ALU 202 Ultimate Study Guide | Comprehensive Exam Questions & Answers | Exam Prep
Underwriting criteria generally used in the pricing of All are correct
preferred policies include which of the following?
(Chapter 1)
(A) Blood pressure
(B) Cholesterol/HDL ratios
(C) Family history
All of the following are life insurance pricing components Asset risk
that are established by regulation EXCEPT:
(Chapter 1)
(A) Reserve basis
(B) Tax law
(C) Non-forfeiture laws
(D) Asset risk
The relationship of mortality savings from a requirement to Protective value
the cost of administering the requirement is...
(Chapter 1)
All of the following statements regarding a protective value It should measure the difference between select and ultimate mortality
study of underwriting requirements are correct EXCEPT:
(Chapter 1)
(A) It should evaluate which requirement identified the
underlying impairment
(B) It should consider the PI's behavior in accepting or
rejecting the offered policy
(C) It should measure the difference between select and
ultimate mortality
(D) It should ensure that the offered product is "at the
market"
A safety net that needs to be provided beyond the level of Risk-based capital
reserves being held in case of a company's mortality
experience turns out to eb much worse than expected is (Chapter 1)
referred to as...
For direct carriers, the average percent of premium 50%
assigned to cover mortality is...
(Chapter 2)
Companies will update existing cost benefit studies for All are correct
which of the following reasons?
(Chapter 2)
(A) Changes in pricing
(B) Competitive landscape
(C) Actual experience
A hit rate of 3% associated with a table 8 (200 debit) 6% increase in mortality
average rating results in which of the following?
(Chapter 2)
(A) 6% reduction in profit margin
(B) 6% increase in mortality
(C) 3% increase in mortality
(D) 6% reduction in mortality
Which of the following statements about cost/benefit B only is correct
studies is correct?
(Chapter 2)
(A) It is based on the historical mortality found by a
requirement being studied
(B) It assumes mortality plays out according to UW
guidelines
(C) Interest and lapse rates are not embedded in to the
results
Stuvia 2026-2027
, ALU 202 Ultimate Study Guide | Comprehensive Exam Questions & Answers | Exam Prep
Actuaries will create a double decrement table that takes Lapses and deaths
which of the following two factors into consideration?
(Chapter 2)
(A) Ratings and declines
(B) Lapses and deaths
(C) Placed and non-placed cases
(D) Declines and non-placed cases
The insured lives mortality table used to establish life Standard and ordinary
insurance policy reserves is:
(Chapter 3)
(A) Group life
(B) Standard and ordinary
(C) Individual annuity
(D) Individual ultimate
All of the following statements regarding population life They distinguish between the employed and the unemployed
tables are correct EXCEPT:
(Chapter 3)
(A) They are based on death rates calculated for large
segments of the population
(B) They do not separate out smokers
(C) They distinguish between the employed and the
unemployed
(D) They are often segmented by gender
When calculating mortality rates, the future values of a A only is correct
fixed death benefit is affected by which of the following?
(Chapter 3)
(A) Inflation
(B) Anticipated lapse rates
(C) Anticipated interest
The insured lives mortality table that will typically have the Individual annuity
lowest mortality rate is:
(Chapter 3)
(A) Individual annuity
(B) Group life
(C) Pension life
(D) Disabled lives life
In calculating mortality rates, the symbol "dx" refers to the Dying during a specified interval
number of individuals:
(Chapter 3)
(A) Applying for insurance during a specified interval
(B) Dying during a specified interval
(C) Exposed to the risk of dying
(D) Alive at the beginning of a specified interval
All of the following are coronary risk factors in the Build
Framingham Study EXCEPT:
(Chapter 4)
(A) Build
(B) Cholesterol
(C) Gender
(D) Blood pressure
Which of the following statements regarding multivariate A and B are correct
regression is/are correct?
