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PRIMERICA LIFE INSURANCE EXAM QUESTIONS AND ANSWERS

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PRIMERICA LIFE INSURANCE EXAM QUESTIONS AND ANSWERS 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 ...

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  • February 1, 2024
  • 42
  • 2023/2024
  • Exam (elaborations)
  • Questions & answers

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  • primerica life insurance exam

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PRIMERICA
LIFE
INSURANCE
EXAM
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
-
ANS
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
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
-
ANS
B.
reduction
the
insured's
change
in
lifestyle
and
habits
would
likely
reduce
the
chances
of
health
problems
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
-
ANS
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
the
causes
of
loss
insured
against
in
an
insurance
policy
are
known
as
a.
perils
b.
losses c.
risks
d.
hazards
-
ANS
A.
perils
perils
are
the
causes
of
loss
insured
against
in
an
insurance
policy
what
documentation
grants
express
authority
to
an
agent?
a.
agents
contract
with
the
principal
b.
agents
insurance
license
c.
fiduciary
contract
d.
state
provisions
-
ANS
A.
agents
contract
with
the
principal
the
principal
grants
authority
to
an
agent
through
the
agent's
contract
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
-
ANS
A.
domestic
a
company
is
domestic
when
doing
business
within
the
state
in
which
it
is
incorporated
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
-
ANS
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
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
-
ANS
A.
handling
insurer
funds
in
a
trust
capacity an
agents
fiduciary
responsibility
includes
handling
insurer
funds
in
a
trust
capacity
the
authority
granted
to
an
agent
through
the
agent's
contract
is
referred
to
as
a.
absolute
authority
b.
express
authority
c.
apparent
authority
d.
implied
authority
-
ANS
B.
express
authority
express
powers
are
written
into
the
contract
between
the
insurer
and
the
agent
insurance
policies
are
not
drawn
up
though
negotiations,
and
an
insured
has
little
to
say
about
its
provisions.
what
contract
characteristic
does
this
describe?
a.
unilateral
b.
conditional
c.
personal
d.
adhesion
-
ANS
D.
adhesion
a
contract
of
adhesion
is
prepared
by
only
the
insurer;
the
insured's
only
option
is
to
accept
or
reject
the
policy
as
its
written
which
of
the
following
insurers
are
owned
by
stockholders
who
have
the
usual
rights
of
ownership,
including
the
right
of
voting?
a.
reciprocal
b.
fraternal
c.
stock
d.
mutual
-
ANS
C.
stock
only
stock
insurance
companies
are
owned
and
controlled
by
stockholders
which
of
the
following
best
describes
the
concept
that
the
insured
pays
a
small
amount
of
premium
for
a
large
amount
of
risk
on
the
part
of
the
insurance
company?
a.
subrogation
b.
warranty
c.
aleatory
d.
adhesion
-
ANS
C.
aleatory
an
insurance
contract
is
an
aleatory
contract
in
that
it
requires
a
relatively
small
amount
of
premium
for
a
large
risk When
an
insured
makes
truthful
statements
on
the
application
for
insurance
and
pays
the
required
premium,
it
is
known
as
which
of
the
following?
a.
legal
purpose
b.
contract
of
adhesion
c.
acceptance
d.
consideration
-
ANS
D.
consideration
consideration
is
something
of
value
that
each
party
gives
to
the
other.
The
consideration
on
the
part
of
the
insured
is
the
payment
of
premium
and
the
representations
made
in
the
application
which
of
the
following
would
qualify
as
a
competent
party
in
an
insurance
contract?
a.
the
applicant
is
intoxicated
at
the
time
of
application
b.
the
applicant
is
12
year
old
student
c.
the
applicant
is
under
the
influence
of
a
mind-impairing
medication
at
the
time
of
application
d.
the
applicant
has
a
prior
felony
conviction
-
ANS
D.
the
applicant
has
a
prior
felony
conviction
when
an
insurer
and
insured
enter
into
a
contract,
both
parties
must
be
legal
of
age
and
mentally
competent.
It
is
legal
for
a
person
convicted
of
a
felony
to
buy
an
insurance
contract.
An
intoxicated
person,
however,
may
not
be
mentally
competent,
a
12
year
old
student
is
considered
to
be
underage
in
most
states
and
a
person
under
mind-impairing
medication
most
likely
would
not
be
mentally
competent
an
insurer
neglects
to
pay
a
legitimate
claim
that
is
covered
under
the
terms
of
the
policy.
Which
of
the
following
insurance
principles
has
the
insurer
violated?
a.
representation
b.
adhesion
c.
consideration
d.
good
health
-
ANS
C.
consideration
the
binding
force
in
any
contract
is
consideration.
consideration
on
the
part
of
the
insureds
the
payment
of
premiums
and
the
health
representations
made
in
the
application.
Consideration
on
the
part
of
the
insurer
is
the
promise
to
pay
in
the
even
of
loss
which
of
the
following
is
a
primary
source
of
information
used
for
insurance
underwriting?
a.
application
b.
applicant
interviews
c.
medical
records.
d.
private
investigations
-
ANS
A.
application

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