PRIMERICA Exam Review Questions with
Correct Answers
Adverse selection
Insuring of risks that are more prone to losses than the average risk
Agent/Producer
a legal representative of an insurance company; the classification of producer usually
includes agents and brokers; agents are agents of the insurer
Applicant or proposed insured
A person applying for insurance
Beneficiary
A person who receives the benefits of an insurance policy
Death benefit
The amount paid upon the death of the insured in a life insurance policy
Fraud
Intentional misrepresentation or deceit with the intent to induce a person to part with
something of value
Insurance policy
A contract between a policy owner (and/or insured) and an insurance company which agrees
to pay the insured or the beneficiary for loss caused by specific events
Insured
person covered by the insurance policy; may or may not be the policy owner
, Insurer(principal)
The company who issues an insurance policy
Lapse
policy termination due to nonpayment of premium
life insurance
coverage on human lives
Policy owner
The person entitled to exercise the right and privileges in the policy
Premium
The money paid to the insurance company for the insurance policy
Insurance
The transfer of risk of loss. The cost of an insured's loss is transferred over to the insurer and
spread among other insureds.
Contract
An agreement between two or more parties enforceable by law
Elements of a Legal Contract
agreement, consideration, competent parties, legal purpose
A contract of adhesion
the insured must accept the entire contract with all of its terms and conditions
Aleatory contract
Correct Answers
Adverse selection
Insuring of risks that are more prone to losses than the average risk
Agent/Producer
a legal representative of an insurance company; the classification of producer usually
includes agents and brokers; agents are agents of the insurer
Applicant or proposed insured
A person applying for insurance
Beneficiary
A person who receives the benefits of an insurance policy
Death benefit
The amount paid upon the death of the insured in a life insurance policy
Fraud
Intentional misrepresentation or deceit with the intent to induce a person to part with
something of value
Insurance policy
A contract between a policy owner (and/or insured) and an insurance company which agrees
to pay the insured or the beneficiary for loss caused by specific events
Insured
person covered by the insurance policy; may or may not be the policy owner
, Insurer(principal)
The company who issues an insurance policy
Lapse
policy termination due to nonpayment of premium
life insurance
coverage on human lives
Policy owner
The person entitled to exercise the right and privileges in the policy
Premium
The money paid to the insurance company for the insurance policy
Insurance
The transfer of risk of loss. The cost of an insured's loss is transferred over to the insurer and
spread among other insureds.
Contract
An agreement between two or more parties enforceable by law
Elements of a Legal Contract
agreement, consideration, competent parties, legal purpose
A contract of adhesion
the insured must accept the entire contract with all of its terms and conditions
Aleatory contract
