Variable Universal Life/Universal Life Plan (VUL/ULP) Practice Exam

The answer provided highlights statement II regarding the costs of protection in Variable Life policies. This statement is accurate because Variable Life policies often use implicit charges that can vary based on the policyholder's age and the amount of coverage selected. The cost of insurance within these policies is not a fixed premium but rather adjusted according to the factors mentioned. This variability allows for more flexible funding in line with the policyholder's situation throughout the life of the policy.

In the context of the other statements, it is helpful to note that the first statement concerning the exposure to equity investments is also true—Variable Life policies typically allow for greater investment in equities compared to traditional policies since they are designed to provide policyholders with a variety of investment options. However, the answer provided identifies only one statement as true, which means it overlooks this crucial aspect of Variable Life policies.

Statement III discusses the funding of commissions and company expenses through explicit charges that can vary, which is indeed a characteristic of these policies. This means that both statements I and III provide valuable insights into the nature of Variable Life policies and could be considered true. Thus, a more comprehensive understanding of the correct answer would include the fact that statements I and II are true, thereby reinforcing the principles underpinning Variable Life insurance