PRIMERICA LIFE INSURANC r r
E EXAM/194 QUESTIONS AND
r r r r
ANSWERS (A+) r
An insured purchased an insurance policy 5 years ago
r r r r r r r r
. Last year, she received a dividend check from the ins
r r r r r r r r r r
urance company that was not taxable. This year, she d
r r r r r r r r r
id not receive a check from the insurer. From what type
r r r r r r r r r r r
of insurer did the insured purchase the policy?
r r r r r r r
a. mutual
r
b. reciprocal
r
c. nonprofit service organization
r r r
d. stock - √Answer>A. mutual
r r r r
funds not paid out after paying claims and other operat
r r r r r r r r r
ing costs are returned to the policy owners in the form o
r r r r r r r r r r r
f a dividend. if all funds are paid out, no dividends are p
r r r r r r r r r r r r
aid
Quiz :Following a career change, an insured is no long
r r r r r r r r r
er required to perform many physical activities, so he h
r r r r r r r r r
as implemented a program where he walks and jogs fo
r r r r r r r r r
r 45 minutes each morning. The insured has also elimi
r r r r r r r r r
nated most fatty foods from his diet. Which method of d
r r r r r r r r r r
ealing with risk does this scenario describe?
r r r r r r
a. retention
r
,b. reduction
r
c. transfer
r
d. avoidance - √Answer>B. reduction
r r r r
the insured's change in lifestyle and habits would likel
r r r r r r r r
y reduce the chances of health problems
r r r r r r
Quiz :In insurance, an offer is usually made when
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a. an applicant submits an application to the insurer
r r r r r r r r
b. the insurer approves the application and receives th
r r r r r r r r
e initial premium
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c. the agent hands the policy to the policyholder
r r r r r r r r
d. an agent explains a policy to a potential applicant -
r r r r r r r r r r
√Answer>A. an applicant submits an application to th
r r r r r r r r
e insurer
r
in insurance, the offer is usually made by the applicant
r r r r r r r r r r
in the form of an application. acceptance takes place w
r r r r r r r r r
hen an insurer's underwriter approves the application
r r r r r r r
and issues a policy
r r r
Quiz :the causes of loss insured against in an insuranc
r r r r r r r r r
e policy are known as
r r r r
a. perils
r
b. losses
r
c. risksr
d. hazards - √Answer>A. perils
r r r r
,perils are the causes of loss insured against in an insur
r r r r r r r r r r
ance policy r
Quiz :what documentation grants express authority to
r r r r r r r
an agent? r
a. agents contract with the principal
r r r r r
b. agents insurance license
r r r
c. fiduciary contract
r r
d. state provisions -
r r r
√Answer>A. agents contract with the principal
r r r r r r
the principal grants authority to an agent through the a
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gent's contract r
Quiz :which of the following best describes an insuran
r r r r r r r r
ce company that has been formed under the laws of thi
r r r r r r r r r r
s state?
r
a. domestic
r
b. sovereign
r
c. alienr
d. foreign - √Answer>A. domestic
r r r r
a company is domestic when doing business within th
r r r r r r r r
e state in which it is incorporated
r r r r r r
Quiz :which of the following factors is NOT considered
r r r r r r r r r
by an underwriter when determining the premium rate
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s for an individual seeking insurance?
r r r r r
, a. medical history
r r
b. sex r
c. age r
d. race - √Answer>D. race
r r r r
age, medical history, and sex provide sound statistical
r r r r r r r
date for determining the probability of loss. Race, relig
r r r r r r r r r
ion, sexual orientation, etc. are the factors that cannot
r r r r r r r r r
be used because there is not sound statistical data to s
r r r r r r r r r r
how that they effect the probability of loss; therefore, th
r r r r r r r r r
ey are considered to be discriminatory
r r r r r
Quiz :in insurance transactions, fiduciary responsibilit
r r r r r
y means
r
a. handling insurer funds in a trust capacity
r r r r r r r
b. maintaining good credit record
r r r r
c. being liable with respect to payment of claims
r r r r r r r r
d. commingling premiums with agents personal funds
r r r r r r r
-
√Answer>A. handling insurer funds in a trust capacity
r r r r r r r r
an agents fiduciary responsibility includes handling in
r r r r r r
surer funds in a trust capacity r r r r r
Quiz :the authority granted to an agent through the ag
r r r r r r r r r
ent's contract is referred to as
r r r r r
a. absolute authority
r r
E EXAM/194 QUESTIONS AND
r r r r
ANSWERS (A+) r
An insured purchased an insurance policy 5 years ago
r r r r r r r r
. Last year, she received a dividend check from the ins
r r r r r r r r r r
urance company that was not taxable. This year, she d
r r r r r r r r r
id not receive a check from the insurer. From what type
r r r r r r r r r r r
of insurer did the insured purchase the policy?
