Primerica Exam Stimulator Study Guide with Complete Solutions

A provision in a life insurance policy that provides for the early payment of some portion of the policy face amount should the insured suffer from a terminal illness or injury is called - ANSWER-Accelerated Benefit provision. Which of the following would NOT fall into the category of costs associated with death? - ANSWER-The expense of a vacation for surviving family members A set of legal or regulatory conditions that affect an insurer's ability to collect premiums commensurate with the level of risk incurred would be considered a(n): - ANSWER-Legal hazard. An insured receives an annual life insurance dividend check. What term best describes this arrangement? - ANSWER-Cash option Which of the following life insurance policies allows a policyowner to take out a loan from the policy's cash value? - ANSWER-Variable universal life When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is - ANSWER-Conditional. In the event of a loss, business overhead insurance will pay for - ANSWER-Rent Using a class designation for beneficiaries means - ANSWER-Naming beneficiaries as a group. All of the following are general requirements of a qualified plan EXCEPT - ANSWER-The plan must provide an offset for social security benefits. What type of whole life insurance policy has premiums that are adjusted so that during the first years of the policy, the premiums are lower than those of a straight whole life policy, and in subsequent years the premiums are higher than those of a straight whole life policy? - ANSWER-adjustable life policy When can earned, surplus be returned to the policyholder? - ANSWER-Whenever it exists and is not needed for other expenses Which of the following best describes what policy dividends are? - ANSWER-Distribution of excess funds An agent and an applicant for a life insurance policy fill out and sign the application. However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. When will coverage begins? - ANSWER-When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable Statement of Good Health Which nonforfeiture option has the highest amount of insurance protection? - ANSWER-Extended Term The title page of the policy provides a summary of the benefits and coverages provided by the policy. All of the following information is included in the title page EXCEPT - ANSWER-The insured's beneficiaries. The causes of loss insured against in an insurance policy are known as - ANSWER-Perils Stranger-originated life insurance policies are in direct opposition to the principle of - ANSWER-Insurable interest.