners. The price of the units remains
unchanged but the policy owner gets more units.

Unit Price Unchanged Total Unit

96
The Investment Pattern
1. Cash Funds: funds are invested in low risk cash and
other forms of bank deposits.

2. Equity Funds: high risk investment in equities.

3. Bond Funds: ‘income’ or ‘fixed income’ funds where

investments are made in corporate and government
funds.

4. Property Funds: funds invest in properties and property

shares are reasonably safe.

97
 The Investment Pattern

1. Specialized Funds: restricted to investments in a

particular geographical region such as the Asean fund,
emerging market funds; or in specific industries such as
mining, plantation etc.

6. Managed Funds: invest in a wide variety of assets such

as equities, bonds, properties etc.

7. Balanced Funds: invest in fixed proportion of specified

assets. for example, 70% of the funds are in equities
and 30% in bonds.

98
The Investment Pattern
Risk
Equity
Fund
X
Balanced
X
Fund
X Managed
Cash Fund
Fund X
X Bond
Fund
Income / Return

99
 Switching
o Allow policy owner to switch part or all of his investment
from one fund to another fund

o Switching between funds may :

i. Be offered free of charge, or
ii. Offered free of charge for number of switches and
charges imposed for subsequent switches, or
iii. Incur a specific charge for each and every switch.

100
Sample Questions:
1. The investment income of these funds is ploughed back into
the fund. Therefore, the unit prices will increase over the long
term. This refers to which type of fund structure?

A. Distribution units
B. Accumulation units
C. Initial units
D. Separated units

101
Sample Questions:
2. Which of the following are the types of investment-linked
funds?

I. Speculated funds
II. Managed funds
III. Equity funds
IV. Specialised funds

A. I , II , III
B. I , II , IV
C. II , III , IV
D. I , II , III , IV

102
Sample Questions:
3. These funds are normally segmented based on geographical
regions or particular industries. These are:

A. Managed funds
B. Balanced funds
C. Specialised funds
D. Speculated funds

103
Sample Questions:
4. During a market crash, which fund suffers the biggest fall?

A. Funds that mainly invest in cash instruments like fixed

deposits, treasury bills, government bonds.
B. Funds that invest in overseas properties, REITs and
growth stocks.
C. Funds that invest in fixed income funds, balanced funds
and Sukuk Bonds.
D. Funds that invest in equities market both locally and
overseas.

104
Sample Questions:
5. Switching of funds happen in Unit trust and Investment-
Linked products. Switching is advantageous because;

A. It allows the smoothening process of uncertain market

conditions.
B. It allows the clients to make huge profits whence switches
are done.
C. It is a method to safeguard your principal invested.

D. It is good because the client does not incur any charges

related to constant switches.

105
Chapter 7
HOW INVESTMENT-LINKED
INSURANCE PRODUCTS WORK

106
 The Working of Investment-linked
Life Insurance
o Premium will be used to purchase units

o Value of policy depends on:

➢ Value of teach of the units
➢ Number of units the policy has accumulated

o Value of fund = total value of investment

o 2 types of payment

➢ Single premium plan (lump sum)

➢ Regular premium plans (regular payment)

107
The Working of Investment-linked
Life Insurance
Allocated Unallocated
premium Single premium/ top-up premium

Units which Cancel Units Life Office

belong to policy To pay mortality
owner charge & policy fee To meet
marketing and
set-up expenses
Surrender Claim (pay value of units)

Withdrawal (Pay value of units withdrawn)

Death Claim (Pay value of units and/or sum assured)

108
Method Of Calculating Benefits For
Single Premium Policies
Number of Units

Single Pricing Methods

• Premium paid deduct 5% balance will be divided by unit price

Dual Pricing Methods

• Premium paid divided by offer price
• Bid price = 95% of offer price
= offer price x 0.95

109
Number Of Units
Example: Single Pricing Method
* Companies will deduct a sum, usually 5%, as charges before
the premium is allocated to the purchase.

Assume that the price per unit is RM1.00. If a policy owner paid
RM4,000 premium and the company deducted 5% as a charge.
Total number of units would be: -

Charge 5% is deducted = RM4,000 x 5% = RM200.00

Balance Premium = RM4,000 – RM200 = RM3,800
Total Units = RM3,800 RM1.00 = 3,800 units

110
Number Of Units
Example: Dual Pricing Method

Assume that the offer price is RM1.00 and the bid offer spread is
5% and the amount of premium paid for buying the units is
RM4,000 What is the bid price and cash value?