r r r r r r r
a. mutual
r
b. reciprocal
r
c. nonprofit service organization
r r r
d. stock - √Answer>A. mutual
r r r r
funds not paid out after paying claims and other operat
r r r r r r r r r
ing costs are returned to the policy owners in the form o
r r r r r r r r r r r
f a dividend. if all funds are paid out, no dividends are p
r r r r r r r r r r r r
aid
Quiz :Following a career change, an insured is no long
r r r r r r r r r
er required to perform many physical activities, so he h
r r r r r r r r r
as implemented a program where he walks and jogs fo
r r r r r r r r r
r 45 minutes each morning. The insured has also elimi
r r r r r r r r r
nated most fatty foods from his diet. Which method of d
r r r r r r r r r r
ealing with risk does this scenario describe?
r r r r r r
a. retention
r
,b. reduction
r
c. transfer
r
d. avoidance - √Answer>B. reduction
r r r r
the insured's change in lifestyle and habits would likel
r r r r r r r r
y reduce the chances of health problems
r r r r r r
Quiz :In insurance, an offer is usually made when
r r r r r r r r
a. an applicant submits an application to the insurer
r r r r r r r r
b. the insurer approves the application and receives th
r r r r r r r r
e initial premium
r r
c. the agent hands the policy to the policyholder
r r r r r r r r
d. an agent explains a policy to a potential applicant -
r r r r r r r r r r
√Answer>A. an applicant submits an application to th
r r r r r r r r
e insurer
r
in insurance, the offer is usually made by the applicant
r r r r r r r r r r
in the form of an application. acceptance takes place w
r r r r r r r r r
hen an insurer's underwriter approves the application
r r r r r r r
and issues a policy
r r r
Quiz :the causes of loss insured against in an insuranc
r r r r r r r r r
e policy are known as
r r r r
a. perils
r
b. losses
r
c. risksr
d. hazards - √Answer>A. perils
r r r r
,perils are the causes of loss insured against in an insur
r r r r r r r r r r
ance policy r
Quiz :what documentation grants express authority to
r r r r r r r
an agent? r
a. agents contract with the principal
r r r r r
b. agents insurance license
r r r
c. fiduciary contract
r r
d. state provisions -
r r r
√Answer>A. agents contract with the principal
r r r r r r
the principal grants authority to an agent through the a
r r r r r r r r r
gent's contract r
Quiz :which of the following best describes an insuran
r r r r r r r r
ce company that has been formed under the laws of thi
r r r r r r r r r r
s state?
r
a. domestic
r
b. sovereign
r
c. alienr
d. foreign - √Answer>A. domestic
r r r r
a company is domestic when doing business within th
r r r r r r r r
e state in which it is incorporated
r r r r r r
Quiz :which of the following factors is NOT considered
r r r r r r r r r
by an underwriter when determining the premium rate
r r r r r r r
s for an individual seeking insurance?
r r r r r
, a. medical history
r r
b. sex r
c. age r
d. race - √Answer>D. race
r r r r
age, medical history, and sex provide sound statistical
r r r r r r r
date for determining the probability of loss. Race, relig
r r r r r r r r r
ion, sexual orientation, etc. are the factors that cannot
r r r r r r r r r
be used because there is not sound statistical data to s
r r r r r r r r r r
how that they effect the probability of loss; therefore, th
r r r r r r r r r
ey are considered to be discriminatory
r r r r r
Quiz :in insurance transactions, fiduciary responsibilit
r r r r r
y means
r
a. handling insurer funds in a trust capacity
r r r r r r r
b. maintaining good credit record
r r r r
c. being liable with respect to payment of claims
r r r r r r r r
d. commingling premiums with agents personal funds
r r r r r r r
-
√Answer>A. handling insurer funds in a trust capacity
r r r r r r r r
an agents fiduciary responsibility includes handling in
r r r r r r
surer funds in a trust capacity r r r r r
Quiz :the authority granted to an agent through the ag
r r r r r r r r r
ent's contract is referred to as
r r r r r
a. absolute authority
r r
