Primerica - Life Insurance Exam Correctively Answered
0 view 0 purchase
Course
PRIMERICA LIFE INSURANCE
Institution
PRIMERICA LIFE INSURANCE
Primerica - Life Insurance Exam Correctively Answered
What is insurance? -Correct Ans-Transfer of the possibility of loss (risk) to an insurance company.
What is a risk? -Correct Ans-The uncertainty of financial loss
There are two types of loss -Correct Ans-Pure and Speculative
Which type...
Primerica - Life Insurance Exam Correctively Answered
What is insurance? -Correct Ans-Transfer of the possibility of loss (risk) to an insurance
company.
What is a risk? -Correct Ans-The uncertainty of financial loss
There are two types of loss -Correct Ans-Pure and Speculative
Which type of loss is insurable? -Correct Ans-Pure
Why is Pure loss insurable? -Correct Ans-Loss must be financial and uncertain. No
financial gain can occur.
What causes loss? -Correct Ans-Peril; such as fire, accident or flood
What causes a peril? -Correct Ans-A hazard
What is a hazard? -Correct Ans-Increases the likelihood of a loss; such as smoking
What is the concept called, that predicts the appropriate number of deaths that should
occur within a similar group
of people (exposure) within a given period of time? -Correct Ans-Law of Large Numbers
What is adverse selection? -Correct Ans-People in bad health keep their policy in force
longer than people in good health
,As an agent, you are a legal representative of the ______________. -Correct Ans-
company
The person who pays for the policy of insurance is the -Correct Ans-policy owner
The _____________ is the person who receives the benefits from the insurance policy -
Correct Ans-beneficiary
The person covered by the insurance policy is the ____________. -Correct Ans-insured
The insurance company is the ___________. -Correct Ans-insurer
To buy insurance, the policyowner must have ______________ in the insured at the
_________________________________________________. -Correct Ans-insurable
interest; time of purchase but not at
time of insured's death.
The 5 recognizable areas of insurable interest are ___________. -Correct Ans-1. your
own life
2. family members
3. business partners
4. key employee
5.financial obligation.
What is person called who holds a position of special trust and confidence? -Correct
Ans-Fiduciary
, Waiver vs. Estoppel -Correct Ans-Waiver is when you voluntarily give up your legal right.
Estoppel is when you are denied the right to enforce a legal right that you have
previously given up. Estoppel AKA The Loss of Defense
What are the business uses of life insurance? -Correct Ans-1. Key Employee
2. Buy and Sell Agreement
3. Cross Purchase Plan
4. Split Dollar Plan
Key Employee -Correct Ans-Company is owner and Beneficiary
Employee is Insured Premium NOT tax deductible to Company Third Party Ownership
Buy and Sell Agreement -Correct Ans-NOT INSURANCE - A legal document that states
WHO may purchase a deceased partners share of the business and for HOW MUCH
MONEY
Life Insurance can be used to fund a Buy and Sell Agreement
Drawn up by an Attorney
Cross Purchase Plan -Correct Ans-Take the Company Value and divide by number of
Owners Each Owner buys a policy on the other Owners, naming himself as beneficiary.
Split Dollar Plan -Correct Ans-Employee and Owner share in Premium and DB Third Party
Ownership
What is meant by third party ownership -Correct Ans-Policy is owned by someone other
than the Insured.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Blessedmercy. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $8.99. You're not tied to anything after your purchase.
