PRIMERICA LIFE INSURANCE EXAM with complete verified solutions 2025
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Course
Primerica
Institution
Primerica
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. non...
PRIMERICA LIFE INSURANCE EXAM
with complete verified solutions
2025
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
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
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
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
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
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
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
, 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
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 - answer 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
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