INSR 310 EXAM 2 QUESTIONS AND ANSWERS | INSR 310 EXAM 2
STUDY GUIDE & PRACTICE TEST 2026/2027
Economic in nature - ANS ✔✔Primary Perils
Dying BEFORE you complete your goals; mortality - ANS ✔✔Premature Death
Death is not a peril, it is an? - ANS ✔✔Uncertainty
Getting hurt, health gets affected, and no longer being able to work; morbidity - ANS ✔✔Premature
Health
A type of unemployment where for example, working on assembly line and everyone stops buying cars,
so therefore you have no job - ANS ✔✔Involuntary
A type of unemployment where you work hard and then decide to retire - ANS ✔✔Voluntary
An economic base on financial flexibility/supplement and future charitable Intent/bequests - ANS
✔✔Individual purposes
An economic base on earnings protection/replacements and asset prevention/transfer - ANS ✔✔Family
purposes
An economic base on business continuation needs and employee benefit plans - ANS ✔✔Business
purposes
Different rules of life - ANS ✔✔Rules of Thumb
Figuring out what people need - ANS ✔✔Needs Analysis
Medical expenses, funeral/burial costs, personal obligations/debts/unpaid pledges, estate administration
costs/fees (executor, appraisal, legal, court) and taxes (property, estate, inheritance, income) - ANS
✔✔Terminal Needs (Clean-up fund)
Capital budgeting that is applied to human life - ANS ✔✔"Capitalization of Income" Approach
A is in business to support spouse and loved ones as well as B and they are both 50/50 owners; if A dies,
B will have to find someone/something to replace A, but for meanwhile, cannot work - ANS ✔✔"Buy-
Sell" Agreements
Key employee, maker of donuts, dies; so therefore, you need to find a new key employee who can make
donuts - ANS ✔✔Business Continuation
Tracks age and the number of people alive at that age which then tells us the number of people alive,
dying, year-to-year p(death), p(Live) - ANS ✔✔Mortality Tables
, "Protection" vs. "Savings" (Cash Value) and temporary vs. permanent - ANS ✔✔Basic Needs of Life
Insurance
Life insurance is a way to create what? - ANS ✔✔Estates
Taxes paid on income to the government - ANS ✔✔Income Taxes
"Protection" of life "insurance" also given preferential treatment!! - ANS ✔✔Estate Taxes
Provides protection ONLY [Protection] - ANS ✔✔Term insurance
Pool of money, losses are the people that die, and there are mortality charges - ANS ✔✔Term Insurance
Provides protection AND savings [Protections + Savings] - ANS ✔✔Cash Value Insurance
Think of a glass that is $1,000, paying premiums, they are taking out the loading charges; however,
paying more premium than needed to, so that money is going back into your glass - ANS ✔✔Cash Value
Insurance
Cash Value insurance is also called what? - ANS ✔✔Endowment or Permanent Insurance
Oldest type and most common type of life insurance sold - ANS ✔✔Ordinary Life
Temporary coverage for a certain period of time (protection only) that is renewable with a conversion
option as well (retroactive to original issue date) - ANS ✔✔"Term" Ordinary Life
Ex: Buying insurance and dying within the period of time, so having coverage - ANS ✔✔"Term" Ordinary
Life
What happens to the face value throughout the period of time, most common type sold; ex: paying the
same $100 throughout the whole period of time - ANS ✔✔Level Term Insurance
Diminishes throughout the period of time; ex: buying a policy that pays off the loan of the mortgage of
your house as you live - ANS ✔✔Decreasing Term Insurance
More insurance the longer the policy is enforced, not necessarily the most popular product; ex: you are
more likely to die the older and older you get, so basically paying more every year for the risk of death -
ANS ✔✔Increasing Term Insurance
Insurance for your whole life - ANS ✔✔"Whole life" Ordinary Life
Gives you both protections and savings (Protection + Savings [CV]) - ANS ✔✔Whole Life
As long as you're ordinary and straight, you will pay for it continuously throughout your whole life while
its enforced - ANS ✔✔"Ordinary"/"Straight"/"Continuous Premium" Whole life
Paying off insurance while you are working, therefore, not having to pay it while you are retired - ANS