Total Units = RM4,000 RM1.00 = 4,000 units

Bid Price = RM1.00 x (100% – 5%) = RM0.95
Cash Value = 4,000 units x RM0.95 = RM3,800

111
Method Of Calculating Benefits For
Single Premium Policies
Cash Value

Single Pricing Methods

• (Number of units x Unit price) – (Mortality charge + Policy fee)

Dual Pricing Methods

• (Number of units x Bid price) – (Mortality charge + Policy fee)

112
Cash Value
Example: Single Pricing Method
The cash value is
= (number of units x unit price) – (mortality charge + policy fee)

If the number of units is 3,800, the unit price is RM1.00, the

mortality charge is 1% and the policy fee is RM100.00, calculate
the cash value.

The mortality charge = 3,800 units x 1.00 x 1%

= RM38
The cash value = (3,800 units x RM1.00) – (RM38 + RM100)
= RM3,800 – RM138
= RM3,662

113
Cash Value
Example: Dual Pricing Method
The cash value is
= (number of units x bid price) – (mortality charge + policy fee)

If the number of units is 4,000, the unit price is RM1.00 and bid
price is RM0.95, the mortality charge is 1% and the policy fee is
RM100.00, calculate the cash value.

The mortality charge = 4,000 units x 0.95 x 1%

= RM38
The cash value = (4,000 units x RM0.95) – (RM38 + RM100)
= RM3,800 – RM138
= RM3,662

114
Method Of Calculating Benefits For
Single Premium Policies
Annual Yield on
Gross Premium

Formula for Return on Gross Premium (RGP):

Ending Value of Investment

Beginning Value of Investment

Formula for Annual Yield: (RGP) 1/n – 1

115
Annual Yield On Gross Premium
Example: Single Pricing Method
o Assuming beginning value of the investment is RM 4,000, suppose the
unit price after 10 years is RM1.97
o Ending Value of Investment
= (number of units x unit price) – (mortality charge + policy fee)
= (3,800 units x RM1.97) – [(3,800 units x RM1.97 x 1%) + RM100]
= RM7,486 – RM174.86
=RM7,311.14
o Therefore, the RPG = Ending value = RM7,311.14 =1.828 times
Beginning value RM4,000
o Annual Yield: (RGP) 1/n – 1 = (1.828) 1/10 – 1
=1.061 – 1
=0.062 or 6.2%

116
Annual Yield On Gross Premium
Example: Dual Pricing Method

o Assuming the offer price is RM1.97,

Bid Price: RM1.97 x 95% = RM1.87
Mortality Charge: (4,000 units x RM1.87 x 1%) = RM74.86
o Ending value of investment
= (number of units x bid price) – (mortality charge + policy fee)
= (4,000 units x RM1.87) – (RM74.86 x RM100)
=RM7,311.14
o Therefore, the RPG = Ending value = RM7,311.14 =1.828 times
Beginning value RM4,000
o Annual Yield: (RGP) 1/n – 1 = (1.828) 1/10 – 1
=1.061 – 1
=0.062 or 6.2%

117
Withdrawal
o The amount of money the policy owner will get from
withdrawal is as follows:

Amount Received
Number of units withdrawn x unit price or bid price
OR
Units Deducted
Amount withdrawn ÷ unit price or
bid price

118
Surrender
o Sell all the units in the policy.

o Calculation similar to calculation for withdrawal benefit.

119
Death Benefits
There are two types of death benefits:

Unit Value PLUS Sum Assured

a. For single pricing method,
death benefit = (no. of units x unit price) + sum assured
b. For dual pricing method,
death benefit = (no. of units x bid price) + sum assured

Unit Value OR Death Cover

Either the value of the units or the death cover, whichever is
higher.

120
Regular Premium Policies
o Operate under similar principle as single premium policies,
with the following differences:
Flexibility to vary
payment,
Can vary sum assured top-ups &
without premium
premium holiday
Differences between
regular premium & single
premium policies

May increase or reduce Can surrender

the level of premium all or partial units
(withdrawal)

121
Sample Questions:
1. The policy owner may sell all of his units at any time and this
is referred to as:

A. Surrender
B. Top-ups
C. Withdrawal
D. Lapse

122
Sample Questions:
2. Supposing a policy owner pays a premium of RM 5000
and the price per unit of investment at the time of purchase
is RM 1 and the bid offer spread is 5%, under the dual
pricing method, how many units can the policy owner buy?

