What is the current encashment value of a unit-linked whole of life policy with a life cover of €100,000 and 1,450 units valued at €1.44 each?

Prepare for the QFA Life Assurance Test. Study with flashcards and multiple-choice questions, each with hints and explanations. Get ready for your exam success!

To determine the encashment value of a unit-linked whole of life policy, it's essential to focus on the value of the units held, as this is what ultimately contributes to the policy's cash value. In this case, the policyholder has 1,450 units, and each unit is valued at €1.44.

To calculate the total value of the units, you multiply the number of units by the value of each unit:

1,450 units × €1.44 per unit = €2,088.

This figure represents the current encashment value of the policy, as it reflects the accumulation of investment within the unit-linked policy rather than just the life cover amount. The life cover of €100,000 is relevant for the death benefit but does not affect the encashment value in this context.

Thus, the calculation leads us directly to the conclusion that the encashment value is indeed €2,088, making this the correct answer.

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