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Primerica Exam Review Questions with Complete Solutions Graded A+
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Primerica Exam Review Questions with Complete Solutions Graded A+
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Primerica ExamReview Questions
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Denning [Date] [Course title]
,If an insurer meets the state's financial requirements and is approved to transact business in the state, it
is considered to be - Answer: Authorized
A participating insurance policy may do which of the following? - Answer: Pay dividends to the policy
owner
An insured owns a life insurance policy. To be able to pay some of her medical bills, she withdraws a
portion of the policy's cash value. There is a limit for a withdrawal and the insurer charges a fee. What
type of policy does the insured most likely have? - Answer: Universal life
All of the following are examples of third-party ownership of a life insurance policy EXCEPT - Answer: An
insured borrows money from the back and makes a collateral assignment of a part of the death benefit
to secure the loan.
Which statement is NOT true regarding a Straight Life policy? - Answer: Its premium steadily decreases
over time, in response to its growing cash value.
An individual purchased a $100,000 Joint Life policy on himself and his wife. Eight years later, he died in
an automobile accident. How much will his wife receive from the policy? - Answer: $100,000
A person takes out a loan in order to pay off his house. He dies several years later, having paid off only a
small portion of the debt. Which of the following is true? - Answer: If the lender has credit insurance,
this amount will be paid to the lender.
Two individuals are in the same risk and age class; yet, they are charged different rates of their
insurance policies die to an insignificant factor. What is this called? - Answer: Discrimination
A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional
protection until his children finished college. He discovered that his policy - Answer: Required a
premium increase each renewal.
If a consumer requests additional information concerning an investigation consumer report, how long
does the insurer or reporting agency have to comply? - Answer: 5 days
,How is the Insurance Guaranty Association funded? - Answer: By its members-authorized insurers
An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly
payments. What type of life insurance policy would be best suited to this situation? - Answer:
Decreasing term
After a back injury, an insured is disabled for a year. His insurance policy carries a Disability Income
Benefit rider. Which of the following benefits will he receive? - Answer: Monthly premium waiver and
monthly income
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT -
Answer: Dividends from a mutual insurer.
The type of policy that can be changed from one that does not accumulate cash value to the one that
does is a - Answer: Convertible Term Policy.
After its issuance, the temporary work authority expires after how many days - Answer: 180 days not 60
All of the following would be considered an insurance transaction EXCEPT - Answer: Obtaining an
insurance license.
The requirement that agents must account for all insurance funds collected, and are not permitted to
comingle those funds with their own is known as - Answer: Fiduciary responsibility.
What is the purpose of a fixed-period settlement option? - Answer: To provide a guaranteed income for
a certain amount of time
During policy replacement, the replacing insurer must notify existing insurers within what time period? -
Answer: 5 business days
What significance did U.S. vs. South-Eastern Underwriters have on the insurance industry? - Answer: It
reversed the decision of Paul vs. Virginia, determining that insurance is interstate commerce and should
be regulated federally.
, Items stipulated in the contract that the insurer will not provide coverage for are found in the - Answer:
Exclusions clause.
When a life insurance policy is cancelled and the insured has selected the extended term nonforfeiture
option, the cash value will be used to purchase term insurance that has a face amount - Answer: Equal
to the original policy for as long a period of time that the cash values will purchase.
All of the following are characteristics of group life insurance EXCEPT - Answer: Premiums are
determined by the age, sex and occupation of each individual certificate holder.
An individual applied for an insurance policy and paid the initial premium. The insurer issued a
conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy is issued,
what would be the policy's effective date? - Answer: The date of medical exam
For a retirement plan to be qualified, it must be designed for the benefit of - Answer: Employees.
Which of the following statements about a life insurance policy would be allowed in an insurance
advertisement? - Answer: This is a term life insurance policy.
Which of the following is a generic consumer publication that explains life insurance in general terms in
order to assist the applicant in the decision-making process? - Answer: Buyer's Guide
Which of the following employees insured under a group life plan would be allowed to convert to
individual insurance of the same coverage once the plan is terminated? - Answer: Those who have been
insured under the plan for at least 5 years
The interest earned on policy dividends is - Answer: taxable
A rider that may be attached to a life insurance policy that will adjust the face amount based upon a
specific index, such as the Consumer Price Index, is called - Answer: Cost of living rider.
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