PRIMERICA LIFE INSURANCE EXAM WITH 100% CORRECT ANSWERS 2026/ 2027

PRIMERICA LIFE INSURANCE EXAM ht ht ht




An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the
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insurance company that was not taxable. This year, she did not receive a check from the insurer.
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From what type of insurer did the insured purchase the policy?
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A. Mutual
B. Reciprocal
C. Nonprofit service organization ht ht



D. Stock
The answer is: A. Mutual
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Funds not paid out after paying claims and other operating costs are returned to the policy owners in
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the form of a dividend. If all funds are paid out, no dividends are paid
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Following a career change, an insured is no longer required to perform many physical activities, so he
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has implemented a program where he walks and jogs for 45 minutes each morning. The insured has
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also
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eliminated most fatty foods from his diet. Which method of dealing with risk does this
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scenario describe?
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A. Retention
B. Reduction
C. Transfer
D. Avoidance
The answer is: B. Reduction
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The insured's change in lifestyle and habits would likely reduce the chances of health problems
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ht In insurance, an offer is usually made when
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A. An applicant submits an application to the insurer
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B. The insurer approves the application and receives the initial premium
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C. The agent hands the policy to the policyholder
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D. An agent explains a policy to a potential applicant
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The answer is: A. An applicant submits an application to the insurer
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In insurance, the offer is usually made by the applicant in the form of an application. Acceptance takes
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place when an insurer's underwriter approves the application and issues a policy
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The causes of loss insured against in an insurance policy are known as
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A. Perils
B. Losses
C. Risks
D. Hazards
The answer is: A. Perils
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NURSINGENIUS 1

,Perils are the causes of loss insured against in an insurance policy
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ht What documentation grants express authority to an agent?
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A. Agents contract with the principal ht ht ht ht



B. Agents insurance license ht ht



C. Fiduciary contract ht



D. State provisions ht



The answer is: A. Agents contract with the principal
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The principal grants authority to an agent through the agent's contract
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Which of the following best describes an insurance company that has been formed under the laws of this
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state?
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A. Domestic
B. Sovereign
C. Alien
D. Foreign
The answer is: A. Domestic
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A company is domestic when doing business within the state in which it is incorporated
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Which of the following factors is NOT considered by an underwriter when determining the premium
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rates for an individual seeking insurance?
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A. Medical history ht



B. Sex
C. Age
D. Race
The answer is: D. Race
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Age, medical history, and sex provide sound statistical date for determining the probability of loss.
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Race, religion, sexual orientation, etc. Are the factors that cannot be used because there is not sound
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statistical data to show that they effect the probability of loss; therefore, they are considered to be
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discriminatory
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In insurance transactions, fiduciary responsibility means
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A. Handling insurer funds in a trust capacity ht ht ht ht ht ht



B. Maintaining good credit record ht ht ht



C. Being liable with respect to payment of claims
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D. Commingling premiums with agents personal funds ht ht ht ht ht



The answer is: A. Handling insurer funds in a trust capacity
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An agents fiduciary responsibility includes handling insurer funds in a trust capacity
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ht The authority granted to an agent through the agent's contract is referred to as
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NURSINGENIUS 2

,A. Absolute authority ht



B. Express authority ht



C. Apparent authority ht



D. Implied authority ht



The answer is: B. Express authority
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Express powers are written into the contract between the insurer and the agent
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Insurance policies are not drawn up though negotiations, and an insured has little to say about its
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provisions. What contract characteristic does this describe?
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A. Unilateral
B. Conditional
C. Personal
D. Adhesion
The answer is: D. Adhesion
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A contract of adhesion is prepared by only the insurer; the insured's only option is to accept or reject the
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policy as its written
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Which of the following insurers are owned by stockholders who have the usual rights of ownership,
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including the right of voting?
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A. Reciprocal
B. Fraternal
C. Stock
D. Mutual
The answer is: C. Stock
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Only stock insurance companies are owned and controlled by stockholders
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Which of the following best describes the concept that the insured pays a small amount of premium
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for a large amount of risk on the part of the insurance company?
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A. Subrogation
B. Warranty
C. Aleatory
D. Adhesion
The answer is: C. Aleatory
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An insurance contract is an aleatory contract in that it requires a relatively small amount of premium
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for a large risk
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When an insured makes truthful statements on the application for insurance and pays the required
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premium, it is known as which of the following?
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NURSINGENIUS 3

, A. Legal purpose ht



B. Contract of adhesion ht ht



C. Acceptance
D. Consideration
The answer is: D. Consideration
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Consideration is something of value that each party gives to the other. The consideration on the part of
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the insured is the payment of premium and the representations made in the application
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Which of the following would qualify as a competent party in an insurance contract?
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A. The applicant is intoxicated at the time of application
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B. The applicant is 12 year old student
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C. The applicant is under the influence of a mind-impairing medication at the time of application
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D. The applicant has a prior felony conviction
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The answer is: D. The applicant has a prior felony conviction
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When an insurer and insured enter into a contract, both parties must be legal of age and mentally
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competent. It is legal for a person convicted of a felony to buy an insurance contract. An intoxicated
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person, however, may not be mentally competent, a 12 year old student is considered to be underage
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in most states and a person under mind-impairing medication most likely would not be mentally
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competent
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An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the
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following insurance principles has the insurer violated?
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A. Representation
B. Adhesion
C. Consideration
D. Good health ht



The answer is: C. Consideration
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The binding force in any contract is consideration. Consideration on the part of the insureds the
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payment of premiums and the health representations made in the application. Consideration on the
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part of the insurer is the promise to pay in the even of loss
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Which of the following is a primary source of information used for insurance underwriting?
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A. Application
B. Applicant interviews ht



C. Medical records. ht



D. Private investigations ht



The answer is: A. Application
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The application contains most of the information used for underwriting purposes. This is why its
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completeness and accurarcy are so critical
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NURSINGENIUS 4