The difference between the present value of future benefits payable under a life insurance policy and the present value of net premiums for the policy is the policy’s A) retrospective reserve. B) policyholders surplus. C) prospective reserve. D) admitted assets. ANSWER Answer: C
Date: September 19th, 2020
Purposes of life insurance policy reserves include which of the following? I. Legal test of the insurer’s solvency II. Formal recognition of the obligation to pay future claims A) I only B) II only C) both I and II D) neither I nor II ANSWER Answer: C
Date: September 19th, 2020
Beth purchased a $50,000 nonparticipating whole life insurance policy. The annual premium was $1,278. The cash value of the policy after 10 years will be $13,740. The future value of $1 deposited at the start of the year for 10 years, assuming 5 percent interest, is $13.207. If the premiums were invested at 5 percent […]
Date: September 19th, 2020
The National Association of Insurance Commissioners (NAIC) has drafted a “Life Insurance Policy Illustration” model law that most states have adopted. Which of the following statements concerning this model law is (are) true? I. The policy illustration must include a narrative summary describing the basic characteristics of the policy. II. The policy illustration must include […]
Date: September 19th, 2020
ABC Life Insurance Company is offering a new product. The product is a two-year term insurance policy funded by a single premium at the start of the first year. Death claims are paid at the end of the year in which death occurs. A portion of the appropriate mortality table is shown below. The first […]
Date: September 19th, 2020
According the 2001 CSO mortality table, the yearly probability of dying for a 40 year-old man is .00165. The present value of $1 one year from today, assuming a 5.5 percent interest rate, is .9479. What is the net single premium per $1,000 for a one-year term insurance policy sold to a man at age […]
Date: September 19th, 2020
The net single premium for a life insurance policy is A) the premium the insurer charges to cover the death benefit and the insurer’s expenses. B) the future value of the future death benefit. C) the present value of the future death benefit. D) the face value of the policy discounted back for the number […]
Date: September 19th, 2020
Which statement is true regarding using interest-adjusted cost data and purchasing life insurance? A) Cost indices can help to determine whether a policy should be replaced. B) The type of policy you purchase should he based solely on a cost index. C) Small variations in cost indices should be ignored. D) Cost indices should be […]
Date: September 19th, 2020
Carl and Carol Williams, a married couple, are doing some estate planning. Upon his death, Carl plans to leave $1,000,000 in property to his wife. This amount will reduce the value of Carl’s gross estate and will be taxed later when Carol dies. This reduction of the gross estate is called the A) unified tax […]
Date: September 19th, 2020
Actuaries at Term Life Insurance Company calculated the net single premium per thousand for a five-year term policy for a man age 32 to be $5.04. To calculate the net level premium for this policy, the net single premium should be A) divided by 5. B) divided by the future value life annuity due factor […]
Date: September 19th, 2020
