PRIMERICA LIFE INSURANCE EXAM/ 190 ACTUAL EXAM
QUESTIONS /VERIFIED ANSWERS/LATEST 2024
1. 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: A. 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
2. 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?
a. retention
b. reduction
c. transfer
d. avoidance: B. reduction
the insured's change in lifestyle and habits would likely reduce the chances of health
problems
3. 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: A. 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
4. the causes of loss insured against in an insurance policy are known as
,a. perils
b. losses
c. risks
d. hazards: A. perils
perils are the causes of loss insured against in an insurance policy
5. what documentation grants express authority to an agent?
a. agents contract with the principal
b. agents insurance license
c. fiduciary contract
d. state provisions: A. agents contract with the principal
the principal grants authority to an agent through the agent's contract
6. 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: A. domestic
a company is domestic when doing business within the state in which it is incorporated
7. 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: D. race
age, medical history, and sex provide sound statistical date for determining the
probability of loss. Race, religion, sexual orientation, etc. are the factors that cannot be
used because there is not sound statistical data to show that they effect the probability
of loss; therefore, they are considered to be discriminatory
8. in insurance transactions, fiduciary responsibility means
a. handling insurer funds in a trust capacity
,b. maintaining good credit record
c. being liable with respect to payment of claims
d. commingling premiums with agents personal funds: A. handling insurer funds in a
trust capacity an agents fiduciary responsibility includes handling insurer funds in a
trust capacity
9. the authority granted to an agent through the agent's contract is referred to as
a. absolute authority
b. express authority
c. apparent authority
d. implied authority: B. express authority
express powers are written into the contract between the insurer and the agent
10. insurance policies are not drawn up though negotiations, and an insured
has little to say about its provisions. what contract characteristic does this
describe?
a. unilateral
b. conditional
c. personal
d. adhesion: D. adhesion
a contract of adhesion is prepared by only the insurer; the insured's only option is to
accept or reject the policy as its written
11. which of the following insurers are owned by stockholders who have the
usual rights of ownership, including the right of voting?
a. reciprocal
b. fraternal
c. stock
d. mutual: C. stock
only stock insurance companies are owned and controlled by stockholders
12. which of the following best describes the concept that the insured pays a
small amount of premium for a large amount of risk on the part of the insurance
company?
a. subrogation
, b. warranty
c. aleatory
d. adhesion: C. aleatory
an insurance contract is an aleatory contract in that it requires a relatively small amount
of premium for a large risk
13. When an insured makes truthful statements on the application for insurance
and pays the required premium, it is known as which of the following?
a. legal purpose
b. contract of adhesion
c. acceptance
d. consideration: D. consideration
consideration is something of value that each party gives to the other. The
consideration on the part of the insured is the payment of premium and the
representations made in the application
14. which of the following would qualify as a competent party in an insurance
contract?
a. the applicant is intoxicated at the time of application
b. the applicant is 12 year old student
c. the applicant is under the influence of a mind-impairing medication at the time of
application
d. the applicant has a prior felony conviction: D. the applicant has a prior felony
conviction
when an insurer and insured enter into a contract, both parties must be legal of age
and mentally competent. It is legal for a person convicted of a felony to buy an
insurance contract. An intoxicated person, however, may not be mentally competent, a
12 year old student is considered to be underage in most states and a person under
mind-impairing medication most likely would not be mentally competent
15. an insurer neglects to pay a legitimate claim that is covered under the terms
of the policy. Which of the following insurance principles has the insurer
violated?
a. representation
b. adhesion
c. consideration
d. good health: C. consideration
QUESTIONS /VERIFIED ANSWERS/LATEST 2024
1. 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: A. 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
2. 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?
a. retention
b. reduction
c. transfer
d. avoidance: B. reduction
the insured's change in lifestyle and habits would likely reduce the chances of health
problems
3. 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: A. 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
4. the causes of loss insured against in an insurance policy are known as
,a. perils
b. losses
c. risks
d. hazards: A. perils
perils are the causes of loss insured against in an insurance policy
5. what documentation grants express authority to an agent?
a. agents contract with the principal
b. agents insurance license
c. fiduciary contract
d. state provisions: A. agents contract with the principal
the principal grants authority to an agent through the agent's contract
6. 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: A. domestic
a company is domestic when doing business within the state in which it is incorporated
7. 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: D. race
age, medical history, and sex provide sound statistical date for determining the
probability of loss. Race, religion, sexual orientation, etc. are the factors that cannot be
used because there is not sound statistical data to show that they effect the probability
of loss; therefore, they are considered to be discriminatory
8. in insurance transactions, fiduciary responsibility means
a. handling insurer funds in a trust capacity
,b. maintaining good credit record
c. being liable with respect to payment of claims
d. commingling premiums with agents personal funds: A. handling insurer funds in a
trust capacity an agents fiduciary responsibility includes handling insurer funds in a
trust capacity
9. the authority granted to an agent through the agent's contract is referred to as
a. absolute authority
b. express authority
c. apparent authority
d. implied authority: B. express authority
express powers are written into the contract between the insurer and the agent
10. insurance policies are not drawn up though negotiations, and an insured
has little to say about its provisions. what contract characteristic does this
describe?
a. unilateral
b. conditional
c. personal
d. adhesion: D. adhesion
a contract of adhesion is prepared by only the insurer; the insured's only option is to
accept or reject the policy as its written
11. which of the following insurers are owned by stockholders who have the
usual rights of ownership, including the right of voting?
a. reciprocal
b. fraternal
c. stock
d. mutual: C. stock
only stock insurance companies are owned and controlled by stockholders
12. which of the following best describes the concept that the insured pays a
small amount of premium for a large amount of risk on the part of the insurance
company?
a. subrogation
, b. warranty
c. aleatory
d. adhesion: C. aleatory
an insurance contract is an aleatory contract in that it requires a relatively small amount
of premium for a large risk
13. When an insured makes truthful statements on the application for insurance
and pays the required premium, it is known as which of the following?
a. legal purpose
b. contract of adhesion
c. acceptance
d. consideration: D. consideration
consideration is something of value that each party gives to the other. The
consideration on the part of the insured is the payment of premium and the
representations made in the application
14. which of the following would qualify as a competent party in an insurance
contract?
a. the applicant is intoxicated at the time of application
b. the applicant is 12 year old student
c. the applicant is under the influence of a mind-impairing medication at the time of
application
d. the applicant has a prior felony conviction: D. the applicant has a prior felony
conviction
when an insurer and insured enter into a contract, both parties must be legal of age
and mentally competent. It is legal for a person convicted of a felony to buy an
insurance contract. An intoxicated person, however, may not be mentally competent, a
12 year old student is considered to be underage in most states and a person under
mind-impairing medication most likely would not be mentally competent
15. an insurer neglects to pay a legitimate claim that is covered under the terms
of the policy. Which of the following insurance principles has the insurer
violated?
a. representation
b. adhesion
c. consideration
d. good health: C. consideration
