Primerica Life Insurance Exam
Questions and Answers Already Passed
An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check
from the insurance company that was not taxable. This year, she did not receive a check from the
insurer. From what type of insurer did the insured purchase the policy?
a. mutual
b. reciprocal
c. nonprofit service organization
d. stock \u2714\u2714A. mutual
funds not paid out after paying claims and other operating costs are returned to the policy owners
in the form of a dividend. if all funds are paid out, no dividends are paid
Following a career change, an insured is no longer required to perform many physical activities,
so he has implemented a program where he walks and jogs for 45 minutes each morning. The
insured has also eliminated most fatty foods from his diet. Which method of dealing with risk
does this scenario describe?<\/p>\n\n\n\n
a. retention
b. reduction
c. transfer
d. avoidance \u2714\u2714B. reduction
the insured’s change in lifestyle and habits would likely reduce the chances of health problems
In insurance, an offer is usually made when
a. an applicant submits an application to the insurer
b. the insurer approves the application and receives the initial premium
c. the agent hands the policy to the policyholder
d. an agent explains a policy to a potential applicant \u2714\u2714A. an applicant submits an application to
the insurer
in insurance, the offer is usually made by the applicant in the form of an application. acceptance
takes place when an insurer’s underwriter approves the application and issues a policy
the causes of loss insured against in an insurance policy are known as<\/p>\n\n\n\n
a. perils
b. losses
c. risks
d. hazards \u2714\u2714A. perils
perils are the causes of loss insured against in an insurance policy
what documentation grants express authority to an agent?
a. agents contract with the principal
b. agents insurance license
c. fiduciary contract
d. state provisions \u2714\u2714A. agents contract with the principal
the principal grants authority to an agent through the agent’s contract<\/p>\n\n\n\n
which of the following best describes an insurance company that has been formed under the laws
of this state?
a. domestic
b. sovereign
c. alien
d. foreign \u2714\u2714A. domestic
a company is domestic when doing business within the state in which it is incorporated
which of the following factors is NOT considered by an underwriter when determining the
premium rates for an individual seeking insurance?
a. medical history
b. sex
c. age
d. race \u2714\u2714D. race<\/p>\n\n\n\n
Primerica Practice Test Questions and
Answers 100% Pass
The receipt given to a life insurance applicant when the application is completed and the initial
premium is received is called a(n) \u2714\u2714conditional receipt
Statements in the application for insurance that are believed to be true to the best of the
applicant’s knowledge are called \u2714\u2714representations
An annuity is considered fixed when it does all of the following EXCEPT \u2714\u2714provides the
annuitant with an interest rate that is the lesser of the guaranteed or current rate
The most common type of whole life insurance where premiums are payable over the whole life
of the insured to age 100 is called \u2714\u2714continuous premium (straight) life
The policy and a copy of the application, along with any riders and amendments, is called the
\u2714\u2714entire contract
Money borrowed from the policy’s cash value is \u2714\u2714not taxable<\/p>\n\n\n\n
Which of the following annuity products requires an agent to hold a securities license?
\u2714\u2714variable annuities
Which type of annuity settlement stops when the annuitant dies? \u2714\u2714life income annuity
At what age can a participant receive distributions from a qualified plan without incurring a 10%
penalty? \u2714\u271459.5
Which settlement option guarantees an income for 2 or more recipients for as long as they live
\u2714\u2714joint and survivor
Two business partners own life insurance on each other. If one partner dies, which of the
following contracts will allow the surviving partner to use the death benefit to purchase the
deceased’s business interests? \u2714\u2714buy-sell agreement
Which of the following would be considered a flexible premium policy? \u2714\u2714universal life<\/p>\n\n\n\n
Primerica life insurance state exam
questions and answers graded A+
Deferred Annuity \u2714\u2714An annuity in which the income payments begin sometime after one year
from the date of purchase.deferred annuities can be funded with a single lump sum payment so it
is referred to as a single premium differed annuities.
Human life values approach \u2714\u2714Calculates an individual’s life value by looking at the insureds
future wages,inflation,the number of years to retirement,and the time value of money.
What time must the producer present the applicant with a notice regarding replacement of life
insurance \u2714\u2714Producers must present to the applicant a notice regarding replacement that is
signed by both the applicant and the producer. A copy must be left with the applicant.
