2025|26 ALU 202 - CH 7: MULTILIFE UNDERWRITING
TEST || 130+ ACTUAL QUIZ [ANSWERED|100%
CORRECT ANSWERS.
1. Introduction - What is Multilife Underwriting?
Multilife underwriting is the underwriting of groups of life insurance applicants
primarily using nontraditional approaches to risk selection using the follow-
ing:
1) issue (GI), which doesn't include any traditional individual
underwriting
2) issue (SI), which includes fewer UWing reqs than full UWing
Multilife UWing uses products such as UL, variable life, private placement
products, COLI, BOLI: 1) guaranteed
2) simplified
2. Introduction - COLI, BOLI and other OLIs
1) In its early decades, what is commonly known as the market-
place was characterized primarily by plans intended to provide benefits to
meet the needs of executives.
2) Various pieces of legislation created opportunities for life insurance to be
used in - ways to meet these needs.: 1) COLI
2) tax-advantaged
3. Introduction - COLI, BOLI and other OLIs
has proven to be a cost-efficient and effective means for banks to
offset rising employee benefit costs.: BOLI
4. Introduction - COLI, BOLI and other OLIs
BOLI - examples of a bank's employee obligations that can be informally
funded with life insurance include executive retirement plans, deferred com-
,pensation plans, and even retiree medical obligations.
What is another benefit of BOLI (though not its main purpose)?: It may help the
bank retain its top employees
5. Introduction - COLI, BOLI and other OLIs
More recently, (CHOLI), also known as foundation-owned
life insurance (FOLI), has appeared in the marketplace and refers to plans
,designed to insure multiple or large numbers of lives on behalf of a charity
or foundation.: charity-owned life insurance
6. Introduction - COLI, BOLI and other OLIs
True or False:
There are several significant differences between CHOLI and both COLI and
BOLI, which greatly compromise the underwriter's ability to provide either GI
or SI for that purpose.: True
7. Principles of Multilife Underwriting
The primary focus of all multilife underwriting is the avoidance of
- .: anti-selection
8. Principles of Multilife Underwriting - Voluntary vs. Nonvoluntary Plan De-
signs
plan designs are those in which plan participation is
compulsory and the amount of life insurance to be placed on each life is fixed,
that is, the amount of coverage applied for on each life is predetermined by a
method not of the participant's choosing.: Nonvoluntary
9. Principles of Multilife Underwriting - Voluntary vs. Nonvoluntary Plan De-
signs
With nonvoluntary programs, much of the concern with anti-selection is
.: eliminated
10. Principles of Multilife Underwriting - Voluntary vs. Nonvoluntary Plan De-
signs
plans are not as protected from anti-selection by their plan
design. The mere fact that the proposed insured has a choice of whether or
not to participate is highly selective.
-Such plans w/ limited UWing are called SI programs: Voluntary
11. Principles of Multilife Underwriting - Eligibility: Executive vs. NonExecu-
tive
Another key consideration in the underwriting and price of multilife business
is considering what determines the participant's to partic-
ipate in the plan.: eligibility
, 12. Principles of Multilife Underwriting - Eligibility: Executive vs. NonExecu-
tive
With respect to COLI, for example, eligibility can be determined by whether or
not the eligible employee is an executive. The benefits of this definition are:
1) The company's management is provided with guidelines to ensure that all
current and future eligible employees are properly enrolled
2) The plan is provided with guidelines as to who to
enroll in the program
3) The insurance company can be confident that the employer remains
with the agreed upon eligibility requirements: 2) admin-
istrator
3) consistent
13. Principles of Multilife Underwriting - Eligibility: Executive vs. NonExecu-
tive
requirements are important criteria in establishing the
expected overall mortality of a multilife plan, and as such, must be strictly
followed.: Eligibility
14. Principles of Multilife Underwriting - Eligibility: Executive vs. NonExecu-
tive
For many plans the definition of is based on a title, such as
all vice presidents and above.: executive
-eligibility can also be based on salary or equity ownership in the company.
15. Principles of Multilife Underwriting - Eligibility: Executive vs. NonExecu-
tive
Whether or not the eligible participant is an executive has at least 2 pertinent
implications:
1) First, the availability of GI or SI underwriting can be contingent upon the
insured group being comprised of executives .
