PRIMERICA EXAM| 71 QUESTIONS| WITH COMPLETE SOLUTIONS

An individual is purchasing a permanent life insurance with a face value of $25,000. While this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy? correct answer: Guaranteed insurability option Which of the following best describes fixed-period settlement option? correct answer: Both the principal and interest will be liquidated over a selected period of time. When is the earliest a policy may go into effect? correct answer: When the application is signed and a check is given to the agent. Which of the following is NOT true regarding the accumulation period of an annuity? correct answer: It would not occur in a deferred annuity. If a life insurance policy develops cash value faster than a seven-pay whole life contract, it becomes a/an correct answer: Modified endowment contract. All of the following statements concerning the use of life insurance as an executive bonus are correct except correct answer: The policy is owned by the company. Which of the following statements concerning buy-sell agreements is true? correct answer: Buy-sell agreements are normally funded with a life insurance policy. How are contributions to a tax-sheltered annuity treated with regards to taxation? correct answer: They are not included as income for the employee, but are taxable upon distribution. If an insurer issued a policy based on the application that had unanswered questions, which of the following will be TRUE? correct answer: The policy will be interpreted as if the insurer waived its right to have an answer on the application. Which option is being utilized when the insurer accumulates dividends at interest and then uses the accumulated dividends, plus interest, and the policy cash value to pay the policy up early? correct answer: Paid-up option. Which of the following settlement options i