PRIMERICA LIFE INSURANCE EXAM 2025

PRIMERICA LIFE INSURANCE EXAM u u u




An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the in
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surance company that was not taxable. This year, she did not receive a check from the insurer. From what
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type of insurer did the insured purchase the policy?
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a. mutual
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b. reciprocal
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c. nonprofit service organization
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d. stock correct answerA. mutual
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funds not paid out after paying claims and other operating costs are returned to the policy owners in the f
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orm 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 has
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implemented a program where he walks and jogs for 45 minutes each morning. The insured has also elimi
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nated most fatty foods from his diet. Which method of dealing with risk does this scenario describe?
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a. retention
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b. reduction
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c. transfer
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d. avoidance correct answerB. 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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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 correct answerA. an applicant submits an application
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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 pla
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ce 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
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b. losses
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c. risks
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d. hazards correct answerA. perils
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perils are the causes of loss insured against in an insurance policy
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what documentation grants express authority to an agent?
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a. agents contract with the principal
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b. agents insurance license
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c. fiduciary contract
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d. state provisions correct answerA. 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 s
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tate?



a. domestic
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b. sovereign
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,c. alien
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d. foreign correct answerA. 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 rates
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for an individual seeking insurance?
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a. medical history
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b. sex
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c. age
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d. race correct answerD. race
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age, medical history, and sex provide sound statistical date for determining the probability of loss. Race, r
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eligion, sexual orientation, etc. are the factors that cannot be used because there is not sound statistical d
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ata to show that they effect the probability of loss; therefore, they are considered to be discriminatory
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in insurance transactions, fiduciary responsibility means
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a. handling insurer funds in a trust capacity
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b. maintaining good credit record
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c. being liable with respect to payment of claims
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d. commingling premiums with agents personal funds correct answerA. handling insurer funds in a trust c
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apacity



an agents fiduciary responsibility includes handling insurer funds in a trust capacity
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the authority granted to an agent through the agent's contract is referred to as
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a. absolute authority
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, b. express authority
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c. apparent authority
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d. implied authority correct answerB. 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 provisio
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ns. what contract characteristic does this describe?
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a. unilateral
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b. conditional
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c. personal
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d. adhesion correct answerD. 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 p
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olicy as its written
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which of the following insurers are owned by stockholders who have the usual rights of ownership, includi
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ng the right of voting?
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a. reciprocal
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b. fraternal
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c. stock
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d. mutual correct answerC. 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 for a l
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arge amount of risk on the part of the insurance company?
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