✔✔"Limited Pay" Whole life
STUDY GUIDE & PRACTICE TEST 2026/2027
Economic in nature - ANS ✔✔Primary Perils
Dying BEFORE you complete your goals; mortality - ANS ✔✔Premature Death
Death is not a peril, it is an? - ANS ✔✔Uncertainty
Getting hurt, health gets affected, and no longer being able to work; morbidity - ANS ✔✔Premature
Health
A type of unemployment where for example, working on assembly line and everyone stops buying cars,
so therefore you have no job - ANS ✔✔Involuntary
A type of unemployment where you work hard and then decide to retire - ANS ✔✔Voluntary
An economic base on financial flexibility/supplement and future charitable Intent/bequests - ANS
✔✔Individual purposes
An economic base on earnings protection/replacements and asset prevention/transfer - ANS ✔✔Family
purposes
An economic base on business continuation needs and employee benefit plans - ANS ✔✔Business
purposes
Different rules of life - ANS ✔✔Rules of Thumb
Figuring out what people need - ANS ✔✔Needs Analysis
Medical expenses, funeral/burial costs, personal obligations/debts/unpaid pledges, estate administration
costs/fees (executor, appraisal, legal, court) and taxes (property, estate, inheritance, income) - ANS
✔✔Terminal Needs (Clean-up fund)
Capital budgeting that is applied to human life - ANS ✔✔"Capitalization of Income" Approach
A is in business to support spouse and loved ones as well as B and they are both 50/50 owners; if A dies,
B will have to find someone/something to replace A, but for meanwhile, cannot work - ANS ✔✔"Buy-
Sell" Agreements
Key employee, maker of donuts, dies; so therefore, you need to find a new key employee who can make
donuts - ANS ✔✔Business Continuation
Tracks age and the number of people alive at that age which then tells us the number of people alive,
dying, year-to-year p(death), p(Live) - ANS ✔✔Mortality Tables
, "Protection" vs. "Savings" (Cash Value) and temporary vs. permanent - ANS ✔✔Basic Needs of Life
Insurance
Life insurance is a way to create what? - ANS ✔✔Estates
Taxes paid on income to the government - ANS ✔✔Income Taxes
"Protection" of life "insurance" also given preferential treatment!! - ANS ✔✔Estate Taxes
Provides protection ONLY [Protection] - ANS ✔✔Term insurance
Pool of money, losses are the people that die, and there are mortality charges - ANS ✔✔Term Insurance
Provides protection AND savings [Protections + Savings] - ANS ✔✔Cash Value Insurance
Think of a glass that is $1,000, paying premiums, they are taking out the loading charges; however,
paying more premium than needed to, so that money is going back into your glass - ANS ✔✔Cash Value
Insurance
Cash Value insurance is also called what? - ANS ✔✔Endowment or Permanent Insurance
Oldest type and most common type of life insurance sold - ANS ✔✔Ordinary Life
Temporary coverage for a certain period of time (protection only) that is renewable with a conversion
option as well (retroactive to original issue date) - ANS ✔✔"Term" Ordinary Life
Ex: Buying insurance and dying within the period of time, so having coverage - ANS ✔✔"Term" Ordinary
Life
What happens to the face value throughout the period of time, most common type sold; ex: paying the
same $100 throughout the whole period of time - ANS ✔✔Level Term Insurance
Diminishes throughout the period of time; ex: buying a policy that pays off the loan of the mortgage of
your house as you live - ANS ✔✔Decreasing Term Insurance
More insurance the longer the policy is enforced, not necessarily the most popular product; ex: you are
more likely to die the older and older you get, so basically paying more every year for the risk of death -
ANS ✔✔Increasing Term Insurance
Insurance for your whole life - ANS ✔✔"Whole life" Ordinary Life
Gives you both protections and savings (Protection + Savings [CV]) - ANS ✔✔Whole Life
As long as you're ordinary and straight, you will pay for it continuously throughout your whole life while
its enforced - ANS ✔✔"Ordinary"/"Straight"/"Continuous Premium" Whole life
Paying off insurance while you are working, therefore, not having to pay it while you are retired - ANS
✔✔"Limited Pay" Whole life
