ALU 202 CHAPTERS 1-5 STUDY GUIDE>> 84
ACTUAL QUESTIONS AND ANSWERS|2025
UPDATE
1. Underwriting criteria generally used in the pricing of A, B, and C are correct
preferred policies include which of the following?
A. blood pressure
B. cholesterol/HDL ratios
C. family history
2. All of the following are life insurance pricing compo- asset risk
nents that are established by regulation EXCEPT:
1. reserve basis
2. tax law
3. non-forfeiture loss
4. asset risk
3. The relationship of mortality savings from a require- protective value
ment to the cost of administering the requirement is
.
4. All of the following statements regarding a protective It should measure the dif-
value study of underwriting requirements are correct ference between select
EXCEPT: and ultimate mortality.
1. It should evaluate which requirement identified the
underlying impairment.
2. It shoulder consider the proposed insured's behav-
ior in accepting or rejecting the offered policy.
3. It should measure the difference between select and
ultimate mortality.
4. It should ensure that the offered product is "at the
market."
,ALU 202 CHAPTERS 1-5 STUDY GUIDE>> 84
ACTUAL QUESTIONS AND ANSWERS|2025
UPDATE
5. A safety net that needs to be provided beyond the level risk-based capital
of reserves being held in case a company's mortality
, ALU 202 CHAPTERS 1-5 STUDY GUIDE>> 84
ACTUAL QUESTIONS AND ANSWERS|2025
UPDATE
experience turns out to be much worse than expected
is referred to as .
6. What is the single biggest cost in a life insurance prod- mortality
uct?
7. All of the following are pricing components EXCEPT: morbidity
1. mortality
2. lapse rates
3. expense levels
4. morbidity
5. interest rates
6. regulation components
8. The risk that the assets supporting the product line asset risk
lose some or all of their value.
9. The risk that the price for the insurance product is underwriting insurance
inadequate and/or underwriting standards were not risk
maintained.
10. What two things occur with more stringent underwrit- 1. expected mortality de-
ing? creases
2. fewer individuals qualify
11. This pricing component is the largest decrement af- lapse rates
fecting the number of policies ultimately in force.
12. True or False? Early duration lapses help profitability. False
13. On average, a policy must be in force at least
ACTUAL QUESTIONS AND ANSWERS|2025
UPDATE
1. Underwriting criteria generally used in the pricing of A, B, and C are correct
preferred policies include which of the following?
A. blood pressure
B. cholesterol/HDL ratios
C. family history
2. All of the following are life insurance pricing compo- asset risk
nents that are established by regulation EXCEPT:
1. reserve basis
2. tax law
3. non-forfeiture loss
4. asset risk
3. The relationship of mortality savings from a require- protective value
ment to the cost of administering the requirement is
.
4. All of the following statements regarding a protective It should measure the dif-
value study of underwriting requirements are correct ference between select
EXCEPT: and ultimate mortality.
1. It should evaluate which requirement identified the
underlying impairment.
2. It shoulder consider the proposed insured's behav-
ior in accepting or rejecting the offered policy.
3. It should measure the difference between select and
ultimate mortality.
4. It should ensure that the offered product is "at the
market."
,ALU 202 CHAPTERS 1-5 STUDY GUIDE>> 84
ACTUAL QUESTIONS AND ANSWERS|2025
UPDATE
5. A safety net that needs to be provided beyond the level risk-based capital
of reserves being held in case a company's mortality
, ALU 202 CHAPTERS 1-5 STUDY GUIDE>> 84
ACTUAL QUESTIONS AND ANSWERS|2025
UPDATE
experience turns out to be much worse than expected
is referred to as .
6. What is the single biggest cost in a life insurance prod- mortality
uct?
7. All of the following are pricing components EXCEPT: morbidity
1. mortality
2. lapse rates
3. expense levels
4. morbidity
5. interest rates
6. regulation components
8. The risk that the assets supporting the product line asset risk
lose some or all of their value.
9. The risk that the price for the insurance product is underwriting insurance
inadequate and/or underwriting standards were not risk
maintained.
10. What two things occur with more stringent underwrit- 1. expected mortality de-
ing? creases
2. fewer individuals qualify
11. This pricing component is the largest decrement af- lapse rates
fecting the number of policies ultimately in force.
12. True or False? Early duration lapses help profitability. False
13. On average, a policy must be in force at least