A. 5500 units
B. 5000 units
C. 4750 units
D. 4500 units

123
Sample Questions:
3. Under an investment-linked life insurance policy,
policyowners may make withdrawals through which of the
following method?

A. Cancellation of units
B. Cancellation of policy
C. Policy loan
D. Policy premium loan

124
Sample Questions:
4. Use dual pricing method to calculate the death benefit of
the following investment-linked life insurance policy.

Sum assured ҖRM 6,000Ҕoffer priceҖRM 1.22 ;

bid priceҖRM1.159Ҕnumber of units Җ 4000

A. RM 10,880
B. RM 10,636
C. RM 6,000
D. RM 4,363

125
 Sample Questions:
1. The formula for the circulation of Return on Gross
Premium (RGP) is:
A. Ending Value of Investment
Beginning Value of Investment
B. Beginning Value of Investment
Ending Value of Investment
C. Offer Price
Bid Price
D. Dual Price
Single Price

126
Chapter 8
BENEFITS AND RISKS OF INVESTING
INVESTMENT-LINKED FUNDS

127
 Benefits
Pooling or Diversification Flexibility
• Wide range of equity stocks and • Change premium payment,
better risk characteristic take premium holiday,
add single premium top-up,
Expertise
make withdrawal,
• Managed by professional fund change level of sum assured,
manager switch between investment funds
Administration
Access
• Keep track of investment through
unit statement and unit price • Access to well diversified
published in financial newspaper investment-linked funds

128
 Risks
Investment Risk Charges

• Administration fees, insurance

• Value of unit is not guaranteed charge, fund management fee are
• Fluctuation of stock market not guaranteed and subject to
regular review

129
Sample Questions:
1. Investment-linked funds offer the policyowner an access to
what kind of investment?

A. Diversified portfolio of speculation

B. Guaranteed return of investment
C. Diversified portfolio of investment
D. High return of investment

130
Sample Questions:
2. Which of the following are the risks of investing in
investment-linked funds?

I. Charges
II. Moral risk
III. Investment risk

A. I , II only
B. I , III only
C. II , III only
D. I , II , III

131
Sample Questions:
3. The benefits of an Investment-Linked policy are as follows
;

i. The ability of the company to pool and diversify.

ii. The flexibility it offers.
iii. The minimal charges levied on the policy.
iv. The insulation of market risks by the company for the
client.

A. i & ii only.
B. ii & iv only.
C. i & iii only.
D. iii & iv only.

132
Sample Questions:
4. The flexibility offered by the Investment-Linked policy includes the
following;
i. Policy owner can ascertain the level of premium that needs to
be paid.
ii. Policy owner can decide to add single or multiple top-ups.
iii. Policy owner is subjected to a definite amount of premium
payment that is non-negotiable.
iv. Company will not charge any fees for premium holidays taken.

A. i & iv only.
B. i & iii only.
C. i only.
D. i & ii only.

133
 Chapter 9
COMPARISON BETWEEN INVESTMENT-
LINKED AND TRADITIONAL WITH
PROFIT LIFE INSURANCE PRODUCTS

134
 Comparison
Criteria Investment Returns and Risk

Traditional Guaranteed Amount payable is fixed at the inception of the

Without-Profit Products policy. There are no investment risks.

Surplus will be distributed as bonuses (not

Traditional With-Profit guaranteed).
Products Bonuses are paid out as cash bonus, reversionary
bonus (simple or compound) and terminal bonus.

Policy values vary according to the underlying

Investment-Linked Life
values of the assets. Risk is associated with the
Insurance Products
volatility of the investments.

135
Comparison
Criteria Premium Computation

Traditional Guaranteed
Premium is fixed at inception.
Without-Profit Products

Traditional With-Profit
Premium is fixed at inception.
Products

Investment-Linked Life Premiums are flexible – e.g.. Can have single

Insurance Products premium top-ups.

136
 Comparison
Criteria Death Benefit
Traditional Guaranteed

Without-Profit Products Death benefit is fixed at inception.

