ALU 202 ULTIMATE STUDY GUIDE
(Canada)
This form of trust is installation + funded during the life of grantor.
The trust pays taxes on any retained earning at the highest charge.
Subject to 21-year rule (besides while accept as true with purchases lifestyles insurance) -
ANS-Inter vivos
(Canada)
Type of inter vivos believe
Used through citizens 65 and older
Just one grantor
Used through spouses, commonplace-law spouses, equal-sex couples
Life coverage may be needed via contingent beneficiary to pay dying taxes - ANS-Joint
associate consider
(Canada)
Type of inter vivos consider
Used by means of residents sixty five and older
Just one grantor
Trust earnings is given to the grantor until loss of life, then assets are inherited by way of the
contingent beneficiary
Life coverage may be wished through contingent beneficiary to pay dying taxes - ANS-Alter-ego
consider
(Canada)
This kind of believe is a kind of inter vivos accept as true with
Ultimate beneficiaries of consider regularly are offspring of previous marriage
Joint life coverage plans usually are used - ANS-Spousal accept as true with
(Canada) Trust
Used for gain of minors or completely-disabled children
Trust is activated at time of demise of grantor
Receives favorable tax treatment
Often absolutely or partially funded with lifestyles coverage - ANS-Testamentary agree with
(Chapter 1)
,Another factor of building earnings expectancies is the assignment of ___________________.
This is capital this is held above predicted wishes of the product to ensure all policyholder
claims will be met. - ANS-Surplus
(Chapter 1)
Components set up through regulation include:
(1) Reserve foundation
(2) Non-forfeiture laws
(three) Surplus needs
(four) Tax law - ANS-(1) Established by way of states in U.S., federally in Canada
(2) Allow for go back of extra top rate within the shape of a coins price if policyholder chooses to
lapse coverage
(three) Safety net beyond degree of reserves (referred to as capital necessities or RBC)
(4) States can levy a tax on top class sales
(Chapter 1)
Expected returns must correlate _________________ with the quantity of underlying
____________ gift. - ANS-Directly
Risk
(Chapter 1)
Federal taxes are suffering from three important additives. What are they?
2 methods for U.S. Authorities to accelerate profits so groups pay tax extra quickly -
ANS-Corporate tax charge, tax reserves, deferred acquisition price/DAC tax
(1) Using tax reserves (lower reserves = better modern-day earnings for insurer, for this reason
increasing tax burden)
(2) DAC tax (disallows full deductibility of acquisition prices inside the 12 months they were
incurred; impact is to growth cutting-edge profits to speed up payment of taxes)
(Chapter 1)
Key aspect of product providing. This unluckily also is one of the lease sophisticated
components of the complete product improvement method.
,Because the industry is so rate-sensitive, a big aspect of this is strain of getting a
___________________ ________ within the market. - ANS-Profit expectation
Competitive charge
(Chapter 1)
Largest decrement affecting variety of guidelines in pressure is...
If this occurs when the top rate accrued is GREATER than the mortality fee, then this can
__________ profitability.
If this takes place while the top class is LESS than the mortality fee, the profitability will
________________.
In different words, _______________ length ____________ profitability, even as
_______________ length _______________ it. - ANS-Lapses
Hurt
Improve
Early, hurt
Later, enhance
(Chapter 1)
Mortality expectations need to be _____________, constructed in a ___________________
way, and executed in a way that both the _________________ and _____________ have a
common expertise and duty for results.
Assumptions want to be _______________________ _______________. - ANS-Predictable,
homogenous, actuary, UW
Actuarially supportable
(Chapter 1)
NAIC, via the ______________________ method, specializes in three styles of chance. What
are they?
This system focuses on _________ dangers.
, Historically, this danger has been allotted on a ________ quantity in line with __________ -
ANS-Risk-based totally capital (RBC)
Asset hazard, UW/coverage hazard, other chance
Material
Fixed, $1000
(Chapter 1)
Refers to the connection of mortality financial savings from a requirement to the price of
administering the requirement
A examine for this calls for evaluation of the following: (2 matters) - ANS-Protective price
(1) Which requirement diagnosed the impairment
(2) Insured's behavior
(Chapter 1)
Single largest value in a life insurance product is...
With more stringent UW, two matters take region. What are they? - ANS-Mortality
(1) Expected mortality decreased at the block of regulations that qualify at this tighter level of
criteria
(2) Fewer individuals will qualify beneath the more stringent method
(Chapter 1)
What are a few things expense levels can represent? - ANS-Agent reimbursement, corporate
overhead, support of an corporation device, advertising and marketing, UW fees
(Chapter 1)
What impacts the value of a product?
(4 objects) - ANS-(1) Target market
(2) Product capabilities
(3) Sales approach
(4) UW method
(Chapter 1)
(Canada)
This form of trust is installation + funded during the life of grantor.
