Primerica - Life Insurance Basics (AZ) multiple choice solution

Primerica - Life Insurance Basics (AZ) multiple choice solution All of the following are duties and responsibilities of producers at the time of application EXCEPT A - Change any incorrect statement on the application by personally initialing next to the corrected statement. B - Explain the nature and type of any receipt the producer is giving to the applicant. C - Probe beyond the stated questions if the producer feels the applicant is misrepresenting or concealing information. D - Check to make sure that there are no unanswered questions on the application. - A - Change any incorrect statement on the application by personally initialing next to the corrected statement. Any changes to information on an application must be initialed by the applicant. Which of the following is NOT among the accounts that the Life and Disability Insurance Guaranty Fund maintains? A - Annuity account B - Group insurance account C - Disability insurance account D - Life insurance account - B - Group insurance account The Fund maintains the following 3 accounts: the disability insurance account, the life insurance account, and the annuity account. The Medical Information Bureau (MIB) was created to protect A - Insureds from unreasonable underwriting requirements by the insurance companies. B - Medical examiners that perform insurance physical examinations. C - Insurance companies from adverse selection by high risk persons. D - Insurance departments from lawsuits by policyowners. - C - Insurance companies from adverse selection by high risk persons. The MIB makes information available to underwriters to assist them in the underwriting process. It is a nonprofit trade organization which receives adverse medical information from insurance companies and maintains confidential medical impairment information on individuals. Which of the following premium modes would result in the highest annual cost for an insurance policy? A - Monthly B - Quarterly C - Semi-annual D - Annual - A - Monthly If the policyowner chooses to pay the premium more frequently than annually, there will be an additional charge (loading) because the company will not have the premium to invest for a full year, and the company will have additional expenses in billing the premium. Based on Human Life Value Approach, which of the following is NOT used to calculate an individual's life value? A - Effect of inflation on income over time. B - Predicted needs of the family after the insured's death. C - Insured's current and future income. D - Insured's annual expenses. - B - Predicted needs of the family after the insured's death. The Human Life Value Approach to determining the value of an individual's life requires the calculation of probable future earnings of the insured, which involves wages, expenses, inflation, amount of time until retirement, and the time value of money. Predicted needs of the family after the insured's death are used in the needs approach. Which is generally true regarding insureds who have been classified as preferred risks? A - They can decide when to pay their monthly premiums. B - They keep a higher percentage of any interest earned on their policies. C - Their premiums are lower. D - They can borrow higher amounts off of their policies. - C - Their premiums are lower. The preferred risk classification indicates that an insured is in excellent physical condition and employs healthy lifestyles and habits. These individuals qualify for lower premiums than those in the other categories.