Traditional With-Profit Death benefit is equal to the sum assured plus any
Product accruing bonuses.
Single premium
i. the minimum SA or value of the units
whichever is higher
Investment-Linked Life
ii. The minimum SA plus value of units.
Insurance Products Regular premium:
iii. The S.A. or value of the units whichever is
higher
iiii. The SA plus value of units
137
 Comparison
Criteria Surrender

Traditional Guaranteed
Cash Value completion of the 3rd year
Without-Profit Products

Traditional With-Profit
Cash Value completion of the 3rd year
Products

Single Pricing:
- Units x Price
Investment-Linked Life
Insurance Products
Dual Pricing:
- Units x Bid Price

138
Sample Questions:
1. Which of the following statements regarding premium
under a traditional without profit policy is TRUE?

A. The premium is determined and is stated in the policy

B. The premiums are account driven

C. The life company may alter the term and conditions
without the agreement of the policy owners
D. The policy owners can change their premium
payments, take premium holidays

139
Sample Questions:
2. In a traditional life insurance policy, the client enjoys the
following EXCEPT;
A. The client is assured of being shielded by the vagaries
of the stock market by the company’s smoothening
process.
B. The client can expect his returns on death or disability
to be the accumulation of basic sum assured and
addition of bonuses declared by the company.
C. The client can choose to determine the level of
protection needed and the amount of premium that he
needs to pay.
D. The client can pledge his policy as collateral in
protecting a housing loan obligation.

140
Sample Questions:
3. The cash surrender value of a with-profit policy varies with
what factor?

A. Occupation of the life assured

B. Age of the life assured
C. Business volume of the insurance company
D. Investment returns of the insurance company

141
Sample Questions:
4. Which of the following statements regarding the
investment returns and risks of a fund that invests solely in
equities is TRUE?

A. Smaller volatility but the potential return is high

B. Greater volatility but the potential return is high
C. Greater volatility but the potential return is low
D. Smaller volatility but the potential return is low

142
Chapter 10
TAXATION AND LAW COVERING
INVESTMENT-LINKED LIFE
INSURANCE PRODUCTS

143
Taxation And Law
o Taxation aspects are treated in the same manner as
other Insurance policies

Investment-linked business is governed by

Common Contract Insurance Companies

Law of agency Act 1950 Act 1996 Act 1965

144
 Taxation And Law
Income Tax Act, 1967
o The principal legal document regulating income tax in Malaysia

Premium Relief
o Tax relief Is allowed when the life insurance or
Insurance premium
deferred annuity is + EPF = RM6000
• on the individual’s life

• on the life of the spouse of the individual Education + medical

insurance =
• on the joint lives of the individual and his/ RM3000
her spouse

145
 Taxation And Law
o The main purposes of regulation include:

➢ The protection of public interest

➢ The promotion of fairness and equity
➢ The fostering of competence
➢ The playing a developmental role

146
BNM’S Guidelines
(1)(B)
states a licensed insurer can only carry out
investment-linked business with the written
approval of Bank Negara

Section 7 (2)(B)
defines ‘Investment Business’ as a contract
where the benefits are wholly or partly
determined by the value of, or income from,
property of any description or by reference to
an index of the value of the property

147
BNM’S Guidelines

Insurers are required to maintain separate funds in respect of

each investment-linked fund. Each fund must have sufficient
assets to meet it’s liabilities.

148
BNM’S Guidelines
Investment Limit

Investment in securities in any one

investee should not exceed

5% of the paid up
5% of the total value of OR
capital of the investee
the fund assets
Company

whichever is lower

149
BNM’S Guidelines
Investment Limit

Investment in loans or debentures to any

one borrower should not exceed

5% of the total value of the fund assets

150
 BNM’S Guidelines
Valuation of Assets
o Assets of an investment-linked fund
must be valued frequently to provide
more accurate unit prices & benefits

Valuation of Liabilities
o Annual actuarial valuation of certifying
the level of reserves for cash values,
death claims, administrative expenses and other
benefit payments of the investment-linked fund must be
done & submitted to BNM within 3 months of the end of
the financial year

