Alu 202 Ultimate Study Guide|| 250+ Questions And Answers|2025 Update

ALU 202 ULTIMATE STUDY GUIDE|| 250+
QUESTIONS AND ANSWERS|2025 UPDATE



1. Underwriting criteria generally used All are correct
in the pricing of preferred policies
include which of the following? (Chapter 1)

(A) Blood pressure
(B) Cholesterol/HDL ratios
(C) Family history

2. All of the following are life insurance Asset risk
pricing components that are estab-
lished by regulation EXCEPT: (Chapter 1)

(A) Reserve basis
(B) Tax law
(C) Non-forfeiture laws
(D) Asset risk

3. The relationship of mortality savings Protective value
from a requirement to the cost of
administering the requirement is... ment identified the underlyin
im- pairment
4. All of the following statements re- (B) It should consider the PI's
garding a protective value study of behav- ior in accepting or
underwriting requirements are cor- rejecting the of- fered policy
rect EXCEPT: (C) It should measure the
difference
(A) It should evaluate which require-

,(Chapter 1)

It should measure the ditterence between select and ultimate
mortality

(Chapter 1)

, between select and ultimate mortal-
ity
(D) It should ensure that the offered
product is "at the market"

5. A safety net that needs to be pro- Risk-based capital
vided beyond the level of reserves
being held in case of a company's (Chapter 1)
mortality experience turns out to eb
much worse than expected is re-
ferred to as...

6. For direct carriers, the average per- 50%
cent of premium assigned to cover
mortality is... (Chapter 2)

7. Companies will update existing cost All are correct
benefit studies for which of the fol-
lowing reasons? (Chapter 2)

(A) Changes in pricing
(B) Competitive landscape
(C) Actual experience

8. A hit rate of 3% associated with a 6% increase in mortality
table 8 (200 debit) average rating re-
sults 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

, 9. Which of the following statements
v v v v B only is correct
v v v



about cost/benefit studies is cor-
v v v v v



rect?
v
v (Chapter 2) v




(A) It is based on the historical mor-
v v v v v v



vtality found by a requirement being
v v v v v



vstudied
(B) It assumes mortality plays out ac-
v v v v v



vcording to UW guidelines v v v



(C) Interest and lapse rates are not v v v v v



vembedded in to the results v v v v




10. Actuaries will create a double decre- Lapses and deaths
v v v v v v v v


ment table that takes which of the
v v v v v v



following two factors into consider- (Chapter 2)
v v v v
v




v ation?

(A) Ratings and declines v v



(B) Lapses and deaths v v



(C) Placed and non-placed cases v v v



(D) Declines and non-placed cases v v v




11. The insured lives mortality table
v Standard and ordinary
v v v v v



used to establish life insurance poli-
v v v v v v



cy reserves is:
v v
(Chapter 3) v
v v




(A) Group life v



(B) Standard and ordinary v v



(C) Individual annuity v



(D) Individual ultimate v




12. All of the following statements re-
v v v v v They distinguish between the employed and the un-
v v v v v v v



garding population life tables are
v v v v v employed
v