2) Second, an employer can also wish to receive the maximum benefit of
certain tax advantages that are available on some multilife plans. This requires
TEST || 130+ ACTUAL QUIZ [ANSWERED|100%
CORRECT ANSWERS.
1. Introduction - What is Multilife Underwriting?
Multilife underwriting is the underwriting of groups of life insurance applicants
primarily using nontraditional approaches to risk selection using the follow-
ing:
1) issue (GI), which doesn't include any traditional individual
underwriting
2) issue (SI), which includes fewer UWing reqs than full UWing
Multilife UWing uses products such as UL, variable life, private placement
products, COLI, BOLI: 1) guaranteed
2) simplified
2. Introduction - COLI, BOLI and other OLIs
1) In its early decades, what is commonly known as the market-
place was characterized primarily by plans intended to provide benefits to
meet the needs of executives.
2) Various pieces of legislation created opportunities for life insurance to be
used in - ways to meet these needs.: 1) COLI
2) tax-advantaged
3. Introduction - COLI, BOLI and other OLIs
has proven to be a cost-efficient and effective means for banks to
offset rising employee benefit costs.: BOLI
4. Introduction - COLI, BOLI and other OLIs
BOLI - examples of a bank's employee obligations that can be informally
funded with life insurance include executive retirement plans, deferred com-
,pensation plans, and even retiree medical obligations.
What is another benefit of BOLI (though not its main purpose)?: It may help the
bank retain its top employees
5. Introduction - COLI, BOLI and other OLIs
More recently, (CHOLI), also known as foundation-owned
life insurance (FOLI), has appeared in the marketplace and refers to plans
,designed to insure multiple or large numbers of lives on behalf of a charity
or foundation.: charity-owned life insurance
6. Introduction - COLI, BOLI and other OLIs
True or False:
There are several significant differences between CHOLI and both COLI and
BOLI, which greatly compromise the underwriter's ability to provide either GI
or SI for that purpose.: True
7. Principles of Multilife Underwriting
The primary focus of all multilife underwriting is the avoidance of
- .: anti-selection
8. Principles of Multilife Underwriting - Voluntary vs. Nonvoluntary Plan De-
signs
plan designs are those in which plan participation is
compulsory and the amount of life insurance to be placed on each life is fixed,
that is, the amount of coverage applied for on each life is predetermined by a
method not of the participant's choosing.: Nonvoluntary
9. Principles of Multilife Underwriting - Voluntary vs. Nonvoluntary Plan De-
signs
With nonvoluntary programs, much of the concern with anti-selection is
.: eliminated
10. Principles of Multilife Underwriting - Voluntary vs. Nonvoluntary Plan De-
signs
plans are not as protected from anti-selection by their plan
design. The mere fact that the proposed insured has a choice of whether or
not to participate is highly selective.
-Such plans w/ limited UWing are called SI programs: Voluntary
11. Principles of Multilife Underwriting - Eligibility: Executive vs. NonExecu-
tive
Another key consideration in the underwriting and price of multilife business
is considering what determines the participant's to partic-
ipate in the plan.: eligibility
, 12. Principles of Multilife Underwriting - Eligibility: Executive vs. NonExecu-
tive
With respect to COLI, for example, eligibility can be determined by whether or
not the eligible employee is an executive. The benefits of this definition are:
1) The company's management is provided with guidelines to ensure that all
current and future eligible employees are properly enrolled
2) The plan is provided with guidelines as to who to
enroll in the program
3) The insurance company can be confident that the employer remains
with the agreed upon eligibility requirements: 2) admin-
istrator
3) consistent
13. Principles of Multilife Underwriting - Eligibility: Executive vs. NonExecu-
tive
requirements are important criteria in establishing the
expected overall mortality of a multilife plan, and as such, must be strictly
followed.: Eligibility
14. Principles of Multilife Underwriting - Eligibility: Executive vs. NonExecu-
tive
For many plans the definition of is based on a title, such as
all vice presidents and above.: executive
-eligibility can also be based on salary or equity ownership in the company.
15. Principles of Multilife Underwriting - Eligibility: Executive vs. NonExecu-
tive
Whether or not the eligible participant is an executive has at least 2 pertinent
implications:
1) First, the availability of GI or SI underwriting can be contingent upon the
insured group being comprised of executives .
2) Second, an employer can also wish to receive the maximum benefit of
certain tax advantages that are available on some multilife plans. This requires
