PRIMERICA LIFE INSURANC 4 4
E EXAM/194 QUESTIONS AND
4 4 4 4
ANSWERS (A+) 4
An insured purchased an insurance policy 5 years ag
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o. Last year, she received a dividend check from the in
4 4 4 4 4 4 4 4 4 4
surance company that was not taxable. This year, sh 4 4 4 4 4 4 4 4
e did not receive a check from the insurer. From what t
4 4 4 4 4 4 4 4 4 4 4
ype of insurer did the insured purchase the policy?
4 4 4 4 4 4 4 4
a. mutual
4
b. reciprocal
4
c. nonprofit service organization
4 4 4
d. stock - √Answer>A. mutual
4 4 4 4
funds not paid out after paying claims and other opera
4 4 4 4 4 4 4 4 4
ting costs are returned to the policy owners in the form
4 4 4 4 4 4 4 4 4 4 4
of a dividend. if all funds are paid out, no dividends are
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paid
Quiz :Following a career change, an insured is no lon
4 4 4 4 4 4 4 4 4
ger required to perform many physical activities, so h
4 4 4 4 4 4 4 4
e has implemented a program where he walks and jog
4 4 4 4 4 4 4 4 4
s for 45 minutes each morning. The insured has also e
4 4 4 4 4 4 4 4 4 4
liminated most fatty foods from his diet. Which metho 4 4 4 4 4 4 4 4
d of dealing with risk does this scenario describe?
4 4 4 4 4 4 4 4
a. retention
4
,b. reduction4
c. transfer 4
d. avoidance - √Answer>B. reduction
4 4 4 4
the insured's change in lifestyle and habits would likel
4 4 4 4 4 4 4 4
y reduce the chances of health problems
4 4 4 4 4 4
Quiz :In insurance, an offer is usually made when
4 4 4 4 4 4 4 4
a. an applicant submits an application to the insurer
4 4 4 4 4 4 4 4
b. the insurer approves the application and receives t
4 4 4 4 4 4 4 4
he initial premium
4 4
c. the agent hands the policy to the policyholder
4 4 4 4 4 4 4 4
d. an agent explains a policy to a potential applicant -
4 4 4 4 4 4 4 4 4 4
√Answer>A. an applicant submits an application to th
4 4 4 4 4 4 4 4
e insurer
4
in insurance, the offer is usually made by the applican
4 4 4 4 4 4 4 4 4
t in the form of an application. acceptance takes place
4 4 4 4 4 4 4 4 4 4
when an insurer's underwriter approves the applicati
4 4 4 4 4 4
on and issues a policy
4 4 4 4
Quiz :the causes of loss insured against in an insuran
4 4 4 4 4 4 4 4 4
ce policy are known as
4 4 4 4
a. perils 4
b. losses 4
c. risks 4
d. hazards - √Answer>A. perils
4 4 4 4
,perils are the causes of loss insured against in an insu
4 4 4 4 4 4 4 4 4 4
rance policy 4
Quiz :what documentation grants express authority t
4 4 4 4 4 4
o an agent?
4 4
a. agents contract with the principal
4 4 4 4 4
b. agents insurance license
4 4 4
c. fiduciary contract
4 4
d. state provisions -
4 4 4
√Answer>A. agents contract with the principal
4 4 4 4 4 4
the principal grants authority to an agent through the a
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gent's contract 4
Quiz :which of the following best describes an insuran
4 4 4 4 4 4 4 4
ce company that has been formed under the laws of th
4 4 4 4 4 4 4 4 4 4
is state?
4
a. domestic
4
b. sovereign
4
c. alien4
d. foreign - √Answer>A. domestic
4 4 4 4
a company is domestic when doing business within th
4 4 4 4 4 4 4 4
e state in which it is incorporated
4 4 4 4 4 4
Quiz :which of the following factors is NOT considere
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d by an underwriter when determining the premium ra
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tes for an individual seeking insurance?
4 4 4 4 4
, a. medical history
4 4
b. sex 4
c. age 4
d. race - √Answer>D. race
4 4 4 4
age, medical history, and sex provide sound statistica
4 4 4 4 4 4 4
l date for determining the probability of loss. Race, reli
4 4 4 4 4 4 4 4 4
gion, sexual orientation, etc. are the factors that cann
4 4 4 4 4 4 4 4
ot be used because there is not sound statistical data t
4 4 4 4 4 4 4 4 4 4
o show that they effect the probability of loss; therefor
4 4 4 4 4 4 4 4 4
e, they are considered to be discriminatory
4 4 4 4 4 4
Quiz :in insurance transactions, fiduciary responsibili
4 4 4 4 4
ty means 4
a. handling insurer funds in a trust capacity
4 4 4 4 4 4 4
b. maintaining good credit record
4 4 4 4
c. being liable with respect to payment of claims
4 4 4 4 4 4 4 4
d. commingling premiums with agents personal fund
4 4 4 4 4 4
s- 4
√Answer>A. handling insurer funds in a trust capacity
4 4 4 4 4 4 4 4
an agents fiduciary responsibility includes handling in
4 4 4 4 4 4
surer funds in a trust capacity
4 4 4 4 4
Quiz :the authority granted to an agent through the ag
4 4 4 4 4 4 4 4 4
ent's contract is referred to as
4 4 4 4 4
a. absolute authority
4 4
E EXAM/194 QUESTIONS AND
4 4 4 4
ANSWERS (A+) 4
An insured purchased an insurance policy 5 years ag
4 4 4 4 4 4 4 4
o. Last year, she received a dividend check from the in
4 4 4 4 4 4 4 4 4 4
surance company that was not taxable. This year, sh 4 4 4 4 4 4 4 4
e did not receive a check from the insurer. From what t
4 4 4 4 4 4 4 4 4 4 4
ype of insurer did the insured purchase the policy?
