Primerica-Life Insurance Exam Questions
and answers 2025
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 .- .CORRECT .ANSWER-d. .insurable .interest-STOLI
.purchaser .doesn't .know .the .insured, .or .have .any .interest .in .the .insured's
.longevity, .so .it .violates .the .principle .of .insurable .interest
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 .- .CORRECT .ANSWER-
b. .their .premiums .are .lower- .the .insured .is .in .excellent .physical .condition .and
.employs .healthy .lifestyles .and .habits
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. .- .CORRECT .ANSWER-c. .the
.policy .is .owned .by .the .company.
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 .- .CORRECT .ANSWER-a. .variable- .life .policies .vary .in .value, .as .the
.name .suggests, .because .the .value .is .based .on .the .stocks .that .support .the
.policy. .If .a .policyholder .wants .a .more .stable, .reliable .value, .he/she .should
.invest .in .a .fixed .policy.
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 .- .CORRECT .ANSWER-b. .executive .bonus
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? .- .CORRECT .ANSWER-Blackout .period- .begins
.when .the .youngest .child .reaches .the .age .of .16, .and .ends .when .the .surviving
.spouse .qualifies .for .retirement .benefits, .as .early .as .age .60. .No .benefits .are
.paid .during .this .time.
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 .- .CORRECT .ANSWER-a. .estate .conservation- .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 .estate .conservation.
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 .-
.CORRECT .ANSWER-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? .- .CORRECT
.ANSWER-Partner .A
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 .- .CORRECT .ANSWER-c. .estimated .longevity
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 .- .CORRECT .ANSWER-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 .- .CORRECT .ANSWER-c. .the .expense .of .a .vacation .for
.surviving .family .members
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. .- .CORRECT .ANSWER-b. .predicted .needs .of .the
.family .after .the .insured's .death- .are .used .in .the .needs .approach. .The .Human
.Life .Value .Approach .requires .the .calculation .of .probable .future .earnings .of .the
.insured, .which .involves .wages, .expenses, .inflation, .amount .of .time .until
.retirement, .and .the .time .value .of .money.
Who .makes .up .the .Medical .Information .Bureau? .- .CORRECT .ANSWER-Insurers
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 .- .CORRECT .ANSWER-c. .signed .waiver .of .premium
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 .- .CORRECT .ANSWER-c. .her
.insurer .used .interest .earned .on .premiums .to .lower .premium .amounts
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 .- .CORRECT
.ANSWER-d. .executive .is .the .owner, .and .the .executive .pays .the .premium- .the
.employer .reimburses .the .executive .for .cost .(or .pays .a .bonus .in .the .amount .of
.the .premium). .Since .the .executive .is .receiving .compensation, .the .amount .paid
.by .the .employer .would .be .considered .taxable .income.
and answers 2025
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 .- .CORRECT .ANSWER-d. .insurable .interest-STOLI
.purchaser .doesn't .know .the .insured, .or .have .any .interest .in .the .insured's
.longevity, .so .it .violates .the .principle .of .insurable .interest
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 .- .CORRECT .ANSWER-
b. .their .premiums .are .lower- .the .insured .is .in .excellent .physical .condition .and
.employs .healthy .lifestyles .and .habits
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. .- .CORRECT .ANSWER-c. .the
.policy .is .owned .by .the .company.
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 .- .CORRECT .ANSWER-a. .variable- .life .policies .vary .in .value, .as .the
.name .suggests, .because .the .value .is .based .on .the .stocks .that .support .the
.policy. .If .a .policyholder .wants .a .more .stable, .reliable .value, .he/she .should
.invest .in .a .fixed .policy.
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 .- .CORRECT .ANSWER-b. .executive .bonus
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? .- .CORRECT .ANSWER-Blackout .period- .begins
.when .the .youngest .child .reaches .the .age .of .16, .and .ends .when .the .surviving
.spouse .qualifies .for .retirement .benefits, .as .early .as .age .60. .No .benefits .are
.paid .during .this .time.
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 .- .CORRECT .ANSWER-a. .estate .conservation- .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 .estate .conservation.
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 .-
.CORRECT .ANSWER-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? .- .CORRECT
.ANSWER-Partner .A
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 .- .CORRECT .ANSWER-c. .estimated .longevity
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 .- .CORRECT .ANSWER-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 .- .CORRECT .ANSWER-c. .the .expense .of .a .vacation .for
.surviving .family .members
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. .- .CORRECT .ANSWER-b. .predicted .needs .of .the
.family .after .the .insured's .death- .are .used .in .the .needs .approach. .The .Human
.Life .Value .Approach .requires .the .calculation .of .probable .future .earnings .of .the
.insured, .which .involves .wages, .expenses, .inflation, .amount .of .time .until
.retirement, .and .the .time .value .of .money.
Who .makes .up .the .Medical .Information .Bureau? .- .CORRECT .ANSWER-Insurers
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 .- .CORRECT .ANSWER-c. .signed .waiver .of .premium
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 .- .CORRECT .ANSWER-c. .her
.insurer .used .interest .earned .on .premiums .to .lower .premium .amounts
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 .- .CORRECT
.ANSWER-d. .executive .is .the .owner, .and .the .executive .pays .the .premium- .the
.employer .reimburses .the .executive .for .cost .(or .pays .a .bonus .in .the .amount .of
.the .premium). .Since .the .executive .is .receiving .compensation, .the .amount .paid
.by .the .employer .would .be .considered .taxable .income.
