Practice Quiz

FINRA Series 6

Category - Series 6

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Which of the following statements made by a registered representative selling a variable life insurance policy would be likely to result in disciplinary action?
  1. “If you use the cash value of your existing life insurance policy, Ms. Client, you will be able to purchase this new policy for little or no additional cash.”
  2. “Ms. Client, you should consider this as more of an investment than an insurance policy.”
  3. “This variable life insurance policy offers a death benefit just like your traditional life insurance policy, Ms. Client.”
  4. Both Statements A and B are likely to result in disciplinary action.
Explanation
Answer: D - Both Statements A and B are likely to result in disciplinary action. Members are advised not to recommend that a client finance a variable life policy using the cash value of an existing policy unless that transaction is otherwise suitable for that particular client, and
members are warned that proving such a transaction was in the customer’s best interest is probably going to be more difficult than an outright sale of the variable life policy would have been. Members are also instructed that in no way should a variable life insurance policy be promoted as an investment, a retirement plan, or a savings account. Members are required to market it as what it is-life insurance.
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