Washington Insurance Licensing Exam Prep -
Study Guide and Review
Washington Exam Prep
Review Material
December 2025
PSI
,Congratulations! You’re here to start an exciting new journey that has the potential to
change your family’s future!
You took the first step when you joined Primerica. Now, you’re here to take the next step:
becoming life licensed. Your life license is real, tangible evidence of your desire to make a
difference. Having this license gives you a shot at not only creating financial freedom for your
family, but it also gives you the chance to change a lot of lives.
As you’re going through pre-licensing, I encourage you to think about why you’re doing this.
Maybe you’re here because you want some extra money each month to pay down debt or to
boost your savings. Maybe you want to be able to give your kids the things you never had as a
child. Maybe you want to make sure no family is left unprotected in the event of the death of a
breadwinner.
Whatever your reason for starting this journey, let that be your motivation for passing the
exam. Remember, in this business YOU are in control of your future. I believe if you put your
mind to it, put in the work and take advantage of the incredible support your upline, Licensing
Coach and POL provide, you CAN pass your exam.
Don’t worry if it’s been a while since you’ve been in school. We’re going to teach you exactly
what you’ll need in order to get your license and to start making your dreams happen. The rest
is up to you.
I believe you’ve got this! Let’s get started!
Glenn Williams
CEO, Primerica
, Table of Contents
I. General Insurance…………………………………………………...... 5
Contracts……………………………………………………………. 9
II. Life Insurance Basics…………………………………………………. 11
Underwriting………………………………………………………... 13
III. Life Insurance Policies………………………………………………... 19
IV. Policy Provisions, Riders, and Options…………….……………….. 25
Provisions…………………………………………………………... 26
Riders……………………………………………………………….. 30
Options……………………………………………………………… 32
V. Annuities………………………………………………………………... 35
VI. Federal Tax Considerations for Life Insurance ..………………….. 41
VII. Washington Laws, Rules, and Regulations………………………… 45
Review Question Answer Key.………………………………………. 61
, I. General Insurance
Insurance Concepts and Key Terms
Insurance • Based on the spreading of risk (risk pooling) and the law of large numbers
• Insurance transfers risk from an individual or group to a company
Risk Uncertainty regarding financial loss:
• Pure Risk - insurable because it involves a chance of loss only
• Speculative Risk - not insurable because it involves a chance of loss or
gain, i.e., gambling
Hazard Gives rise to a peril. There are three kinds of hazards:
• Physical - physical condition: medical history, blindness, deafness
• Moral - a lie: filing a false claim or a lie on an application
• Morale - an indifference to loss: driving recklessly, speeding
Peril The cause of a loss: fire, accident, flood
Loss A reduction in the quantity, quality, or value of something
Methods of S.T.A.R.R
Handling Risk • Sharing - distributing risk among a similar group (condo owners)
• Transfer - the loss is handled by another party. This is the most effective
way of handling risk. (Example, buy insurance)
• Avoidance - simply avoiding the risk (choose not to fly)
• Reduction - lessen the possibility of loss, (install a smoke alarm)
• Retention - accepting the risk and confronting it when it occurs (selfinsured)
Elements of 1. Due to chance- chance of loss beyond insured’s control
Insurable Risk 2. Must be definite and measurable- loss must have definite time, place, and
amount
3. Must be predictable- number of losses must be statistically predictable
4. Loss cannot be catastrophic- there must be limits that the loss cannot
exceed.
5. Exposure must be large- insurer must be able to predict losses based on
the law of large numbers
6. Exposure must be randomly selected- insurer must have a fair proportion
of both good and poor risks
Insurers
Stock • Owned by stockholders (shareholders)
• Issue nonparticipating policies (nonpar)
Mutual • Owned by policyowners (policyholders)
• Issue participating policies (par)
• Pay dividends to policyholders which are a refund of excess premiums paid
Fraternal Benefit • Not for profit organization
Societies • Benevolent and charitable brotherhood
(Fraternals) • Membership based on religious, national, or ethnic lines
• Must be a member to receive benefits
Study Guide and Review
Washington Exam Prep
Review Material
December 2025
PSI
,Congratulations! You’re here to start an exciting new journey that has the potential to
change your family’s future!
