PRIMERICA LIFE
INSURANCE EXAM/194
QUESTIONS AND
ANSWERS (A+)
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 - √Answer>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
Quiz :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 - √Answer>B. reduction
the insured's change in lifestyle and habits would
likely reduce the chances of health problems
Quiz :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
d. an agent explains a policy to a potential
applicant - √Answer>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
Quiz :the causes of loss insured against in an
insurance policy are known as
,a. perils
b. losses
c. risks
d. hazards - √Answer>A. perils
perils are the causes of loss insured against in an
insurance policy
Quiz :what documentation grants express authority
to an agent?
a. agents contract with the principal
b. agents insurance license
c. fiduciary contract
d. state provisions - √Answer>A. agents contract
with the principal
the principal grants authority to an agent through
the agent's contract
Quiz :which of the following best describes an
insurance company that has been formed under
the laws of this state?
a. domestic
b. sovereign
c. alien
d. foreign - √Answer>A. domestic
, a company is domestic when doing business
within the state in which it is incorporated
Quiz :which of the following factors is NOT
considered by an underwriter when determining
the premium rates for an individual seeking
insurance?
a. medical history
b. sex
c. age
d. race - √Answer>D. race
age, medical history, and sex provide sound
statistical date for determining the probability of
loss. Race, religion, sexual orientation, etc. are the
factors that cannot be used because there is not
sound statistical data to show that they effect the
probability of loss; therefore, they are considered
to be discriminatory
Quiz :in insurance transactions, fiduciary
responsibility means
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 - √Answer>A. handling insurer funds in a
trust capacity
INSURANCE EXAM/194
QUESTIONS AND
ANSWERS (A+)
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 - √Answer>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
Quiz :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 - √Answer>B. reduction
the insured's change in lifestyle and habits would
likely reduce the chances of health problems
Quiz :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
d. an agent explains a policy to a potential
applicant - √Answer>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
Quiz :the causes of loss insured against in an
insurance policy are known as
,a. perils
b. losses
c. risks
d. hazards - √Answer>A. perils
perils are the causes of loss insured against in an
insurance policy
Quiz :what documentation grants express authority
to an agent?
a. agents contract with the principal
b. agents insurance license
c. fiduciary contract
d. state provisions - √Answer>A. agents contract
with the principal
the principal grants authority to an agent through
the agent's contract
Quiz :which of the following best describes an
insurance company that has been formed under
the laws of this state?
a. domestic
b. sovereign
c. alien
d. foreign - √Answer>A. domestic
, a company is domestic when doing business
within the state in which it is incorporated
Quiz :which of the following factors is NOT
considered by an underwriter when determining
the premium rates for an individual seeking
insurance?
a. medical history
b. sex
c. age
d. race - √Answer>D. race
age, medical history, and sex provide sound
statistical date for determining the probability of
loss. Race, religion, sexual orientation, etc. are the
factors that cannot be used because there is not
sound statistical data to show that they effect the
probability of loss; therefore, they are considered
to be discriminatory
Quiz :in insurance transactions, fiduciary
responsibility means
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 - √Answer>A. handling insurer funds in a
trust capacity