(Chapter 4)
(A) Many variables are considered at the same time
(B) It is a technique employed by the Framingham Study
(C) It finds the most significant preferred risk factor and
ignores the rest
Stuvia 2026-2027
, ALU 202 Ultimate Study Guide | Comprehensive Exam Questions & Answers | Exam Prep
The risk stratification model that uses debits and credits to Point system
determine the risk classes is:
(Chapter 4)
(A) Knock-out
(B) Point system
(C) Weighted average
(D) Excess mortality
All of the following risk factors are used by many Gender
companies to mitigate the accidental death hazard in
setting their preferred criteria EXCEPT: (Chapter 4)
(A) Gender
(B) Avocations
(C) Criminal history
(D) Hazardous occupations
A multivariate Cox proportional hazard model studies C only is correct
mortality for BMI, BP, and cholesterol and reports hazard
ratios (HR) for each factor. Which of the following (Chapter 4)
statements are true:
(A) The three HRs represent both the individual risk plus
overlap risk associated with the other two factors studied in
the article
(B) An individual can only die of one thing so only the
largest hazard ratio should be applied when underwriting
(C) Each HR has controlled for the hazard associated with
the other two
The provision that allows changing a term policy to a Term conversion
permanent product without additional medical
requirements is a: (Chapter 5)
(A) Guaranteed insurability option
(B) Term conversion
(C) Re-entry
(D) Reinstatement
A policy rider allowing defined increments of additional Guaranteed insurability
insurance to be purchased at set future intervals without
UW evidence is: (Chapter 5)
(A) Re-entry
(B) Conversion
(C) Guaranteed renewable
(D) Guaranteed insurability
Post-issue policy changes that typically require UW review C only is correct
include which of the following?
(Chapter 5)
(A) Beneficiary change
(B) Conversion of a term policy
(C) Requests for rating reductions
All of the following would start a new contestability period Beneficiary change
on a policy change EXCEPT:
(Chapter 5)
(A) The addition of a spouse rider
(B) An increase in the face amount
(C) Reinstatement
(D) Beneficiary change
Stuvia 2026-2027
, ALU 202 Ultimate Study Guide | Comprehensive Exam Questions & Answers | Exam Prep
In the U.S., a tax provision that allows an owner to 1035 exchange
exchange a life insurance policy for a new policy covering
the same life, without paying tax on the investment gains, (Chapter 5)
is a:
(A) Re-entry
(B) 1035 exchange
(C) Conversion
(D) Reinstatement
All of the following statements regarding UW an application The contestable period does not start over
for a rate reduction are correct EXCEPT:
(Chapter 5)
(A) The contestable period does not start over
(B) An MIB authorization is often required
(C) There is an economic incentive for the insurer to keep
requirements to a minimum
(D) The reinsurer will need to approve the reduction if the
policy is facultatively reinsured
A U.S. public trust that can last for an unlimited period of Charitable trust
time to better serve society is an:
(Chapter 6)
(A) Irrevocable life insurance trust
(B) Revocable trust
(C) Charitable trust
(D) Dynasty trust
In Canada, all of the following statements regarding the tax There is no tax break for property directly left to a spouse
treatment of deceased individuals are correct EXCEPT:
(Chapter 6)
(A) There is no estate tax
(B) All capital property of the deceased can be subject to
capital gain taxation
(C) There is no tax break for property directly left to a
spouse
(D) Tax credits are allowed for charitable donations
Mr. Jones was a U.S. citizen and the sole owner of a $6,700,000
company. After being widowed, he died in 2012. If his
funeral and administrative expenses were $25,000, what
would be the value of his estate for estate tax purposes?
Assets:
Company $5,000,000
Personal residence $1,000,000
IRA $400,000
Marketable securities $125,000
Personal property $400,000
Liabilities:
Mortgage on personal residence $200,000
In the U.S., considerations for projecting appropriate estate Assuming that investment income will not be reinvested in the estate
growth include all of the following EXCEPT:
(Chapter 6)
(A) Selecting a reasonable rate of return on assets in the
estate
(B) Reflecting the types of assets that make up the estate
(C) Adjusting for the age of the estate owner
(D) Assuming that investment income will not be
reinvested in the estate
Stuvia 2026-2027
Underwriting criteria generally used in the pricing of All are correct
preferred policies include which of the following?
