ALU 101 ACTUAL FINAL QUESTIONS AND ANSWERS
SET A+
✔✔Which of the following statements regarding a driving under the influence (DUI)
offense are correct?
a) All offenders are equipped with an ignition interlock device.
b) A conviction can be removed following alcohol education classes.
c) Driving privileges are suspended when a driver refuses to take a chemical test.
1. A and B only are correct.
2. A and C only are correct.
3. B and C only are correct.
4. A, B, and C are correct. - ✔✔3: B and C only are correct - page 137.
✔✔Which of the following disorders can affect driving ability?
a) narcolepsy
b) sleep apnea
c) epilepsy
1. A only is correct.
2. C is correct.
3. A and B only are correct.
4. A, B, and C are correct. - ✔✔4: A, B, and C are correct - pages 141-142.
✔✔Describe the difference between aggressive driving and road rage. - ✔✔Refer to
page 139.
✔✔Explain why a permanent flat extra or table rating may be a more appropriate rating
strategy than a temporary flat extra for rating motor vehicle concerns. - ✔✔Refer to
page 144.
✔✔Describe the effect distracted driving can have on an insured's mortality. - ✔✔Refer
to page 139.
, ✔✔In Canada, life insurance can be purchased to offset which tax:
1. property
2. estate
3. capital gains
4. sales - ✔✔3: capital gains - page 158.
✔✔In the United States, life insurance is used in the estate planning process for all of
the following reasons EXCEPT to:
1. offset probate costs
2. provide cash for use by the estate
3. pay estate taxes
4. replace key person income - ✔✔4: replace key person income - page 158.
✔✔Which of the following statements regarding deferred compensation plans is/are
correct?
a) They are in addition to the basic benefits available to all employees.
b) They allow executives to accrue extra funds for retirement.
c) They are usually permanent insurance plans with large internal values.
1. A only is correct
2. B only is correct.
3. B and C only are correct.
4. A, B, and C are correct. - ✔✔4: A, B, and C are correct - page 166.
✔✔Explain three methods of calculating the amount of life insurance needed when
considering income replacement and explain the advantages and disadvantages of
each method. - ✔✔Refer to pages 153-156.
✔✔Describe sources of financial data an underwriter can request or receive to evaluate
the amount of insurance being purchased. - ✔✔Refer to pages 166-167.
✔✔The type of business insurance that indemnifies a company against the loss of an
employee whose skills are critical to the firm is:
1. creditor
2. cross-purchase
3. income replacement
4. key person - ✔✔4: key person - page 160.
✔✔Methods of calculating income replacement for personal life insurance include which
of the following?
a) multiple of salary
b) human life value
c) needs analysis
SET A+
✔✔Which of the following statements regarding a driving under the influence (DUI)
offense are correct?
a) All offenders are equipped with an ignition interlock device.
b) A conviction can be removed following alcohol education classes.
c) Driving privileges are suspended when a driver refuses to take a chemical test.
1. A and B only are correct.
2. A and C only are correct.
3. B and C only are correct.
4. A, B, and C are correct. - ✔✔3: B and C only are correct - page 137.
✔✔Which of the following disorders can affect driving ability?
a) narcolepsy
b) sleep apnea
c) epilepsy
1. A only is correct.
2. C is correct.
3. A and B only are correct.
4. A, B, and C are correct. - ✔✔4: A, B, and C are correct - pages 141-142.
✔✔Describe the difference between aggressive driving and road rage. - ✔✔Refer to
page 139.
✔✔Explain why a permanent flat extra or table rating may be a more appropriate rating
strategy than a temporary flat extra for rating motor vehicle concerns. - ✔✔Refer to
page 144.
✔✔Describe the effect distracted driving can have on an insured's mortality. - ✔✔Refer
to page 139.
, ✔✔In Canada, life insurance can be purchased to offset which tax:
1. property
2. estate
3. capital gains
4. sales - ✔✔3: capital gains - page 158.
✔✔In the United States, life insurance is used in the estate planning process for all of
the following reasons EXCEPT to:
1. offset probate costs
2. provide cash for use by the estate
3. pay estate taxes
4. replace key person income - ✔✔4: replace key person income - page 158.
✔✔Which of the following statements regarding deferred compensation plans is/are
correct?
a) They are in addition to the basic benefits available to all employees.
b) They allow executives to accrue extra funds for retirement.
c) They are usually permanent insurance plans with large internal values.
1. A only is correct
2. B only is correct.
3. B and C only are correct.
4. A, B, and C are correct. - ✔✔4: A, B, and C are correct - page 166.
✔✔Explain three methods of calculating the amount of life insurance needed when
considering income replacement and explain the advantages and disadvantages of
each method. - ✔✔Refer to pages 153-156.
✔✔Describe sources of financial data an underwriter can request or receive to evaluate
the amount of insurance being purchased. - ✔✔Refer to pages 166-167.
✔✔The type of business insurance that indemnifies a company against the loss of an
employee whose skills are critical to the firm is:
1. creditor
2. cross-purchase
3. income replacement
4. key person - ✔✔4: key person - page 160.
✔✔Methods of calculating income replacement for personal life insurance include which
of the following?
a) multiple of salary
b) human life value
c) needs analysis
