Determine which of the following statements is NOT true with regard to underwriting.

• Life insurance policies are typically underwritten to prevent adverse selection.
• The distribution method affects the level of underwriting.
• Single premium immediate annuities are typically underwritten to prevent adverse selection.
• Underwriting may result in an insured life being classified as a rated life due to the insured's occupation or hobby.
• A pure endowment does not need to be underwritten to prevent adverse selection.

Over the last 30 years, life insurance products and the management of the associated risks have radically changed and become more complex.

Determine which of the following is NOT a reason for this change.

• More sophisticated policyholders.
• More competition among life insurance companies.
• More computational power.
• More complex risk management techniques.
• Separation of the savings elements and the protection elements of life insurance products.

A company offers a modern insurance contract that has the following features:

• A benefit linked to the performance of an investment fund
• A guaranteed minimum return on the premiums paid
• A guaranteed minimum death benefit payable if the insured dies before the contract matures
• A contract term of 7 years

Determine the type of contract offered.

• Term life insurance
• Universal life insurance
• Variable annuity
• Endowment insurance
• Reversionary annuity

A self-employed small business owner purchased an insurance contract that will pay a benefit equal to [math]70 \%[/math] of salary in the event that the owner becomes sick and cannot work. The contract will cease at retirement age.

Determine which of the following contracts provides these benefits.

• Term life insurance
• Disability income insurance
• Long-term care insurance
• Single premium immediate annuity
• Critical illness insurance