ALU 202 EXAM WITH CORRECT ACTUAL
QUESTIONS AND CORRECTLY WELL
DEFINED ANSWERS LATEST 2025 – 2026
ALREADY GRADED A+
Concurrent Applications to Multiple Carriers to Avoid
Additional Underwriting Requirements - ANSWERS--Often
seen in fully underwritten cases.
-Can be done to avoid additional requirements common on
larger face amount cases such as:
-Federal income 1040 tax returns, audited third-party
financial statements, inspection reports, credit reports,
treadmill EKG, chest x-ray, drug screens and CBCs.
Service Level Agreements (SLAs) and time service standards
- ANSWERS--are part of the underwriting process.
-Pressure to waive requirements or issue coverage at a more
favorable rate class than justified goes by done the
underwriting/marketing relationship.
,Lack of Candor - ANSWERS-is when the insured knowingly
omits significant information.
Foreign Travel "Trip Insurance" - ANSWERS--Applying for
and accepting coverage prior to a trip to protect against and
unforeseen expense/danger and returning to let it lapse or
cancel during the free look period.
-The US has a number of states that do not permit any
adverse action, which includes postponement, for lawful
foreign travel.
Self-Employment - ANSWERS--Suspicious, especially if the
business is operated from the insured's place of residence.
-Assessment should be made to determine whether the
amount of insurance being applied for makes sense relative
to their income and occupation.
Elderly Proposed Insureds with Little or No Medical History -
ANSWERS--Most individuals by age 60 have a personal
physician and some type of documented medical history,
even if they are in good health.
-Prudence would dictate that elderly individuals have a
routine wellness check at least once every 3 years.
,Overseas Income, Assets, Liabilities, and Net Worth -
ANSWERS--individuals who list financial information in
these categories should be underwritten with caution.
-This information is impossible to verify or too expense and
impractical to investigate.
Describe a protective value study - ANSWERS-The
relationship of mortality savings from a requirements to the
cost of administering the particular requirement.
One of the two distinct issues involved in the
Reasonableness of Pricing Expectations is:
A. The value of underwriting requirements
B. Policy face amount
C. Preferred risk underwriting
D. Interest Rate Risk - ANSWERS-The value of underwriting
requirements
What has a significant impact on the ultimate cost of
product? - ANSWERS-Target market
, What takes place with more stringent underwriting? -
ANSWERS-Expected mortality decreases and Lower, more
competitive prices
The average time it takes for a carrier to recover from the
expenses incurred upon issue is: - ANSWERS-5 Years
When deciding if the cost of obtaining additional
requirements can be justified from an expense perspective,
what would be considered? - ANSWERS-The time taken to
issue a policy, the cost of the requirement and the
protective value
Federal taxes paid by an insurance company are income
based and include what? - ANSWERS-Tax reserves and
deferred acquisition cost (DAC) tax
The actual profitability of a life insurance product cannot be
determined until... - ANSWERS-Until the last policy has
lapsed or the last policyholder has died and there are no
insured lives left in the company's books.
QUESTIONS AND CORRECTLY WELL
DEFINED ANSWERS LATEST 2025 – 2026
ALREADY GRADED A+
Concurrent Applications to Multiple Carriers to Avoid
Additional Underwriting Requirements - ANSWERS--Often
seen in fully underwritten cases.
-Can be done to avoid additional requirements common on
larger face amount cases such as:
-Federal income 1040 tax returns, audited third-party
financial statements, inspection reports, credit reports,
treadmill EKG, chest x-ray, drug screens and CBCs.
Service Level Agreements (SLAs) and time service standards
- ANSWERS--are part of the underwriting process.
-Pressure to waive requirements or issue coverage at a more
favorable rate class than justified goes by done the
underwriting/marketing relationship.
,Lack of Candor - ANSWERS-is when the insured knowingly
omits significant information.
Foreign Travel "Trip Insurance" - ANSWERS--Applying for
and accepting coverage prior to a trip to protect against and
unforeseen expense/danger and returning to let it lapse or
cancel during the free look period.
-The US has a number of states that do not permit any
adverse action, which includes postponement, for lawful
foreign travel.
Self-Employment - ANSWERS--Suspicious, especially if the
business is operated from the insured's place of residence.
-Assessment should be made to determine whether the
amount of insurance being applied for makes sense relative
to their income and occupation.
Elderly Proposed Insureds with Little or No Medical History -
ANSWERS--Most individuals by age 60 have a personal
physician and some type of documented medical history,
even if they are in good health.
-Prudence would dictate that elderly individuals have a
routine wellness check at least once every 3 years.
,Overseas Income, Assets, Liabilities, and Net Worth -
ANSWERS--individuals who list financial information in
these categories should be underwritten with caution.
-This information is impossible to verify or too expense and
impractical to investigate.
Describe a protective value study - ANSWERS-The
relationship of mortality savings from a requirements to the
cost of administering the particular requirement.
One of the two distinct issues involved in the
Reasonableness of Pricing Expectations is:
A. The value of underwriting requirements
B. Policy face amount
C. Preferred risk underwriting
D. Interest Rate Risk - ANSWERS-The value of underwriting
requirements
What has a significant impact on the ultimate cost of
product? - ANSWERS-Target market
, What takes place with more stringent underwriting? -
ANSWERS-Expected mortality decreases and Lower, more
competitive prices
The average time it takes for a carrier to recover from the
expenses incurred upon issue is: - ANSWERS-5 Years
When deciding if the cost of obtaining additional
requirements can be justified from an expense perspective,
what would be considered? - ANSWERS-The time taken to
issue a policy, the cost of the requirement and the
protective value
Federal taxes paid by an insurance company are income
based and include what? - ANSWERS-Tax reserves and
deferred acquisition cost (DAC) tax
The actual profitability of a life insurance product cannot be
determined until... - ANSWERS-Until the last policy has
lapsed or the last policyholder has died and there are no
insured lives left in the company's books.