Risk \u2714\u2714Is the uncertainty or chance of a loss occurring.
MIB (medical information bureau \u2714\u2714MIB is a non profit trade organization which receives
adverse medical information from insurance companies and maintains confidential medical
impairment information on individuals
<\/p>\n\n\n\n
Primerica Life Insurance Questions and
Answers 100% Pass
Risk \u2714\u2714uncertainty of a financial loss; 2 types
Two typed of risks \u2714\u2714Pure (Insurable) and speculative (uninsurable)
Benefits of purchasing insurance? \u2714\u2714You get to transfer financial risk left after passing to
insurance company
Law of large numbers \u2714\u2714the larger the size of the group the more accurately the experience aka
predicted losses of that group can be predicted
Policyowner \u2714\u2714person who owns policy, pays premiums, and chooses the beneficiary
Insured \u2714\u2714the life of the person the policy covers (could be policyowner)
Insurer \u2714\u2714the insurance company which issues the policy and pays the death benefit to the
beneficiary upon the death of the insured<\/p>\n\n\n\n
Beneficiary \u2714\u2714the person who receives death proceeds
What does having life insurance create or do? \u2714\u2714Creates an immediate estate for the beneficiary
which could help pay for daily expenses, mortgage, or college etc
Estate \u2714\u2714the net worth of a person; things you own minus things you owe
Premium \u2714\u2714the amount you pay for coverage aka the money that goes into the policy; money
policy owner pays to insurer
Proceeds \u2714\u2714the money that is paid out (protection) when the insurer dies; money insurer pays to
beneficiary upon insureds death
Synonyms\/ other names for proceeds \u2714\u2714Coverage
insurance amount
face amount
death benefit<\/p>\n\n\n\n
Primerica Practice test part 1 with
Certified Solutions
An insured under a life insurance policy has been diagnosed with a terminal illness and has 6
months to live. The insured knows that his financial state will worsen even more with the
upcoming medical expenses. What option could the insured utilize?
a) Estate liquidation
b) Nonpayment of premium
c) Change of beneficiary
d) Viatical settlement \u2714\u2714d
Which of the following best describes fixed-period settlement option?
a) Only the principal amount will be paid out within a specified period of time.
b) The death benefit must be paid out in a lump sum within a certain time period.
c) Income is guaranteed for the life of the beneficiary.
d) Both the principal and interest will be liquidated over a selected period of time. \u2714\u2714d
Which of the following is a generic consumer publication that explains life insurance in general
terms in order to assist the applicant in the decision-making process?<\/p>\n\n\n\n
a) Insurance Index
b) Policy Summary
c) Illustrations
d) Buyer’s Guide \u2714\u2714d
Which of the following is called a “second-to-die” policy?
a) Juvenile life
b) Joint life
c) Survivorship life
d) Family income \u2714\u2714c
Which of the following best describes annually renewable term insurance?
a) Neither the premium nor the death benefit is affected by the insured’s age.
b) It provides an annually increasing death benefit.
c) It is level term insurance.
d) It requires proof of insurability at each renewal. \u2714\u2714c
Which of the following best describes annually renewable term insurance?<\/p>\n\n\n\n
Primerica Life Insurance Questions and
Answers with Certified Solutions
401 k plan \u2714\u2714A qualified retirement plan in which the
employee can set aside a portion of their income
with pre-tax dollars.
Absolute Assignment v. Collateral
Assignment \u2714\u2714Absolute: A permanent and irrevocable transfer
of rights and\/or benefits by the policyowner.
Collateral: A temporary and\/or revocable transfer
of benefits by the policyowner.
Accelerated Death Benefit \u2714\u2714Policy provision that allows full or partial
payment of the policy’s death benefit before the
insured’s death if he\/she is terminally ill.
Accidental Death Benefit \u2714\u2714An extra cost rider that requires the insurance
company to pay an additional benefit in the event<\/p>\n\n\n\n
that the insured dies within 90 days of an
accident as a direct result of the accident.
Accumulate at Interest \u2714\u2714The Dividend Option where the policyowner
leaves the dividends with the insurer to invest
and earn interest.
Adhesion \u2714\u2714Since the insurer created all the documents of
the contract, any ambiguities in the contract will
be settled in favor of the insured. Since the
insurer wrote the contract they are stuck with it.
