Primerica Life Insurance Study Guide 2021/2022 SCORE AN 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 If Tom's policy allows him to make periodic additions to the face amount at standard rates, without proving instability, his policy includes a a. Conversion option b. Non forfeiture option c. Guaranteed insurability option d. Guaranteed renewable option The paid-up addition option uses the dividend a. to accumulate additional savings for retirement b. to purchase a smaller amount of the same type of insurance as the original policy c. to purchase a one-year term insurance in the amount of the cash value d. to reduce the next year's premium 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 All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT: 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. 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 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 c. key person d. a fraternal association 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? 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 Which of the following applicants could the insurer charge a higher rate and not be charge with unfair discrimination? 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 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? 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 An employee will be taxed on the cost of group life insurance paid by the employer if the amount of coverage exceeds a. $10,000 b. $15,000 c. $25,000 d. $50,000 Which of the following would NOT fall into the category of costs associated with death? a. final medical expenses of the insured b. day to day expenses of maintaining the family c. the expense of a vacation for surviving family members d. funeral expenses Based on Human Life Value Approach, which of the following is NOT used to calculate an individual's life value? a. effect of inflation on income over time b. predicted needs of the family after the insured's death c. insured's current and future income d. insured's annual expenses. Who makes up the Medical Information Bureau? Upon policy delivery, the agent may be required to obtain any of the following EXCEPT a. payment of premium b. corrected and resigned application c. signed waiver of premium d. statement of good health Amy's insurance premium has decreased slightly, despite the fact that her level of health has remained the same. Which of the following most likely caused the premium decrease? a. she has a Steadily Decreasing Premium policy b. the insurer's customer base is expanding, which allows for lower premiums c. her insurer used interest earned on premiums to lower premium amounts d. her increased age allows for lower premiums Who is the owner of the policy and who pays the premium in and Executive Bonus plan? a. company is the owner, but the executive pays the premium b. board of directors is the owner, and the board of directors pays the premium c. company is the owner, and the company pays the premium d. executive is the owner, and the executive pays the premium What is the major difference between a Stock Redemption Plan and a Cross Purchase Plan? What is the purpose of the buyer's guide? An insured has been diagnosed with a life-threatening disease, and is given approximately six months to live. The insured is in a hard financial situation which will worsen with the upcoming medical expenses. Which of the following options could he utilize right now? a. liquidity b. surrender c. change of beneficiary d. viatical settlement An applicant is seeking an insurance policy. In the underwriting process, it was determined that the applicant has some dangerous habits, a risky occupation, and poor health. Which of the following is TRUE concerning the policy premium? a. it will likely be higher because the applicant is a substandard risk b. it will likely be the average premium issued to standard risks c. the applicant's habits, occupation and health do not affect the premiums d. it will likely be lower because the applicant is preferred risk Which is the primary source of information used for insurance underwriting? a. applicant interview b. medical records c. private investigations d. application Two equal partners in a business worth $150,000 are using a Cross Purchase plan to protect against the death of each other. Which of the following statements would be correct? a. partner B buys a policy on partner A in the amount of $75,000 naming Partner A as beneficiary. b. partner A buys a policy on partner B in the amount of $150,000 naming Partner A as beneficiary. c. partner B buys a policy on partner A in the amount of $150,000 naming Partner A as beneficiary. d. partner A buys a policy on partner B in the amount of $75,000 naming Partner A as beneficiary. What is the name of the insured who enters into a viatical settlement? a. contingent b. viatical broker c. viator d. third party Which government program allows a blackout period? If an applicant for a lief insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about a. which individual will pay the premium b. whether an insurable interest exists between the individuals c. the gender of the applicant d. the type of policy requested Which of the following best describes the MIB?