Primerica Life Insurance Exam
Questions and Correct Answers
2024/2025
What is insurance? - CORRECT ANSWER-Transfer of the possibility of loss (risk) to an
insurance company.
What is a risk? - CORRECT ANSWER-The uncertainty of financial loss
There are two types of loss - CORRECT ANSWER-P...
Primerica Life Insurance Exam
Questions and Correct Answers
2024/2025
What is insurance? - CORRECT ANSWER-Transfer of the possibility of loss (risk) to an
insurance company.
What is a risk? - CORRECT ANSWER-The uncertainty of financial loss
There are two types of loss - CORRECT ANSWER-Pure and Speculative
Which type of loss is insurable? - CORRECT ANSWER-Pure
Why is Pure loss insurable? - CORRECT ANSWER-Loss must be financial and
uncertain. No financial gain can occur.
What causes loss? - CORRECT ANSWER-Peril; such as fire, accident or flood
What causes a peril? - CORRECT ANSWER-A hazard
What is a hazard? - CORRECT ANSWER-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 ANSWER-Law of
Large Numbers
What is adverse selection? - CORRECT ANSWER-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
ANSWER-company
The person who pays for the policy of insurance is the - CORRECT ANSWER-policy
owner
The _____________ is the person who receives the benefits from the insurance policy -
CORRECT ANSWER-beneficiary
The person covered by the insurance policy is the ____________. - CORRECT
ANSWER-insured
, The insurance company is the ___________. - CORRECT ANSWER-insurer
To buy insurance, the policyowner must have ______________ in the insured at the
_________________________________________________. - CORRECT ANSWER-
insurable interest; time of purchase but not at
time of insured's death.
The 5 recognizable areas of insurable interest are ___________. - CORRECT
ANSWER-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 ANSWER-Fiduciary
Waiver vs. Estoppel - CORRECT ANSWER-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 ANSWER-1. Key Employee
2. Buy and Sell Agreement
3. Cross Purchase Plan
4. Split Dollar Plan
Key Employee - CORRECT ANSWER-Company is owner and Beneficiary
Employee is Insured Premium NOT tax deductible to Company Third Party Ownership
Buy and Sell Agreement - CORRECT ANSWER-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 ANSWER-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 ANSWER-Employee and Owner share in Premium and
DB Third Party Ownership
What is meant by third party ownership - CORRECT ANSWER-Policy is owned by
someone other than the Insured.
Voordelen van het kopen van samenvattingen bij Stuvia op een rij:
Verzekerd van kwaliteit door reviews
Stuvia-klanten hebben meer dan 700.000 samenvattingen beoordeeld. Zo weet je zeker dat je de beste documenten koopt!
Snel en makkelijk kopen
Je betaalt supersnel en eenmalig met iDeal, creditcard of Stuvia-tegoed voor de samenvatting. Zonder lidmaatschap.
Focus op de essentie
Samenvattingen worden geschreven voor en door anderen. Daarom zijn de samenvattingen altijd betrouwbaar en actueel. Zo kom je snel tot de kern!
Veelgestelde vragen
Wat krijg ik als ik dit document koop?
Je krijgt een PDF, die direct beschikbaar is na je aankoop. Het gekochte document is altijd, overal en oneindig toegankelijk via je profiel.
Tevredenheidsgarantie: hoe werkt dat?
Onze tevredenheidsgarantie zorgt ervoor dat je altijd een studiedocument vindt dat goed bij je past. Je vult een formulier in en onze klantenservice regelt de rest.
Van wie koop ik deze samenvatting?
Stuvia is een marktplaats, je koop dit document dus niet van ons, maar van verkoper TIFFACADEMICS. Stuvia faciliteert de betaling aan de verkoper.
Zit ik meteen vast aan een abonnement?
Nee, je koopt alleen deze samenvatting voor €14,59. Je zit daarna nergens aan vast.