4 4 4 4 4 4 4 4
a. mutual
4
b. reciprocal
4
c. nonprofit service organization
4 4 4
d. stock - √Answer>A. mutual
4 4 4 4
funds not paid out after paying claims and other opera
4 4 4 4 4 4 4 4 4
ting costs are returned to the policy owners in the form
4 4 4 4 4 4 4 4 4 4 4
of a dividend. if all funds are paid out, no dividends are
4 4 4 4 4 4 4 4 4 4 4 4
paid
Quiz :Following a career change, an insured is no lon
4 4 4 4 4 4 4 4 4
ger required to perform many physical activities, so h
4 4 4 4 4 4 4 4
e has implemented a program where he walks and jog
4 4 4 4 4 4 4 4 4
s for 45 minutes each morning. The insured has also e
4 4 4 4 4 4 4 4 4 4
liminated most fatty foods from his diet. Which metho 4 4 4 4 4 4 4 4
d of dealing with risk does this scenario describe?
4 4 4 4 4 4 4 4
a. retention
4
,b. reduction4
c. transfer 4
d. avoidance - √Answer>B. reduction
4 4 4 4
the insured's change in lifestyle and habits would likel
4 4 4 4 4 4 4 4
y reduce the chances of health problems
4 4 4 4 4 4
Quiz :In insurance, an offer is usually made when
4 4 4 4 4 4 4 4
a. an applicant submits an application to the insurer
4 4 4 4 4 4 4 4
b. the insurer approves the application and receives t
4 4 4 4 4 4 4 4
he initial premium
4 4
c. the agent hands the policy to the policyholder
4 4 4 4 4 4 4 4
d. an agent explains a policy to a potential applicant -
4 4 4 4 4 4 4 4 4 4
√Answer>A. an applicant submits an application to th
4 4 4 4 4 4 4 4
e insurer
4
in insurance, the offer is usually made by the applican
4 4 4 4 4 4 4 4 4
t in the form of an application. acceptance takes place
4 4 4 4 4 4 4 4 4 4
when an insurer's underwriter approves the applicati
4 4 4 4 4 4
on and issues a policy
4 4 4 4
Quiz :the causes of loss insured against in an insuran
4 4 4 4 4 4 4 4 4
ce policy are known as
4 4 4 4
a. perils 4
b. losses 4
c. risks 4
d. hazards - √Answer>A. perils
4 4 4 4
,perils are the causes of loss insured against in an insu
4 4 4 4 4 4 4 4 4 4
rance policy 4
Quiz :what documentation grants express authority t
4 4 4 4 4 4
o an agent?
4 4
a. agents contract with the principal
4 4 4 4 4
b. agents insurance license
4 4 4
c. fiduciary contract
4 4
d. state provisions -
4 4 4
√Answer>A. agents contract with the principal
4 4 4 4 4 4
the principal grants authority to an agent through the a
4 4 4 4 4 4 4 4 4
gent's contract 4
Quiz :which of the following best describes an insuran
4 4 4 4 4 4 4 4
ce company that has been formed under the laws of th
4 4 4 4 4 4 4 4 4 4
is state?
4
a. domestic
4
b. sovereign
4
c. alien4
d. foreign - √Answer>A. domestic
4 4 4 4
a company is domestic when doing business within th
4 4 4 4 4 4 4 4
e state in which it is incorporated
4 4 4 4 4 4
Quiz :which of the following factors is NOT considere
4 4 4 4 4 4 4 4
d by an underwriter when determining the premium ra
4 4 4 4 4 4 4 4
tes for an individual seeking insurance?
4 4 4 4 4
, a. medical history
4 4
b. sex 4
c. age 4
d. race - √Answer>D. race
4 4 4 4
age, medical history, and sex provide sound statistica
4 4 4 4 4 4 4
l date for determining the probability of loss. Race, reli
4 4 4 4 4 4 4 4 4
gion, sexual orientation, etc. are the factors that cann
4 4 4 4 4 4 4 4
ot be used because there is not sound statistical data t
4 4 4 4 4 4 4 4 4 4
o show that they effect the probability of loss; therefor
4 4 4 4 4 4 4 4 4
e, they are considered to be discriminatory
4 4 4 4 4 4
Quiz :in insurance transactions, fiduciary responsibili
4 4 4 4 4
ty means 4
a. handling insurer funds in a trust capacity
4 4 4 4 4 4 4
b. maintaining good credit record
4 4 4 4
c. being liable with respect to payment of claims
4 4 4 4 4 4 4 4
d. commingling premiums with agents personal fund
4 4 4 4 4 4
s- 4
√Answer>A. handling insurer funds in a trust capacity
4 4 4 4 4 4 4 4
an agents fiduciary responsibility includes handling in
4 4 4 4 4 4
surer funds in a trust capacity
4 4 4 4 4
Quiz :the authority granted to an agent through the ag
4 4 4 4 4 4 4 4 4
ent's contract is referred to as
4 4 4 4 4
a. absolute authority
4 4