(Chapter 1)
(A) Blood pressure
(B) Cholesterol/HDL ratios
(C) Family history
All of the following are life insurance pricing components Asset risk
that are established by regulation EXCEPT:
(Chapter 1)
(A) Reserve basis
(B) Tax law
(C) Non-forfeiture laws
(D) Asset risk
The relationship of mortality savings from a requirement to Protective value
the cost of administering the requirement is...
(Chapter 1)
All of the following statements regarding a protective value It should measure the difference between select and ultimate mortality
study of underwriting requirements are correct EXCEPT:
(Chapter 1)
(A) It should evaluate which requirement identified the
underlying impairment
(B) It should consider the PI's behavior in accepting or
rejecting the offered policy
(C) It should measure the difference between select and
ultimate mortality
(D) It should ensure that the offered product is "at the
market"
A safety net that needs to be provided beyond the level of Risk-based capital
reserves being held in case of a company's mortality
experience turns out to eb much worse than expected is (Chapter 1)
referred to as...
For direct carriers, the average percent of premium 50%
assigned to cover mortality is...
(Chapter 2)
Companies will update existing cost benefit studies for All are correct
which of the following reasons?
(Chapter 2)
(A) Changes in pricing
(B) Competitive landscape
(C) Actual experience
A hit rate of 3% associated with a table 8 (200 debit) 6% increase in mortality
average rating results in which of the following?
(Chapter 2)
(A) 6% reduction in profit margin
(B) 6% increase in mortality
(C) 3% increase in mortality
(D) 6% reduction in mortality
Which of the following statements about cost/benefit B only is correct
studies is correct?
(Chapter 2)
(A) It is based on the historical mortality found by a
requirement being studied
(B) It assumes mortality plays out according to UW
guidelines
(C) Interest and lapse rates are not embedded in to the
results
Stuvia 2026-2027
, ALU 202 Ultimate Study Guide | Comprehensive Exam Questions & Answers | Exam Prep
Actuaries will create a double decrement table that takes Lapses and deaths
which of the following two factors into consideration?
(Chapter 2)
(A) Ratings and declines
(B) Lapses and deaths
(C) Placed and non-placed cases
(D) Declines and non-placed cases
The insured lives mortality table used to establish life Standard and ordinary
insurance policy reserves is:
(Chapter 3)
(A) Group life
(B) Standard and ordinary
(C) Individual annuity
(D) Individual ultimate
All of the following statements regarding population life They distinguish between the employed and the unemployed
tables are correct EXCEPT:
(Chapter 3)
(A) They are based on death rates calculated for large
segments of the population
(B) They do not separate out smokers
(C) They distinguish between the employed and the
unemployed
(D) They are often segmented by gender
When calculating mortality rates, the future values of a A only is correct
fixed death benefit is affected by which of the following?
(Chapter 3)
(A) Inflation
(B) Anticipated lapse rates
(C) Anticipated interest
The insured lives mortality table that will typically have the Individual annuity
lowest mortality rate is:
(Chapter 3)
(A) Individual annuity
(B) Group life
(C) Pension life
(D) Disabled lives life
In calculating mortality rates, the symbol "dx" refers to the Dying during a specified interval
number of individuals:
(Chapter 3)
(A) Applying for insurance during a specified interval
(B) Dying during a specified interval
(C) Exposed to the risk of dying
(D) Alive at the beginning of a specified interval
All of the following are coronary risk factors in the Build
Framingham Study EXCEPT:
(Chapter 4)
(A) Build
(B) Cholesterol
(C) Gender
(D) Blood pressure
Which of the following statements regarding multivariate A and B are correct
regression is/are correct?
