LOMA 281 EXAMS SET BUNDLED
QUESTIONS AND CORRECT ANSWERS
SUCCESS PACKAGE
●● Actuaries
Answer: An expert in financial risk management and the mathematics
and modeling of insurance, annuities, and financial instruments
●● Premium Rate
Answer: The amount an insurer charges per unit of insurance coverage.
1 Unit = $1000 of life insurance coverage
●● Premium Rates have to be
Answer: Adequate and Equitable
●● Adequate Premium Rate
Answer: The company will have enough money to pay policy benefits
●● Equitable Premium Rate
Answer: Each policyowner pays a premium that reflects the degree of
risk he presents to the insurer
, ●● Death Benefit
Answer: The insurance benefit paid when the insured person dies
●● Surrender Benefit
Answer: The amount of the cash value a policyowner is entitled to
receive upon surrender of the policy
●● Cost of benefits
Answer: The value of the benefits guaranteed by the insurer. For
purposes of pricing an insurance product, the cost of benefits equals all
of the insurers potential payments of benefits obligation to customers
multiplied by the expected probability that each benefit will be payable.
Cost of Benefits = (potential benefit #1 x probability of payment) +
(potential benefit #2 x probability of payment) + ...
●● To determine the cost of benefits for life insurance products,
actuaries must make statistical projections about (choose all that apply)
How many insured people will die each year
Exactly which insured people will die each year
How many policyowners will lapse or surrender their policies
QUESTIONS AND CORRECT ANSWERS
SUCCESS PACKAGE
●● Actuaries
Answer: An expert in financial risk management and the mathematics
and modeling of insurance, annuities, and financial instruments
●● Premium Rate
Answer: The amount an insurer charges per unit of insurance coverage.
1 Unit = $1000 of life insurance coverage
●● Premium Rates have to be
Answer: Adequate and Equitable
●● Adequate Premium Rate
Answer: The company will have enough money to pay policy benefits
●● Equitable Premium Rate
Answer: Each policyowner pays a premium that reflects the degree of
risk he presents to the insurer
, ●● Death Benefit
Answer: The insurance benefit paid when the insured person dies
●● Surrender Benefit
Answer: The amount of the cash value a policyowner is entitled to
receive upon surrender of the policy
●● Cost of benefits
Answer: The value of the benefits guaranteed by the insurer. For
purposes of pricing an insurance product, the cost of benefits equals all
of the insurers potential payments of benefits obligation to customers
multiplied by the expected probability that each benefit will be payable.
Cost of Benefits = (potential benefit #1 x probability of payment) +
(potential benefit #2 x probability of payment) + ...
●● To determine the cost of benefits for life insurance products,
actuaries must make statistical projections about (choose all that apply)
How many insured people will die each year
Exactly which insured people will die each year
How many policyowners will lapse or surrender their policies