Adverse Selection \u2714\u2714The tendency for less favorable risks to seek or
continue insurance to a greater extent than more
favorable risks.
Agency Agreement or Agency Contract \u2714\u2714A legal document containing the terms of the
agreement between the agent and the insurance<\/p>\n\n\n\n
company. It clearly defines what an agent can
and cannot do, and how he\/she will be
compensated.
Agent Authorities \u2714\u2714Expressed: Power or authority specifically
granted in writing to an agent by the insurance
company in their Agency Agreement. Apparent:
Power or authority that the public reasonably
assumes an agent has based upon his\/her
actions. Implied: Power or authority that is not
expressly granted by the company but that an
agent can assume or that are implied he\/she has
in order to transact insurance business.
Agent\/Producer \u2714\u2714Anyone who sells or aids in the selling of
insurance. Legally represents the company.
Cash Settlement Option \u2714\u2714Upon maturity of an insurance policy the<\/p>\n\n\n\n
Primerica Life Insurance Questions and
Answers with Certified Solutions
401 k plan \u2714\u2714A qualified retirement plan in which the
employee can set aside a portion of their income
with pre-tax dollars.
Absolute Assignment v. Collateral
Assignment \u2714\u2714Absolute: A permanent and irrevocable transfer
of rights and\/or benefits by the policyowner.
Collateral: A temporary and\/or revocable transfer
of benefits by the policyowner.
Accelerated Death Benefit \u2714\u2714Policy provision that allows full or partial
payment of the policy’s death benefit before the
insured’s death if he\/she is terminally ill.
Accidental Death Benefit \u2714\u2714An extra cost rider that requires the insurance
company to pay an additional benefit in the event<\/p>\n\n\n\n
that the insured dies within 90 days of an
accident as a direct result of the accident.
Accumulate at Interest \u2714\u2714The Dividend Option where the policyowner
leaves the dividends with the insurer to invest
and earn interest.
Adhesion \u2714\u2714Since the insurer created all the documents of
the contract, any ambiguities in the contract will
be settled in favor of the insured. Since the
insurer wrote the contract they are stuck with it.
Adverse Selection \u2714\u2714The tendency for less favorable risks to seek or
continue insurance to a greater extent than more
favorable risks.
Agency Agreement or Agency Contract \u2714\u2714A legal document containing the terms of the
agreement between the agent and the insurance<\/p>\n\n\n\n
company. It clearly defines what an agent can
and cannot do, and how he\/she will be
compensated.
Agent Authorities \u2714\u2714Expressed: Power or authority specifically
granted in writing to an agent by the insurance
company in their Agency Agreement. Apparent:
Power or authority that the public reasonably
assumes an agent has based upon his\/her
actions. Implied: Power or authority that is not
expressly granted by the company but that an
agent can assume or that are implied he\/she has
in order to transact insurance business.
Agent\/Producer \u2714\u2714Anyone who sells or aids in the selling of
insurance. Legally represents the company.
Cash Settlement Option \u2714\u2714Upon maturity of an insurance policy the<\/p>\n\n\n\n
Primerica Insurance Exam: General
Insurance Already Passed
Insurance \u2714\u2714A contract in which one party agrees to indemnify the insured party against loss,
damage or liability from an unknown event.
Insurance transfers \u2714\u2714The reduction, decrease, or disappearance of value of the person or
property insured in a policy, caused by a named peril.
Risk \u2714\u2714The uncertainty or chance of a loss occurring.
Pure risk \u2714\u2714Situations that can only result in a loss or no change
Speculative risk \u2714\u2714The opportunity for either loss loss or gain.
Hazards \u2714\u2714Conditions or situations that increase the probability of an insured loss occurring.
Physical hazards \u2714\u2714Individual characteristics that increase the chances of the cause of loss.<\/p>\n\n\n\n
Moral hazards \u2714\u2714Tendencies towards increased risk.
Morale hazards \u2714\u2714Arises from a state of mind that causes indifference to loss, such as
carlessness
Perils \u2714\u2714The causes of loss against in an insurance policy
Exposure \u2714\u2714The unit of measure used to determine rates charged for insurance coverage.