(Chapter 4)
(A) Many variables are considered at the same time
(B) It is a technique employed by the Framingham Study
(C) It finds the most significant preferred risk factor and
ignores the rest
Stuvia 2026-2027
, ALU 202 Ultimate Study Guide | Comprehensive Exam Questions & Answers | Exam Prep
The risk stratification model that uses debits and credits to Point system
determine the risk classes is:
(Chapter 4)
(A) Knock-out
(B) Point system
(C) Weighted average
(D) Excess mortality
All of the following risk factors are used by many Gender
companies to mitigate the accidental death hazard in
setting their preferred criteria EXCEPT: (Chapter 4)
(A) Gender
(B) Avocations
(C) Criminal history
(D) Hazardous occupations
A multivariate Cox proportional hazard model studies C only is correct
mortality for BMI, BP, and cholesterol and reports hazard
ratios (HR) for each factor. Which of the following (Chapter 4)
statements are true:
(A) The three HRs represent both the individual risk plus
overlap risk associated with the other two factors studied in
the article
(B) An individual can only die of one thing so only the
largest hazard ratio should be applied when underwriting
(C) Each HR has controlled for the hazard associated with
the other two
The provision that allows changing a term policy to a Term conversion
permanent product without additional medical
requirements is a: (Chapter 5)
(A) Guaranteed insurability option
(B) Term conversion
(C) Re-entry
(D) Reinstatement
A policy rider allowing defined increments of additional Guaranteed insurability
insurance to be purchased at set future intervals without
UW evidence is: (Chapter 5)
(A) Re-entry
(B) Conversion
(C) Guaranteed renewable
(D) Guaranteed insurability
Post-issue policy changes that typically require UW review C only is correct
include which of the following?
(Chapter 5)
(A) Beneficiary change
(B) Conversion of a term policy
(C) Requests for rating reductions
All of the following would start a new contestability period Beneficiary change
on a policy change EXCEPT:
(Chapter 5)
(A) The addition of a spouse rider
(B) An increase in the face amount
(C) Reinstatement
(D) Beneficiary change
Stuvia 2026-2027
, ALU 202 Ultimate Study Guide | Comprehensive Exam Questions & Answers | Exam Prep
In the U.S., a tax provision that allows an owner to 1035 exchange
exchange a life insurance policy for a new policy covering
the same life, without paying tax on the investment gains, (Chapter 5)
is a:
(A) Re-entry
(B) 1035 exchange
(C) Conversion
(D) Reinstatement
All of the following statements regarding UW an application The contestable period does not start over
for a rate reduction are correct EXCEPT:
(Chapter 5)
(A) The contestable period does not start over
(B) An MIB authorization is often required
(C) There is an economic incentive for the insurer to keep
requirements to a minimum
(D) The reinsurer will need to approve the reduction if the
policy is facultatively reinsured
A U.S. public trust that can last for an unlimited period of Charitable trust
time to better serve society is an:
(Chapter 6)
(A) Irrevocable life insurance trust
(B) Revocable trust
(C) Charitable trust
(D) Dynasty trust
In Canada, all of the following statements regarding the tax There is no tax break for property directly left to a spouse
treatment of deceased individuals are correct EXCEPT:
(Chapter 6)
(A) There is no estate tax
(B) All capital property of the deceased can be subject to
capital gain taxation
(C) There is no tax break for property directly left to a
spouse
(D) Tax credits are allowed for charitable donations
Mr. Jones was a U.S. citizen and the sole owner of a $6,700,000
company. After being widowed, he died in 2012. If his
funeral and administrative expenses were $25,000, what
would be the value of his estate for estate tax purposes?
Assets:
Company $5,000,000
Personal residence $1,000,000
IRA $400,000
Marketable securities $125,000
Personal property $400,000
Liabilities:
Mortgage on personal residence $200,000
In the U.S., considerations for projecting appropriate estate Assuming that investment income will not be reinvested in the estate
growth include all of the following EXCEPT:
(Chapter 6)
(A) Selecting a reasonable rate of return on assets in the
estate
(B) Reflecting the types of assets that make up the estate
(C) Adjusting for the age of the estate owner
(D) Assuming that investment income will not be
reinvested in the estate
Stuvia 2026-2027
