Practice Quiz

FINRA Series 6

Category - Series 6

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When a client purchases a variable contract through you, he should be informed that his money will be invested:
  1. at the most recent price for which the contract sold.
  2. at the next price that is computed after the contract application is accepted by the insurance company.
  3. at the previous day’s close price for the contract.
  4. in a product with a guaranteed cash value.
Explanation
Answer: B - When a client purchases a variable contract, he should be informed that his money will be invested at the next price that is computed after the contract application is accepted by the insurance company. It is the responsibility of the member firm to transmit both the contract application and the payment to the insurance company promptly. Variable life insurance policies do not have guaranteed cash values. The cash value fluctuates with the performance of the underlying portfolio in which the insurance company invests the money.
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