ALU 202 CHAPTER 8 EXAM QUESTIONS ANSWERED CORRECTLY LATEST
UPDATE 2026
Accelerated Death Benefits - Answers An advance cash payment of life insurance
death benefits paid by a life insurance company to an insured who is terminally ill.
Activities of Daily Living - Answers activities that people do independently every
day including eating, bathing, dressing, transferring, maintaining bowel and bladder
functions and toileting.
Any Occupation - Answers a definition of total disability that defines Total disability
as the insured's inability due to injury or sickness to perform the important duties of
any gainful occupation for which he/she is reasonably qualified. The insured must be
under the regular care and attendance of a legally qualified doctor.
Benefit Period - Answers The maximum length of time an insured is eligible to
collect benefits while on disability claim. Normal benefit periods are 2 yrs, 5 yrs, and
to age 65.
Benefit Payment - Answers Usually monthly for DI, lump sum for Life Insurance.
Cognitive Impairment - Answers problems with attention, affect memory or other
loss of intellectual capacity.
Collateral Assignment - Answers the legal transfer of one person's interest in a policy
to a creditor as security for a debt. The creditor is reimbursed the amount owed on the
debit and the remaining proceeds are paid to the beneficiary.
Conditionally Renewable - Answers policy type in which the company can change
the premium, policy provision or cancel the policy as long as it does so for all
insureds within a specific class who own the contract. (Also referred to as cancelable.)
Contractual Exclusion Rider - Answers Riders that are included in the wording of
every policy of a particular type and outline situations where benefits would not be
payable. Typical exclusion riders (no benefit if disability secondary to):
1. an act or accident of war, declared or undeclared, due to any type of military
conflict
2. committing or attempting to commit a felony or engaging in illegal occupation
3. normal pregnancy or childbirth
4. transplant surgery where a part of the insured's body is transplanted to another
person, during first 6 months of policy
5. cosmetic surgery during first 6 months of policy, etc.
, Death benefit - Answers Life insurance proceeds payable upon proof of the insured's
death.
Delayed Word Recall Test - Answers a memory exercise designed to be used as a
screening tool for short term memory loss.
Disability Buy-Sell - Answers Designed to help fund a buy-sell agreement. The
disability component will provide for how long a total disability must last before the
buy-out is triggered, and how a total disability is to be defined or determined.
Earned Income - Answers Salary, commissions, fees, other income earned as a direct
result of work activities in the individual's occupation.
Other payments that can be included, provided they are received on a regular basis
and would no longer continue should the individual become disabled, are bonuses,
overtime, and contributions to pension/profit-sharing plans.
Exclusion Rider - Answers a rider attached to an insurance policy that excludes
losses arising from certain conditions or avocations
Facility Care - Answers health or personal care services required on a long-term basis
in a facility such as a nursing home.
Guaranteed Renewable - Answers policy type that insurance company cannot cancel
the policy or change the policy as long as the premiums are paid.
Home Care - Answers service provided in the insured's home by skilled caregivers
Instrumental Activities of daily living - Answers social survival skills that must be
performed on a household or individual basis
Irrevocable beneficiary - Answers a beneficiary whose interest in an insurance policy
cannot be revoked without that individuals consent
Key Person - Answers an employee whose skill sets are considered so essential to a
company that the employee would be difficult to replace if they were unable to work
Legally Competent - Answers a person of legal age and sound mind who is
recognized by law as being able to contract with others
Long Term Care Facility - Answers an institution licensed as a convalescent or
skilled nursing facility
Maximum Benefits - Answers The goal of most companies is to replace 75-80% of
after-tax income for lower income individuals and 35-50% for individuals in the
higher income brackets.
Morbidity - Answers the prevalence of disease or disability within a population
UPDATE 2026
Accelerated Death Benefits - Answers An advance cash payment of life insurance
death benefits paid by a life insurance company to an insured who is terminally ill.
Activities of Daily Living - Answers activities that people do independently every
day including eating, bathing, dressing, transferring, maintaining bowel and bladder
functions and toileting.
Any Occupation - Answers a definition of total disability that defines Total disability
as the insured's inability due to injury or sickness to perform the important duties of
any gainful occupation for which he/she is reasonably qualified. The insured must be
under the regular care and attendance of a legally qualified doctor.
Benefit Period - Answers The maximum length of time an insured is eligible to
collect benefits while on disability claim. Normal benefit periods are 2 yrs, 5 yrs, and
to age 65.
Benefit Payment - Answers Usually monthly for DI, lump sum for Life Insurance.
Cognitive Impairment - Answers problems with attention, affect memory or other
loss of intellectual capacity.
Collateral Assignment - Answers the legal transfer of one person's interest in a policy
to a creditor as security for a debt. The creditor is reimbursed the amount owed on the
debit and the remaining proceeds are paid to the beneficiary.
Conditionally Renewable - Answers policy type in which the company can change
the premium, policy provision or cancel the policy as long as it does so for all
insureds within a specific class who own the contract. (Also referred to as cancelable.)
Contractual Exclusion Rider - Answers Riders that are included in the wording of
every policy of a particular type and outline situations where benefits would not be
payable. Typical exclusion riders (no benefit if disability secondary to):
1. an act or accident of war, declared or undeclared, due to any type of military
conflict
2. committing or attempting to commit a felony or engaging in illegal occupation
3. normal pregnancy or childbirth
4. transplant surgery where a part of the insured's body is transplanted to another
person, during first 6 months of policy
5. cosmetic surgery during first 6 months of policy, etc.
, Death benefit - Answers Life insurance proceeds payable upon proof of the insured's
death.
Delayed Word Recall Test - Answers a memory exercise designed to be used as a
screening tool for short term memory loss.
Disability Buy-Sell - Answers Designed to help fund a buy-sell agreement. The
disability component will provide for how long a total disability must last before the
buy-out is triggered, and how a total disability is to be defined or determined.
Earned Income - Answers Salary, commissions, fees, other income earned as a direct
result of work activities in the individual's occupation.
Other payments that can be included, provided they are received on a regular basis
and would no longer continue should the individual become disabled, are bonuses,
overtime, and contributions to pension/profit-sharing plans.
Exclusion Rider - Answers a rider attached to an insurance policy that excludes
losses arising from certain conditions or avocations
Facility Care - Answers health or personal care services required on a long-term basis
in a facility such as a nursing home.
Guaranteed Renewable - Answers policy type that insurance company cannot cancel
the policy or change the policy as long as the premiums are paid.
Home Care - Answers service provided in the insured's home by skilled caregivers
Instrumental Activities of daily living - Answers social survival skills that must be
performed on a household or individual basis
Irrevocable beneficiary - Answers a beneficiary whose interest in an insurance policy
cannot be revoked without that individuals consent
Key Person - Answers an employee whose skill sets are considered so essential to a
company that the employee would be difficult to replace if they were unable to work
Legally Competent - Answers a person of legal age and sound mind who is
recognized by law as being able to contract with others
Long Term Care Facility - Answers an institution licensed as a convalescent or
skilled nursing facility
Maximum Benefits - Answers The goal of most companies is to replace 75-80% of
after-tax income for lower income individuals and 35-50% for individuals in the
higher income brackets.
Morbidity - Answers the prevalence of disease or disability within a population