Factors: The age of the insured, insured medical history, occupation, and sex
Avoidance \u2714\u2714Eliminating exposure to a loss.
Retention \u2714\u2714The planned assumption of risk by an insured through the use of deductibles, copayments, or self-insurance.
Purpose: To reduce expenses and improve cash flow, to increase control of claim reserving and
claims settlement, to fund for losses that cannot be insured.<\/p>\n\n\n\n
Primerica-Life Insurance Questions and
Answers Already Graded A
Stranger-oriented life insurance policies are in direct opposition to the principle of
a. law of large numbers
b. good faith
c. indemnity
d. insurable interest \u2714\u2714d. insurable interest-STOLI purchaser doesn’t know the insured, or have
any interest in the insured’s longevity, so it violates the principle of insurable interest
Which is generally true regarding insureds who have earned preferred status?
a. they keep a higher percentage of any interest earned on their policies
b. their premiums are lower
c. they can barrow higher amounts off of their policies
d. they can decide when to pay their monthly premiums \u2714\u2714b. their premiums are lower- the
insured is in excellent physical condition and employs healthy lifestyles and habits
All of the following statements concerning the use of life insurance as an Executive Bonus are
correct EXCEPT:<\/p>\n\n\n\n
a. the employer pays a bonus to a selected employee to fund to policy
b. it is considered a non qualified employee benefit.
c. the policy is owned by the company
d. any type of insurance policy may be used. \u2714\u2714c. the policy is owned by the company.
An insured receives a monthly summary for his life insurance policy. He notices that the cash
value of the policy is significantly lower this month than it was last month. What type of policy
does the insured have?
a. variable
b. term
c. securities
d. stock \u2714\u2714a. variable- life policies vary in value, as the name suggests, because the value is
based on the stocks that support the policy. If a policyholder wants a more stable, reliable value,
he\/she should invest in a fixed policy.
When an employer offers to give an employee a wage increase in the amount of the premium on
a new life insurance policy, this is called
a. aleatory contract
b. executive bonus<\/p>\n\n\n\n
c. key person
d. a fraternal association \u2714\u2714b. executive bonus
In terms of Social Security, what is the interval spanning between the day when the youngest
child of a family turns 16 and before the surviving spouse may receive retirement benefits?
\u2714\u2714Blackout period- begins when the youngest child reaches the age of 16, and ends when the
surviving spouse qualifies for retirement benefits, as early as age 60. No benefits are paid during
this time.
Life insurance may be used to pay state inheritance taxes and federal estate taxes so that it is not
necessary to sell off assets from the estate to pay these costs. This is called
a. estate conservation
b. estate creation
c. survivor protection
d. survivorship insurnce \u2714\u2714a. estate conservation- life insurance may be used to pay state
inheritance taxes and federal estate taxes so that it is not necessary to sell off assets from the
estate to pay these costs. This is called estate conservation.
Which of the following applicants could the insurer charge a higher rate and not be charge with
unfair discrimination?<\/p>\n\n\n\n
a. an applicant that was born in another country
b. an applicant who is legally blind
c. an applicant who has been a victim of domestic abuse
d. an applicant that smokes cigarettes as opposed to one that does not \u2714\u2714d. an applicant that
smokes cigarettes as opposed to one that does not
Partner A in a business buys a life insurance policy on Partner B to protect herself against a
financial loss if he should die. Two years after the partnership is dissolved Partner B dies. Who
will receive the death benefit? \u2714\u2714Partner A
Which of the following is NOT a type of information that needs to be gathered in order to
determine the value of someone’s life when using the needs approach?
a. mortgages
b. expenses
c. estimated longevity
d. outstanding debt \u2714\u2714c. estimated longevity
An employee will be taxed on the cost of group life insurance paid by the employer if the amount
of coverage exceeds<\/p>\n","protected":false},"excerpt":{"rendered":"
Primerica Life Insurance ExamQuestions and Answers Already PassedAn insured purchased an insurance policy 5 years ago. Last year, she received a dividend checkfrom the insurance company that was not taxable. This year, she did not receive a check from theinsurer. From what type of insurer did the insured purchase the policy?a. mutualb. reciprocalc. nonprofit service […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-119842","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/119842","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=119842"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/119842\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=119842"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=119842"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=119842"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}