Primerica Life Insurance Exam-Graded A
Risk - correct answer-uncertainty of a financial loss; 2 types
Two typed of risks - correct answer-Pure (Insurable) and speculative (uninsurable)
Benefits of purchasing insurance? - correct answer-You get to transfer financial risk left
after passing to insurance company
Law of large numbers - correct answer-the larger the size of the group the more
accurately the experience aka predicted losses of that group can be predicted
Policyowner - correct answer-person who owns policy, pays premiums, and chooses
the beneficiary
Insured - correct answer-the life of the person the policy covers (could be policyowner)
Insurer - correct answer-the insurance company which issues the policy and pays the
death benefit to the beneficiary upon the death of the insured
Beneficiary - correct answer-the person who receives death proceeds
What does having life insurance create or do? - correct answer-Creates an immediate
estate for the beneficiary which could help pay for daily expenses, mortgage, or college
etc
Estate - correct answer-the net worth of a person; things you own minus things you owe
Premium - correct answer-the amount you pay for coverage aka the money that goes
into the policy; money policy owner pays to insurer
Proceeds - correct answer-the money that is paid out (protection) when the insurer dies;
money insurer pays to beneficiary upon insureds death
Synonyms/ other names for proceeds - correct answer-Coverage
insurance amount
face amount
death benefit
Are the proceeds taxed? - correct answer-No, the IRS does not tax them
, Step 1 of how life insurance works - correct answer-Policy owner pays premiums to
insurer/ insurance company
Step 2 of how life insurance works - correct answer-the insurance company issues
policy to policyowner and pays benefit to beneficiary upon the death of the insured
Step 3 of how life insurance works - correct answer-the beneficiary receives benefit
upon insured persons death
Insurance producers - correct answer-aka agents; sell insurance on behalf of the
insurance company AND SHOULD ALWAYS DO WHATS RIGHT FOR CLIENTS
(MONEY ISNT EVERYTHING)
Requirements for insurance producers - correct answer-must be licensed to sell
insurance in their state and must be appointed by an authorized insurance company
Step 1 on issuing life insurance - correct answer-Solicit client (offer to sell them
insurance)
Step 2 on issuing life insurance - correct answer-Give client a sells presentation on
financial product that fits their need
Step 3 on issuing life insurance - correct answer-field underwritting
Job of field underwritter - correct answer-fill out application containing:
- general information
- medical information
- agents report
What is an agent report? - correct answer-Your observation of the client and your
knowledge of them
Step 4 on issuing life insurance - correct answer-After finishing field underwriting
application you must collect the premium and forward both to the company underwriter
Job of company underwritter - correct answer-Determining if someone is eligible for
insurance and classifying them as:
preferred
standard
substandard
declined
Preferred - correct answer-reduced risk of loss
covered at reduced rate
Standard - correct answer-Average exposures
Risk - correct answer-uncertainty of a financial loss; 2 types
Two typed of risks - correct answer-Pure (Insurable) and speculative (uninsurable)
Benefits of purchasing insurance? - correct answer-You get to transfer financial risk left
after passing to insurance company
Law of large numbers - correct answer-the larger the size of the group the more
accurately the experience aka predicted losses of that group can be predicted
Policyowner - correct answer-person who owns policy, pays premiums, and chooses
the beneficiary
Insured - correct answer-the life of the person the policy covers (could be policyowner)
Insurer - correct answer-the insurance company which issues the policy and pays the
death benefit to the beneficiary upon the death of the insured
Beneficiary - correct answer-the person who receives death proceeds
What does having life insurance create or do? - correct answer-Creates an immediate
estate for the beneficiary which could help pay for daily expenses, mortgage, or college
etc
Estate - correct answer-the net worth of a person; things you own minus things you owe
Premium - correct answer-the amount you pay for coverage aka the money that goes
into the policy; money policy owner pays to insurer
Proceeds - correct answer-the money that is paid out (protection) when the insurer dies;
money insurer pays to beneficiary upon insureds death
Synonyms/ other names for proceeds - correct answer-Coverage
insurance amount
face amount
death benefit
Are the proceeds taxed? - correct answer-No, the IRS does not tax them
, Step 1 of how life insurance works - correct answer-Policy owner pays premiums to
insurer/ insurance company
Step 2 of how life insurance works - correct answer-the insurance company issues
policy to policyowner and pays benefit to beneficiary upon the death of the insured
Step 3 of how life insurance works - correct answer-the beneficiary receives benefit
upon insured persons death
Insurance producers - correct answer-aka agents; sell insurance on behalf of the
insurance company AND SHOULD ALWAYS DO WHATS RIGHT FOR CLIENTS
(MONEY ISNT EVERYTHING)
Requirements for insurance producers - correct answer-must be licensed to sell
insurance in their state and must be appointed by an authorized insurance company
Step 1 on issuing life insurance - correct answer-Solicit client (offer to sell them
insurance)
Step 2 on issuing life insurance - correct answer-Give client a sells presentation on
financial product that fits their need
Step 3 on issuing life insurance - correct answer-field underwritting
Job of field underwritter - correct answer-fill out application containing:
- general information
- medical information
- agents report
What is an agent report? - correct answer-Your observation of the client and your
knowledge of them
Step 4 on issuing life insurance - correct answer-After finishing field underwriting
application you must collect the premium and forward both to the company underwriter
Job of company underwritter - correct answer-Determining if someone is eligible for
insurance and classifying them as:
preferred
standard
substandard
declined
Preferred - correct answer-reduced risk of loss
covered at reduced rate
Standard - correct answer-Average exposures