151
 BNM’S Guidelines
Age Limit of Policyowners
o At least 18 years old

Free-Look Provision
o At least 15 days after delivery of the policy

Intermediation
o Basic qualification = CEILLI

152
 BNM’S Guidelines

Minimum Death Benefit

o Minimum of RM5,000 or 125% of the single
premium whichever is higher

Minimum Premium Payment

o Minimum premium for single
premium policy is RM3,000

153
BNM’S Guidelines

Disclosure of Information
A.Sales Materials / Illustration

B.Statement to policy owners

C.Fund performance report to

policy owners

154
Sample Questions:
1. The premium relief is allowable when the life insurance
deferred annuity is:

I. On the individual's life

II. On the life of the spouse of the individual
III. On the joint lives of the individual and his/her spouse

A. I , II only
B. I , III only
C. II , III only
D. I , II , III

155
Sample Questions:
2. In Malaysia, the main purposes of regulating the insurance
business include which of the following?

I. The protection of the interest of the insurer

II. The fostering of competence
III. The promotion of fairness and equity
IV. The playing of a developmental role

A. I, II, III only

B. I, III, IV only
C. II, III, IV only
D. I, II, III, IV

156
Sample Questions:
3. On investments in securities, the investment - linked funds are
subjected to which of the following general restrictions?

A. Should not exceed 10% of the paid up capital of the investee

company or not more than 5% of the total value of the assets
of the fund whichever is lower
B. Should not exceed 5% of the paid up capital of the investee
company or not more than 10% of the total value of the assets
of the fund whichever is lower
C. Should not exceed 5% of the paid up capital of the investee
company or not more than 5% of the total value of the assets
of the fund whichever is lower
D. Should not exceed 10% of the paid up capital of the investee
company or not more than 10% of the total value of the assets
of the fund whichever is lower

157
Sample Questions:
4. The policy owner of an investment-linked life insurance
policy must be at least:

A. 21 years old.
B. 18 years old.
C. 16 years old.
D. 10 years old

158
Chapter 11
IDENTIFYING AND ESTABLISHING
CUSTOMER NEEDS

159
 Identifying and Establishing Customer Needs
Effective advice is important when marketing investment-linked life
insurance product, the process of providing advice involves:

a) a)
Establishi Establishing
a) Discuss a) Monitoring
ng current possible the portfolio
relationship financial recommendations
with the position and

client goals
a) Gatheringa) Developinga) Implementation
all relevant plans and of the agreed
financial strategies to recommendations
data meet the
goals

160
Identifying and Establishing Customer Needs

a) Establishing Relationship with A Client

- Agent has to convince client that he is in a position to

assist client to fulfill his financial goals.

161
Identifying and Establishing Customer Needs

b) Gathering All Relevant Financial Data

o Agent to conduct thorough ‘fact-find’ exercise to obtain all
relevant data.

o CFF addresses the following areas:

- Customer’s personal and dependents details
- Life and financial priorities and goals
- Risk profile

- Net worth analysis

- Cash flow analysis
- Recommendations and record of advice

162
Identifying and Establishing Customer Needs

c) Establishing Current Financial Position & Goals

- Agent to analyze data to help establish client’s current

financial position and future goals.

163
Identifying and Establishing Customer Needs
d) Developing Plans & Strategies to Meet the Goals
o The analysis will give birth to recommendations that satisfy
client’s needs in areas like:

- Adequate insurance coverage for liability cancellation,

basic protection, medical cover, disability cover, dread
disease cover etc.
- Planning for children’s education
- Retirement Planning
- Asset Accumulation
- Estate Planning

164
Identifying and Establishing Customer Needs
e) Discuss Possible Recommendations
Every client’s plan is unique after
every detailed discussion with client.

f) Implementation of the Agreed

Recommendations
Agent to ensure implementation is
done as per discussion.

g) Monitoring the Portfolio

Policy to be reviewed regularly, half yearly and
yearly basis.

165
Sample Questions:
1. This stage of process allows the agent to build up a clear
understanding of the customer's circumstances. This step
is

A. Assessing and satisfying customer's needs

B. Making recommendations to the customer
C. After Sales Service
D. Conducting the fact-find

166
Sample Questions:
2. The making of recommendations to the customer includes
which of the following?

I. Explaining the recommendations

II. Providing customers with an awareness of all options
and alternatives open to them
III. Arranging for reviews at regular intervals

A. I , II only
B. I , III only
C. II , III only
D. I , II , III

167
Sample Questions:
3. Arrange the financial planning process in order;
i. Establishing relationship with the client.
ii. Discuss possible recommendations.
iii. Establishing current financial position and goals.
iv. Implementation of the agreed recommendations.
v. Monitoring the portfolio.
vi. Gathering all relevant financial data.
vii. Developing plans and strategies to meet the goals.
A. vi,i,ii,iii,iv,v,vii.
B. i,vi,iii,vii,ii,iv,v.
C. i,ii,iii,iv,v,vi,vii.
D. i,vi,iii,ii,vii,iv,v.

