Primerica Life Insurance Exam
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1. In a case where the primary beneficiary predeceases the insured, in the event
of the insured's death, the death benefit proceeds will be paid to
A) The insured's spouse
B) The policyowner
C) The insurance company
D) The contingent beneficiary: The contingent beneficiary
2. 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
3. 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: Reduction: the insured's change in lifestyle and habits would likely reduce the chances of health
problems
4. 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
, Primerica Life Insurance Exam
Study online at https://quizlet.com/_cig8t8
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
5. the causes of loss insured against in an insurance policy are known as
a. perils
b. losses
c. risks
d. hazards: Perils: perils are the causes of loss insured against in an insurance policy
6. what documentation grants express authority to an agent?
a. agents contract with the principal
b. agents' insurance license
c. fiduciary contract
d. state provisions: agents contract with the principal; the principal grants authority to an agent through the
agent's contract
7. Which of the following is NOT true regarding a nonqualified retirement plan?-
: It needs IRS approval
8. Which of the following may NOT be included in an insurance company's
advertisement?: That its policies are covered by a state Guaranty Association
9. Which of the following is the most common way to transfer risk?: Purchase
Insurance
10. Which of the following would provide an underwriter with information con-
cerning an applicant's health history?: The medical information bureau
11. A temporary producer license could be issued without examination to all of
the following EXCEPT.: The spouse of a retiring insurance producer
12. All of the following are duties and responsibilities of producers at the time
of application EXCEPT
A) Change any incorrect statement on the application by personally initialing
next to the corrected statement.
, Primerica Life Insurance Exam
Study online at https://quizlet.com/_cig8t8
B) Explain the nature and type of any receipt the producer is giving to the
applicant
C) Probe beyond the stated questions if the producer feels the applicant is
misrepresenting or concealing information.
D) Check to make sure that there are no unanswered questions on the applica-
tion: Change any incorrect statement on the application by personally initialing next to the corrected statement.
13. According to the nonforfeiture law, if the owner decides to surrender a
deferred annuity prior to annuitization, the owner is entitled to which of the
following>
A) Guaranteed Surrender Value
B) No Payments
C) Annuity Dividends
D) Full premium refund without any changes: Guaranteed Surrender Value
14. Which law is the foundation of the statistical prediction of loss upon which
rates for insurance are calculated?
A) Law of Masses
B) Law of Averages
C) Law of Group Evaluation
D) Law of Large Numbers: Law of Large Numbers
15. When the insured selects the extended term nonforfeiture option, the cash
value will be used to purchase term insurance with what face amount?
a) The same as the original policy minus the cash value
b) Equal to the original policy for as long as the cash values will purchase.
c)In lesser amounts for the remaining policy term of age 100.
d)Equal to the cash value surrendered from the policy: Equal to the original policy for as
long as the cash values will purchase:
With this option, the cash value is used as a single premium to purchase the same face amount as the original policy
for as long a period of time as the cash will buy at the insured's current age.
16. Your client wants both protection and savings from the insurance and is
willing to pay premiums until retirement at age 65. What would be the right
policy for this client?
a) Interest-sensitive whole life
Study online at https://quizlet.com/_cig8t8
1. In a case where the primary beneficiary predeceases the insured, in the event
of the insured's death, the death benefit proceeds will be paid to
A) The insured's spouse
B) The policyowner
C) The insurance company
D) The contingent beneficiary: The contingent beneficiary
2. 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
3. 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: Reduction: the insured's change in lifestyle and habits would likely reduce the chances of health
problems
4. 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
, Primerica Life Insurance Exam
Study online at https://quizlet.com/_cig8t8
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
5. the causes of loss insured against in an insurance policy are known as
a. perils
b. losses
c. risks
d. hazards: Perils: perils are the causes of loss insured against in an insurance policy
6. what documentation grants express authority to an agent?
a. agents contract with the principal
b. agents' insurance license
c. fiduciary contract
d. state provisions: agents contract with the principal; the principal grants authority to an agent through the
agent's contract
7. Which of the following is NOT true regarding a nonqualified retirement plan?-
: It needs IRS approval
8. Which of the following may NOT be included in an insurance company's
advertisement?: That its policies are covered by a state Guaranty Association
9. Which of the following is the most common way to transfer risk?: Purchase
Insurance
10. Which of the following would provide an underwriter with information con-
cerning an applicant's health history?: The medical information bureau
11. A temporary producer license could be issued without examination to all of
the following EXCEPT.: The spouse of a retiring insurance producer
12. All of the following are duties and responsibilities of producers at the time
of application EXCEPT
A) Change any incorrect statement on the application by personally initialing
next to the corrected statement.
, Primerica Life Insurance Exam
Study online at https://quizlet.com/_cig8t8
B) Explain the nature and type of any receipt the producer is giving to the
applicant
C) Probe beyond the stated questions if the producer feels the applicant is
misrepresenting or concealing information.
D) Check to make sure that there are no unanswered questions on the applica-
tion: Change any incorrect statement on the application by personally initialing next to the corrected statement.
13. According to the nonforfeiture law, if the owner decides to surrender a
deferred annuity prior to annuitization, the owner is entitled to which of the
following>
A) Guaranteed Surrender Value
B) No Payments
C) Annuity Dividends
D) Full premium refund without any changes: Guaranteed Surrender Value
14. Which law is the foundation of the statistical prediction of loss upon which
rates for insurance are calculated?
A) Law of Masses
B) Law of Averages
C) Law of Group Evaluation
D) Law of Large Numbers: Law of Large Numbers
15. When the insured selects the extended term nonforfeiture option, the cash
value will be used to purchase term insurance with what face amount?
a) The same as the original policy minus the cash value
b) Equal to the original policy for as long as the cash values will purchase.
c)In lesser amounts for the remaining policy term of age 100.
d)Equal to the cash value surrendered from the policy: Equal to the original policy for as
long as the cash values will purchase:
With this option, the cash value is used as a single premium to purchase the same face amount as the original policy
for as long a period of time as the cash will buy at the insured's current age.
16. Your client wants both protection and savings from the insurance and is
willing to pay premiums until retirement at age 65. What would be the right
policy for this client?
a) Interest-sensitive whole life
