course5_1100 - November 2000 Society of Actuaries COURSE 5...

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November 2000 Society of Actuaries COURSE 5 MORNING SESSION APPLICATION OF BASIC ACTUARIAL PRINCIPLES SECTION A—WRITTEN ANSWER
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COURSE 5: November 2000 - 2 - GO TO NEXT PAGE Morning Session ** BEGINNING OF EXAMINATION 5 ** MORNING SESSION 1. (5 points) (a) With respect to Group Accidental Death and Dismemberment insurance, describe the different types of coverage and outline typical plan provisions. (b) With respect to Group Long Term Disability insurance, outline the definitions of disability and describe typical limitations and exclusions. 2. (9 points) ABC.Life.com will market individual life insurance exclusively through the internet. The company will offer two products: (i) 10-year level term life insurance; and (ii) flexible premium universal life insurance. (a) Describe pricing strategies which could be used by ABC.Life.com. (b) Explain the sensitivity and scenario testing that should be performed before launching these products. (c) Outline pricing pitfalls commonly encountered when pricing insurance products.
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