You took the first step when you joined Primerica. Now, you’re here to take the next step:
becoming life licensed. Your life license is real, tangible evidence of your desire to make a
difference. Having this license gives you a shot at not only creating financial freedom for your
family, but it also gives you the chance to change a lot of lives.
As you’re going through pre-licensing, I encourage you to think about why you’re doing this.
Maybe you’re here because you want some extra money each month to pay down debt or to
boost your savings. Maybe you want to be able to give your kids the things you never had as a
child. Maybe you want to make sure no family is left unprotected in the event of the death of a
breadwinner.
Whatever your reason for starting this journey, let that be your motivation for passing the
exam. Remember, in this business YOU are in control of your future. I believe if you put your
mind to it, put in the work and take advantage of the incredible support your upline, Licensing
Coach and POL provide, you CAN pass your exam.
Don’t worry if it’s been a while since you’ve been in school. We’re going to teach you exactly
what you’ll need in order to get your license and to start making your dreams happen. The rest
is up to you.
I believe you’ve got this! Let’s get started!
Glenn Williams
CEO, Primerica
, Table of Contents
I. General Insurance…………………………………………………...... 5
Contracts……………………………………………………………. 9
II. Life Insurance Basics…………………………………………………. 11
Underwriting………………………………………………………... 13
III. Life Insurance Policies………………………………………………... 19
IV. Policy Provisions, Riders, and Options…………….……………….. 25
Provisions…………………………………………………………... 26
Riders……………………………………………………………….. 30
Options……………………………………………………………… 32
V. Annuities………………………………………………………………... 35
VI. Federal Tax Considerations for Life Insurance ..………………….. 41
VII. Washington Laws, Rules, and Regulations………………………… 45
Review Question Answer Key.………………………………………. 61
, I. General Insurance
Insurance Concepts and Key Terms
Insurance • Based on the spreading of risk (risk pooling) and the law of large numbers
• Insurance transfers risk from an individual or group to a company
Risk Uncertainty regarding financial loss:
• Pure Risk - insurable because it involves a chance of loss only
• Speculative Risk - not insurable because it involves a chance of loss or
gain, i.e., gambling
Hazard Gives rise to a peril. There are three kinds of hazards:
• Physical - physical condition: medical history, blindness, deafness
• Moral - a lie: filing a false claim or a lie on an application
• Morale - an indifference to loss: driving recklessly, speeding
Peril The cause of a loss: fire, accident, flood
Loss A reduction in the quantity, quality, or value of something
Methods of S.T.A.R.R
Handling Risk • Sharing - distributing risk among a similar group (condo owners)
• Transfer - the loss is handled by another party. This is the most effective
way of handling risk. (Example, buy insurance)
• Avoidance - simply avoiding the risk (choose not to fly)
• Reduction - lessen the possibility of loss, (install a smoke alarm)
• Retention - accepting the risk and confronting it when it occurs (selfinsured)
Elements of 1. Due to chance- chance of loss beyond insured’s control
Insurable Risk 2. Must be definite and measurable- loss must have definite time, place, and
amount
3. Must be predictable- number of losses must be statistically predictable
4. Loss cannot be catastrophic- there must be limits that the loss cannot
exceed.
5. Exposure must be large- insurer must be able to predict losses based on
the law of large numbers
6. Exposure must be randomly selected- insurer must have a fair proportion
of both good and poor risks
Insurers
Stock • Owned by stockholders (shareholders)
• Issue nonparticipating policies (nonpar)
Mutual • Owned by policyowners (policyholders)
• Issue participating policies (par)
• Pay dividends to policyholders which are a refund of excess premiums paid
Fraternal Benefit • Not for profit organization
Societies • Benevolent and charitable brotherhood
(Fraternals) • Membership based on religious, national, or ethnic lines
• Must be a member to receive benefits
