ALU 202 Exam Questions with 100%
Correct Answers Latest Versions 2025 Top
Rated A+
Which of the following have a significant impact on the ultimate cost of a life insurance
product?
A. target market
B. sales approach
C. underwriting process
> A only is correct
> A and B are correct
> B and C are correct
> A, B and C are all correct
A, B and C are all correct
Which of the following takes place with more stringent underwriting?
A. more individuals will qualify for better rates
B. expected mortality decreases
C. lower, more competitive prices
,> C only is correct
> A and B are correct
> B and C are correct
> A, B and C are all correct
B and C are correct
(fewer individuals qualify under more stringent underwriting)
The average time it takes for a carrier to recover from the expenses incurred upon issue of an
insurance product is:
A. 2 years
B. 3 years
C. 5 years
D. 6 years
C. 5 years
When deciding if the cost of obtaining additional requirements can be justified from an expense
perspective, which of the following would be considered?
A. time taken to issue a policy
B. cost of the requirement
C. protective value
> A only is correct
> A and B are correct
> B and C are correct
,> A, B and C are all correct
A, B and C are all correct
Federal taxes paid by an insurance company are income based and include which of the
following?
A. tax reserves
B. deferred acquisition cost (DAC) tax
C. social security tax
> A only is correct
> A and B are correct
> B and C are correct
> A, B and C are all correct
A and B are correct
When the cost of an underwriting requirement is equal to the mortality savings, it is known as:
A. benefit amount
B. break-even point
C. protective value amount
D. net amount
A. break-even point
, Cost/benefit studies can be used to evaluate which of the following requirements?
A. attending physcians' statement (APS)
B. electrocardiogram (EKG)
C. motor vehicle report (MVR)
>A
> A and B
> B and C
> A, B, and C
> A, B, and C
The first step of the cost-benefit study is:
A. to review all underwriting requirements
B. identify a group to be studied
C. to determine the goal of the study
D. to separate smoker and non-smoker cases
C. to determine the goal of the study
When proposed insured applies for an death benefit amount below a specific requirements
threshold to mask a known impairment, it is referred to as:
A. herd instinct
B. sentinel effect
Correct Answers Latest Versions 2025 Top
Rated A+
Which of the following have a significant impact on the ultimate cost of a life insurance
product?
A. target market
B. sales approach
C. underwriting process
> A only is correct
> A and B are correct
> B and C are correct
> A, B and C are all correct
A, B and C are all correct
Which of the following takes place with more stringent underwriting?
A. more individuals will qualify for better rates
B. expected mortality decreases
C. lower, more competitive prices
,> C only is correct
> A and B are correct
> B and C are correct
> A, B and C are all correct
B and C are correct
(fewer individuals qualify under more stringent underwriting)
The average time it takes for a carrier to recover from the expenses incurred upon issue of an
insurance product is:
A. 2 years
B. 3 years
C. 5 years
D. 6 years
C. 5 years
When deciding if the cost of obtaining additional requirements can be justified from an expense
perspective, which of the following would be considered?
A. time taken to issue a policy
B. cost of the requirement
C. protective value
> A only is correct
> A and B are correct
> B and C are correct
,> A, B and C are all correct
A, B and C are all correct
Federal taxes paid by an insurance company are income based and include which of the
following?
A. tax reserves
B. deferred acquisition cost (DAC) tax
C. social security tax
> A only is correct
> A and B are correct
> B and C are correct
> A, B and C are all correct
A and B are correct
When the cost of an underwriting requirement is equal to the mortality savings, it is known as:
A. benefit amount
B. break-even point
C. protective value amount
D. net amount
A. break-even point
, Cost/benefit studies can be used to evaluate which of the following requirements?
A. attending physcians' statement (APS)
B. electrocardiogram (EKG)
C. motor vehicle report (MVR)
>A
> A and B
> B and C
> A, B, and C
> A, B, and C
The first step of the cost-benefit study is:
A. to review all underwriting requirements
B. identify a group to be studied
C. to determine the goal of the study
D. to separate smoker and non-smoker cases
C. to determine the goal of the study
When proposed insured applies for an death benefit amount below a specific requirements
threshold to mask a known impairment, it is referred to as:
A. herd instinct
B. sentinel effect
