CM LIC – (M8 + M8A + M9 + M9A) – Life Insurance, Investment-Linked Policies And Collective Investment Schemes

Explanation: The Policy Document plays a crucial role in managing policyholder expectations by defining realistic expectations. It provides clear and transparent information about the features, benefits, and risks of the Structured ILP, ensuring that policyholders have a comprehensive understanding and realistic expectations regarding their investments.

Explanation: The section in a Policy Document that outlines surrender charges and penalties for early termination is significant for describing legal terms and conditions. It specifies the consequences and charges associated with terminating the policy prematurely, providing policyholders with a clear understanding of the implications.

Explanation: To understand the charges and penalties associated with surrendering his Structured ILP policy, Mr. Tan should refer to the Legal Terms and Conditions section of the Policy Document. This section provides details about the consequences of early termination, helping Mr. Tan make an informed decision.

Explanation: The Policy Document often includes historical performance data to assist policyholders in assessing the performance of the investment component in Structured ILPs. This data provides insights into how the investment strategy has performed in the past, allowing policyholders to make informed decisions based on historical results.

Explanation: It is crucial for policyholders to refer to the Policy Document throughout the policy duration. Understanding the terms and conditions is not limited to specific events but is an ongoing process. Regular reference ensures that policyholders stay informed about the contractual details, features, benefits, and risks associated with their Structured ILP.

Explanation: The primary purpose of disclosing charges and fees in the Policy Document at policy inception is to describe legal terms and conditions. This section outlines the charges associated with the policy, ensuring transparency and providing policyholders with a clear understanding of the financial implications related to their Structured ILP.

Explanation: Details about the structure of a Structured ILP are likely to be found in the section of the Policy Document that describes legal terms and conditions. This includes information about how the policy is structured, the components of the policy, and the contractual arrangements between the policyholder and the insurance company.

Explanation: Being aware of any limitations or exclusions in the Policy Document is essential for policyholders to manage realistic expectations. This section outlines circumstances or events that may affect the coverage or benefits, helping policyholders understand the scope and limitations of their Structured ILP.

Explanation: The Policy Document typically provides detailed withdrawal procedures to assist policyholders in understanding the process of making partial withdrawals from their Structured ILP. This information outlines the steps, conditions, and any associated charges or penalties related to partial withdrawals.

Explanation: To understand the charges associated with partial withdrawals, Ms. Wong should refer to the Legal Terms and Conditions section of the Policy Document. This section provides clear information about any charges or fees applicable to various policy transactions, including partial withdrawals.

Explanation: After Sales Disclosure, specifically through Policy Statements and Fund Reports, serves the primary purpose of providing ongoing information to policyholders. It includes details about the performance of the policy and the underlying funds, ensuring transparency and keeping policyholders informed about the status and progress of their investment.

Explanation: To review the recent performance of the underlying funds in a Structured ILP, Mr. Lim should refer to Policy Statements and Fund Reports. These documents provide detailed information about the performance, allocation, and other relevant data of the funds within the policy.

Explanation: Policy Statements for Structured ILPs typically include information about the status and value of the policy. This includes details about the current value of the policy, any changes in the investment component, and other relevant information to keep policyholders informed about the performance of their investment.

Explanation: The term “fund performance” in Fund Reports for Structured ILPs refers to the historical performance data of the underlying funds. It provides policyholders with insights into how the funds have performed over a specific period, aiding in their understanding of the fund’s track record.

Explanation: After Sales Disclosure, through Policy Statements and Fund Reports, plays a crucial role in addressing the need for transparency in Structured ILPs. It ensures that policyholders receive ongoing information about the status, value, and performance of their policy, promoting transparency and informed decision-making.

Explanation: In Fund Reports, policyholders typically find information about the allocation and composition of funds within their Structured ILP. This includes details about how their premiums are distributed among different investment assets, providing transparency and insights into the diversification of the investment.

Explanation: Regularly reviewing Policy Statements and Fund Reports is essential for policyholders to stay informed about the performance of their policy. It allows them to track the status, value, and investment performance, enabling informed decision-making and adjustments to their financial strategy if needed.

Explanation: Fund Reports typically include historical performance data to assist policyholders in understanding the risks associated with the underlying funds. By providing insights into how the funds have performed over time, policyholders can assess the historical volatility and make informed decisions about their investment.

Explanation: If a policyholder observes a decline in the value of their policy in a Policy Statement, they should look for additional information about changes in fund performance. This section provides insights into the factors influencing the policy’s value, helping policyholders understand the reasons behind the decline.

Explanation: Including historical performance data in Fund Reports is significant as it assists policyholders in understanding the risks associated with the underlying funds. By examining how the funds have performed in the past, policyholders can gauge the level of risk and make informed decisions about their investment strategy.

Explanation: Policy Statements typically include information about any changes in policy coverage. This is important for policyholders to be aware of alterations to the coverage or benefits of their Structured ILP, allowing them to assess the impact on their overall financial strategy.

Explanation: In Fund Reports, the term “net asset value (NAV)” represents the value of the fund’s assets minus its liabilities. It is a key indicator of the fund’s financial health and provides policyholders with insights into the overall value of the underlying fund in their Structured ILP.

Explanation: A key risk consideration associated with market-linked investments in Structured ILPs is the potential for market volatility. Market conditions can fluctuate, impacting the performance of underlying investments. Policyholders should be aware that their returns may be influenced by market movements, and this risk is crucial in assessing the overall risk profile of the investment.

Explanation: If Mr. Tan prefers stable and predictable returns, he should be mindful of the risk of potential market volatility. While some investment options may offer guarantees of future returns, market-linked components of Structured ILPs can be subject to fluctuations, introducing an element of risk that may impact the stability of returns.

Explanation: “Counterparty risk” in Structured ILPs refers to the risk of default by other parties involved, such as financial institutions. It is essential for policyholders to consider the financial stability of these counterparties as any default could impact the performance of the investment.

Explanation: An essential consideration for policyholders in Structured ILPs is understanding their risk tolerance, especially in relation to potential market volatility. Policyholders should assess their comfort level with market fluctuations and choose investment options that align with their risk tolerance to make informed decisions.

Explanation: Ms. Lee’s concern about the impact of interest rate changes on her Structured ILP falls under the category of Interest Rate Risk. Changes in interest rates can affect the performance of certain investment components, and policyholders should be aware of this risk when making investment decisions.

Explanation: When evaluating the risk associated with economic conditions in Structured ILPs, policyholders should consider predictions on future economic trends. Economic factors can impact the performance of investments, and policyholders need to assess the reliability of economic predictions to make informed decisions.

Explanation: “Liquidity risk” in Structured ILPs refers to the risk of difficulty selling assets. Policyholders should be aware that certain investments may be less liquid, meaning they could face challenges in selling these assets quickly if needed. This risk is vital in assessing the ease of converting investments into cash.

Explanation: The purpose of conducting a thorough risk assessment in Structured ILPs is to provide policyholders with guarantees of future returns. By evaluating and understanding various risks, policyholders can make informed decisions, and certain investment options may offer guarantees to provide a level of certainty in returns.