The trust pays taxes on any retained earning at the highest charge.
Subject to 21-year rule (besides while accept as true with purchases lifestyles insurance) -
ANS-Inter vivos
(Canada)
Type of inter vivos believe
Used through citizens 65 and older
Just one grantor
Used through spouses, commonplace-law spouses, equal-sex couples
Life coverage may be needed via contingent beneficiary to pay dying taxes - ANS-Joint
associate consider
(Canada)
Type of inter vivos consider
Used by means of residents sixty five and older
Just one grantor
Trust earnings is given to the grantor until loss of life, then assets are inherited by way of the
contingent beneficiary
Life coverage may be wished through contingent beneficiary to pay dying taxes - ANS-Alter-ego
consider
(Canada)
This kind of believe is a kind of inter vivos accept as true with
Ultimate beneficiaries of consider regularly are offspring of previous marriage
Joint life coverage plans usually are used - ANS-Spousal accept as true with
(Canada) Trust
Used for gain of minors or completely-disabled children
Trust is activated at time of demise of grantor
Receives favorable tax treatment
Often absolutely or partially funded with lifestyles coverage - ANS-Testamentary agree with
(Chapter 1)
,Another factor of building earnings expectancies is the assignment of ___________________.
This is capital this is held above predicted wishes of the product to ensure all policyholder
claims will be met. - ANS-Surplus
(Chapter 1)
Components set up through regulation include:
(1) Reserve foundation
(2) Non-forfeiture laws
(three) Surplus needs
(four) Tax law - ANS-(1) Established by way of states in U.S., federally in Canada
(2) Allow for go back of extra top rate within the shape of a coins price if policyholder chooses to
lapse coverage
(three) Safety net beyond degree of reserves (referred to as capital necessities or RBC)
(4) States can levy a tax on top class sales
(Chapter 1)
Expected returns must correlate _________________ with the quantity of underlying
____________ gift. - ANS-Directly
Risk
(Chapter 1)
Federal taxes are suffering from three important additives. What are they?
2 methods for U.S. Authorities to accelerate profits so groups pay tax extra quickly -
ANS-Corporate tax charge, tax reserves, deferred acquisition price/DAC tax
(1) Using tax reserves (lower reserves = better modern-day earnings for insurer, for this reason
increasing tax burden)
(2) DAC tax (disallows full deductibility of acquisition prices inside the 12 months they were
incurred; impact is to growth cutting-edge profits to speed up payment of taxes)
(Chapter 1)
Key aspect of product providing. This unluckily also is one of the lease sophisticated
components of the complete product improvement method.
,Because the industry is so rate-sensitive, a big aspect of this is strain of getting a
___________________ ________ within the market. - ANS-Profit expectation
Competitive charge
(Chapter 1)
Largest decrement affecting variety of guidelines in pressure is...
If this occurs when the top rate accrued is GREATER than the mortality fee, then this can
__________ profitability.
If this takes place while the top class is LESS than the mortality fee, the profitability will
________________.
In different words, _______________ length ____________ profitability, even as
_______________ length _______________ it. - ANS-Lapses
Hurt
Improve
Early, hurt
Later, enhance
(Chapter 1)
Mortality expectations need to be _____________, constructed in a ___________________
way, and executed in a way that both the _________________ and _____________ have a
common expertise and duty for results.
Assumptions want to be _______________________ _______________. - ANS-Predictable,
homogenous, actuary, UW
Actuarially supportable
(Chapter 1)
NAIC, via the ______________________ method, specializes in three styles of chance. What
are they?
This system focuses on _________ dangers.
, Historically, this danger has been allotted on a ________ quantity in line with __________ -
ANS-Risk-based totally capital (RBC)
Asset hazard, UW/coverage hazard, other chance
Material
Fixed, $1000
(Chapter 1)
Refers to the connection of mortality financial savings from a requirement to the price of
administering the requirement
A examine for this calls for evaluation of the following: (2 matters) - ANS-Protective price
(1) Which requirement diagnosed the impairment
(2) Insured's behavior
(Chapter 1)
Single largest value in a life insurance product is...
With more stringent UW, two matters take region. What are they? - ANS-Mortality
(1) Expected mortality decreased at the block of regulations that qualify at this tighter level of
criteria
(2) Fewer individuals will qualify beneath the more stringent method
(Chapter 1)
What are a few things expense levels can represent? - ANS-Agent reimbursement, corporate
overhead, support of an corporation device, advertising and marketing, UW fees
(Chapter 1)
What impacts the value of a product?
(4 objects) - ANS-(1) Target market
(2) Product capabilities
(3) Sales approach
(4) UW method
(Chapter 1)
