IIQE Paper 5 Investment-linked Long Term Insurance Policies question: premium structures of investment-linked policies

Answer: C. (ii) and (iv)

Answer: (ii) and (iv). Statements (ii) and (iv) are true; (i) and (iii) are not.(i) False. A lump sum points to a single premium plan; regular premium plans build savings over time.(ii) True. Single premium plans are for individuals with a large capital sum at their disposal.(iii) False. Single premium buyers are looking for freedom to implement their own investment strategy.(iv) True. Regular premiums allow risk to be spread with small amounts through units in various funds.Why not the others:• (i) and (ii): includes (i), which is false, and leaves out (iv), which is true.• (i) and (iii): includes (i) and (iii), which are false, and leaves out (ii) and (iv), which are true.• (iii) and (iv): includes (iii), which is false, and leaves out (ii), which is true.Watch out: Reversing the two structures: a lump sum suits a single premium plan, regular saving suits a regular premium plan.Rule: Single premium plan: large capital sum, own investment strategy. Regular premium plan: regular savings, flexible strategy, risk spread with small amounts.Source: IA Investment-linked Long Term Insurance Examination Study Notes, 2024 Edition (7th ed., Nov 2024; for exams from 17 Feb 2025), 4.5, p. 4/8