IIQE Paper 5 Introduction to Investment-linked Long Term Insurance Policies question: investment-linked insurance policy

Answer: C. the policyholder directly owns the assets recorded in the fund accounts

Answer: the policyholder directly owns the assets recorded in the fund accounts. The policyholder bears the investment risk but does not directly own any of the underlying assets in the accounts, so this statement is not true.Why not the others:• the death benefit may vary with the fund's performance: True: the policy value, death benefit or annuity amounts vary with the fund accounts.• investment gains are passed through to the policyholder: True: gains pass through to the policyholder, as losses do.• the fund accounts are separate from the insurer's general account liabilities: True: the separate accounts are entirely apart from the insurer's general account liabilities.Watch out: Assuming that bearing the investment risk means owning the assets; it does not.Rule: The policyholder bears the investment risk of the separate accounts but owns none of the underlying assets directly.Source: IA Investment-linked Long Term Insurance Examination Study Notes, 2024 Edition (7th ed., Nov 2024; for exams from 17 Feb 2025), 1.2, p. 1/2