PRIMERICA Practice Questions with Correct
Answers
If a deferred annuity is surrendered prematurely, a surrender charge is imposed. How
is the surrender charge determined?
a) It is a percentage of the cash value and decreases over time.
All of the following are true of an annuity owner EXCEPT
c) The owner must be the party to receive benefits.
What is the waiting period on a Waiver of Premium rider in life insurance policies?
d) 6 months
After three years of making payments into a flexible premium deferred annuity, the
owner decides to surrender the annuity. The insurer returns all the premium payments
to the owner, except for a predetermined percentage. What is this percentage called?
d )Surrender charge
What is the purpose of a conditional receipt?
c) It is intended to provide coverage on a date prior to the policy issue.
Who is the owner and who is the beneficiary on a Key Person Life Insurance policy?
c) The employer is the owner and beneficiary.
The policyowner pays for her life insurance annually. Until now, she has collected a
nontaxable dividend check each year. She has decided that she would rather use the
dividends to help pay for her next premium. What option would allow her to do this?
b) Reduction of premium
,What limits the amount that a policyowner may borrow from a whole life insurance
policy?
a) Cash value
Joe, Larry, and Curly own a small business. They have made a legal arrangement which
states that if one of them dies or becomes disabled, the other two will be able to buy the
partner's shares. Which term best describes this arrangement?
c) Business Continuation
The type of policy that can be changed from one that does not accumulate cash value to
the one that does is a
c) Convertible Term Policy.
Term policies are available as Level, Increasing, and Decreasing. Which policy
component fluctuates depending on the policy type?
d) Death benefit
Which entity determines the amount of accelerated death benefits that will be paid to an
insured?
a)The insurer
Peril is most easily defined as
d) The cause of loss insured against.
Two individuals are in the same risk and age class; yet, they are charged different rates
for their insurance policies due to an insignificant factor. What is this called?
b) Discrimination
, All of the following are true of key person insurance EXCEPT
b)The plan is funded by permanent insurance only.
A producer agent must do all of the following when delivering a new policy to the
insured EXCEPT
a) Disclose commissions earned from the sale of the policy.
Which entity determines the amount of accelerated death benefits that will be paid to an
insured?
d)The insurer
Which nonforfeiture option has the highest amount of insurance protection?
d)Extended Term
An insured has had a life insurance policy that he purchased 3 years ago when he was
40 years old. He is killed in an automobile accident and it is discovered that he is
actually 45 years old, and not 43, as stated on the application. What will the company
do?
b)Pay a reduced death benefit
The rider in a whole life policy that allows the company to forgo collecting the premium
if the insured is disabled is called
d)Waiver of premium.
Which of the following statements concerning buy-sell agreements is true?
Buy-sell agreements are normally funded with a life insurance policy.
Which of the following determines the cash value of a variable life policy?
Answers
If a deferred annuity is surrendered prematurely, a surrender charge is imposed. How
is the surrender charge determined?
a) It is a percentage of the cash value and decreases over time.
All of the following are true of an annuity owner EXCEPT
c) The owner must be the party to receive benefits.
What is the waiting period on a Waiver of Premium rider in life insurance policies?
d) 6 months
After three years of making payments into a flexible premium deferred annuity, the
owner decides to surrender the annuity. The insurer returns all the premium payments
to the owner, except for a predetermined percentage. What is this percentage called?
d )Surrender charge
What is the purpose of a conditional receipt?
c) It is intended to provide coverage on a date prior to the policy issue.
Who is the owner and who is the beneficiary on a Key Person Life Insurance policy?
c) The employer is the owner and beneficiary.
The policyowner pays for her life insurance annually. Until now, she has collected a
nontaxable dividend check each year. She has decided that she would rather use the
dividends to help pay for her next premium. What option would allow her to do this?
b) Reduction of premium
,What limits the amount that a policyowner may borrow from a whole life insurance
policy?
a) Cash value
Joe, Larry, and Curly own a small business. They have made a legal arrangement which
states that if one of them dies or becomes disabled, the other two will be able to buy the
partner's shares. Which term best describes this arrangement?
c) Business Continuation
The type of policy that can be changed from one that does not accumulate cash value to
the one that does is a
c) Convertible Term Policy.
Term policies are available as Level, Increasing, and Decreasing. Which policy
component fluctuates depending on the policy type?
d) Death benefit
Which entity determines the amount of accelerated death benefits that will be paid to an
insured?
a)The insurer
Peril is most easily defined as
d) The cause of loss insured against.
Two individuals are in the same risk and age class; yet, they are charged different rates
for their insurance policies due to an insignificant factor. What is this called?
b) Discrimination
, All of the following are true of key person insurance EXCEPT
b)The plan is funded by permanent insurance only.
A producer agent must do all of the following when delivering a new policy to the
insured EXCEPT
a) Disclose commissions earned from the sale of the policy.
Which entity determines the amount of accelerated death benefits that will be paid to an
insured?
d)The insurer
Which nonforfeiture option has the highest amount of insurance protection?
d)Extended Term
An insured has had a life insurance policy that he purchased 3 years ago when he was
40 years old. He is killed in an automobile accident and it is discovered that he is
actually 45 years old, and not 43, as stated on the application. What will the company
do?
b)Pay a reduced death benefit
The rider in a whole life policy that allows the company to forgo collecting the premium
if the insured is disabled is called
d)Waiver of premium.
Which of the following statements concerning buy-sell agreements is true?
Buy-sell agreements are normally funded with a life insurance policy.
Which of the following determines the cash value of a variable life policy?