168
Chapter 12
MARKETING AND AFTER-SALES
SERVICES, ETHICS AND
CODE OF CONDUCT

169
Marketing
Marketing is defined by the Institute of Marketing as
“the management process responsible for identifying,
anticipating satisfying customers requirements profitably”

Insurance companies must be market oriented by:

o Planning & Control
o Market Identification
o Product Development
o Pricing
o Selection Of Distribution Channel
o Promotion

170
 A Market Oriented Agent
1. Satisfy customers needs

2. Develop a sales plan

3. Have knowledge and skills in personal selling

171
A Market Oriented Agent
A Sales Plan includes the following:

1. Sales Goals
2. Objectives – these can be in
terms of target market
3. Sales Strategy
4. Implementation and control

172
A Market Oriented Agent
An agent who engages in personal selling requires:

1. Product Knowledge
2. Market Knowledge
3. Selling Techniques
4. Knowledge of Buying Process
5. Knowledge of Selling Process

173
Consumer Buying Decision Process

1. Problem
Recognition

5. Post- purchase 2. Information

evaluation search

3. Evaluation of
4. Purchase alternative policy

174
The Selling Process

Locate the
prospect
customer

Close the Create a sales

sales presentation

Conduct the
Handle sales interview
objection

175
 After Sales Service
o Activities to be completed
between the time a policy is
sold and the time the policy is
issued:

➢ Making sure that the

application is complete
and that all the proposer’s
answer have been
recorded accurately clearly
➢ Providing timely response
to any applicant or
company questions or
requests 176
Ethics & Conduct

o Ethics includes:

Behaving in Integrity

Compliance to the Best Principles & Practice of

Financial Advice

Behaving in Professional & Honourable Manner

Observe & Apply The Codes of Good Practices

177
LIAM’s Guidelines On The Code Of Conduct

Part I – Guidelines on the Code of Conducts

Part II – Life Insurance Selling

Part III – Statement of Life Insurance Practice

178
 LIAM’s Guidelines On The Code Of Conduct
Part I- Guidelines on Part II - Life Insurance Part III - Statement of
the Code of Conduct Selling Life Insurance
Practice

• Statement of • Introduction • Introduction

philosophy • General sales • Claims
• Coverage principles • Proposal forms
• Monitoring devices • Explanation • Policies &

• 7 principles of the • Disclosure of accompanying

guidelines underwriting documents
• Code of conduct information • Sales materials/
• Accounts & financial advertisements
aspects

179
 Part I- Guidelines on the Code of Conduct
7 Principles of Guidelines

1. Avoid conflict of interest

2. Avoid misuse of position
3. Prevent misuse of information
4. Ensure completeness & accuracy of relevant records
5. Ensure confidentiality of communication & transactions
between the company & clients
6. Ensure fair & equitable treatment of all policy owners
7. Conduct business with utmost good faith & integrity

180
Sample Questions:
1. Which of the following is not the function of a market-
oriented insurance company?

A. Promotion
B. Pricing
C. Selling to the customer
D. Selection of distribution channel

181
Sample Questions:
2. What is the main objective of a market-oriented agent?

A. Satisfying customers' requirements and needs

B. Setting the sales goal
C. Delivering policies to customers
D. Achieving the company's goal

182
Sample Questions:
3. The consumer buying decision process includes which of
the following stages?

I. Sales interview
II. Information search
III. Post-purchase evaluation
IV. Problem recognition

A. I, II҅III only
B. I, II, IV only
C. II, III, IV only
D. I, II, III, IV

183
Sample Questions:
4. The LIAM's guidelines are provided under which of the
following headings?

I. Life Insurance Selling

II. Guidelines on the Code of Conduct
III. Statement of Life Insurance Practice
IV. Guidelines on the Commission

A. I, II҅III only
B. I, II, IV only
C. II, III, IV only
D. I, II, III, IV

184
Thank You
&
Good Luck

185