PRIMERICA LIFE INSURANCE EXAM QUESTIONS AND CORRECT
DETAILED ANSWERS WITH RATIONALES(VERIFIED ANSWERS)
Terms in this set (194)
An insured purchased an insurance A. mutual
policy 5 years ago. Last year, she
received a funds not paid out after paying claims and other operating costs
dividend check from the insurance are returned to the policy owners in the form of a dividend. if
company that was not taxable. all funds are paid out, no dividends are paid
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
,Following a career change, an B. reduction
insured is no longer required to
perform many physical the insured's change in lifestyle and habits would likely reduce
activities, so he has the chances of health problems
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
In insurance, an offer is usually A. an applicant submits an application to the insurer
made when
in insurance, the offer is usually made by the applicant in the
a. an applicant submits an form of an application. acceptance takes place when an insurer's
application to the insurer underwriter approves the application and issues a policy
b. the insurer approves the
application and receives the
initial premium
c. the agent hands the policy
to the policyholder
d. an agent explains a policy to a
potential
applicant
the causes of loss insured against A. perils
in an insurance policy are known
as perils are the causes of loss insured against in an insurance policy
a. perils
b. losses
,c. risks
d. hazards
what documentation grants A. agents contract with the principal
express authority to an agent?
the principal grants authority to an agent through the agent's contract
a. agents contract with the principal
b. agents insurance license
c. fiduciary contract
d. state provisions
which of the following best A. domestic
describes an insurance company
that has been formed under the a company is domestic when doing business within the state in
laws of this state? which it is incorporated
a. domestic
b. sovereign
c. alien
d. foreign
, which of the following D. race
factors is NOT considered
by an underwriter when age, medical history, and sex provide sound statistical date for determining
the
determining the premium
probability of loss. Race, religion, sexual orientation, etc. are the
rates for an individual
factors that cannot be used because there is not sound
seeking insurance?
statistical data to show that they effect the
probability of loss; therefore, they are considered to be discriminatory
a. medical history
b. sex
c. age
d. race
in insurance transactions, fiduciary A. handling insurer funds in a trust capacity
responsibility means
an agents fiduciary responsibility includes handling insurer funds in a trust
capacity
a. handling insurer funds in a trust
capacity
b. maintaining good credit record
c. being liable with respect to
payment of claims
d. commingling premiums
with agents personal funds
the authority granted to an agent B. express authority
through the agent's contract is
referred to as express powers are written into the contract between the insurer and the
agent
a. absolute authority
b. express authority
c. apparent authority
d. implied authority
insurance policies are not drawn D. adhesion
up though negotiations, and an
insured has little to say about its a contract of adhesion is prepared by only the insurer; the
provisions. what contract insured's only option is to accept or reject the policy as its
characteristic does this describe? written
a. unilateral
b. conditional
c. personal
d. adhesion
DETAILED ANSWERS WITH RATIONALES(VERIFIED ANSWERS)
Terms in this set (194)
An insured purchased an insurance A. mutual
policy 5 years ago. Last year, she
received a funds not paid out after paying claims and other operating costs
dividend check from the insurance are returned to the policy owners in the form of a dividend. if
company that was not taxable. all funds are paid out, no dividends are paid
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
,Following a career change, an B. reduction
insured is no longer required to
perform many physical the insured's change in lifestyle and habits would likely reduce
activities, so he has the chances of health problems
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
In insurance, an offer is usually A. an applicant submits an application to the insurer
made when
in insurance, the offer is usually made by the applicant in the
a. an applicant submits an form of an application. acceptance takes place when an insurer's
application to the insurer underwriter approves the application and issues a policy
b. the insurer approves the
application and receives the
initial premium
c. the agent hands the policy
to the policyholder
d. an agent explains a policy to a
potential
applicant
the causes of loss insured against A. perils
in an insurance policy are known
as perils are the causes of loss insured against in an insurance policy
a. perils
b. losses
,c. risks
d. hazards
what documentation grants A. agents contract with the principal
express authority to an agent?
the principal grants authority to an agent through the agent's contract
a. agents contract with the principal
b. agents insurance license
c. fiduciary contract
d. state provisions
which of the following best A. domestic
describes an insurance company
that has been formed under the a company is domestic when doing business within the state in
laws of this state? which it is incorporated
a. domestic
b. sovereign
c. alien
d. foreign
, which of the following D. race
factors is NOT considered
by an underwriter when age, medical history, and sex provide sound statistical date for determining
the
determining the premium
probability of loss. Race, religion, sexual orientation, etc. are the
rates for an individual
factors that cannot be used because there is not sound
seeking insurance?
statistical data to show that they effect the
probability of loss; therefore, they are considered to be discriminatory
a. medical history
b. sex
c. age
d. race
in insurance transactions, fiduciary A. handling insurer funds in a trust capacity
responsibility means
an agents fiduciary responsibility includes handling insurer funds in a trust
capacity
a. handling insurer funds in a trust
capacity
b. maintaining good credit record
c. being liable with respect to
payment of claims
d. commingling premiums
with agents personal funds
the authority granted to an agent B. express authority
through the agent's contract is
referred to as express powers are written into the contract between the insurer and the
agent
a. absolute authority
b. express authority
c. apparent authority
d. implied authority
insurance policies are not drawn D. adhesion
up though negotiations, and an
insured has little to say about its a contract of adhesion is prepared by only the insurer; the
provisions. what contract insured's only option is to accept or reject the policy as its
characteristic does this describe? written
a. unilateral
b. conditional
c. personal
d. adhesion
