Endowments

Question 1

With Profits Endowments - guaranteed GSA on maturity? True / False

Answer 1

True. Guaranteed sum assured will be paid at maturity.
The guaranteed sum assured will be lower than the actual mortgage, and the shortfall relies on bonuses.
The policy is designed to repay the mortgage at the end of the term.

Question 2

With Profits Endowments - guaranteed GSA on death? True / False

Answer 2

True. Will be enough to pay off mortgage.

Question 3

With profits endowments - annual reversionary bonuses and terminal bonus not guaranteed on death or maturity. True / false?

Answer 3

True

Question 4

Low-cost with-profits endowment – potential bonuses could make up shortfall to pay mortgage? True / False?

Answer 4

True

Question 5

Full with profits endowments – not guaranteed to pay mortgage, True or false?

Answer 5

False. Reversionary and terminal bonuses may be added, but the plan doesn’t rely on them to repay the mortgage, so this means the final value may be far in excess of the amount needed to repay the mortgage.

Question 6

Unitised with profits endowments - Bonuses are added by crediting more units to the policy at the current price? True / False?

Answer 6

True

Question 7

Unitised with profits endowments – guaranteed sum assured high enough to pay off mortgage on maturity? True / False?

Answer 7

False. GSA lower than the mortgage, relies on bonuses which are not guaranteed to meet maturity target.

Question 8

Unit linked endowment – guaranteed sum high enough to pay off mortgage on maturity? True / False?

Answer 8

False. The maturity value is the bid value of the units, which may or may not be enough to repay the mortgage

Question 9

Unit linked endowment - the death benefit is not guaranteed? True / False?

Answer 9

False. The death benefit is guaranteed and comprises the plan’s value on death plus variable term assurance to plug the gap between the guaranteed death benefit and the unit value.

Question 10

Full with-profits endowments are rarely used for mortgages because they are expensive. True / False?

Answer 10

True

Question 11

Full with profits endowments – the guaranteed sum assured on maturity or death is equal to mortgage? True / false?

Answer 11

True

Question 12

Low-cost with-profits endowment – most common for mortgage related? True / False?

Answer 12

True

Question 13

Low-cost with-profits endowment – guaranteed sum will be an amount equal or more than to pay off mortgage? True / False?

Answer 13

False

Question 14

Low-cost with-profits endowment – add bonuses? True / False?

Answer 14

True

Question 15

Low-cost with-profits endowment – death benefit equal to mortgage? True / False?

Answer 15

True

Question 16

Full with profits - GSA is equal to mortgage amount? True/ false?

Answer 16

True. Any bonuses add a cash surplus.

Question 17

Low cost with profits - decreasing term assurance in place to Ensure mortgage payment on death? True / false?

Answer 17

True.

Question 18

Low cost low start, premiums start off lower then increase by what percentage in each of the first 5 years?
A) 20%
B) 25%
C) 30%

Answer 18

A) 20%

Question 19

Low cost with profits - GSA is typically how much of the mortgage amount?
40-50%
50-60%
60-70%

Answer 19

50-60%

Question 20

Unit linked endowment - if policyholder dies during term, the GSA is not guaranteed to pay off mortgage true / false?

Answer 20

False. GSA on death during term will be enough to pay mortgage as uses variable term assurance.

Question 21

Unit linked endowment /- do not offer bonuses true / false?

Answer 21

True