Primerica Practice Test
A life insurance death benefit paid in a lump sum to a beneficiary is - ANS-not subject to any
taxes
A life settlement opinion that pays out the death benefit incrementally, in a specified amount
until all of the proceeds are exhausted, is called - ANS-fixed-amount installments
All other factors being equal, which of the following types of policies will accumulate cash
value at the fastest rate? - ANS-20-pay life
An agent delivers a policy to an insured, and 9 days later the insured returns the policy and
wants a complete refund. What provision covers this circumstance? - ANS-free look
An annuity in which investment growth is dependent on the performance of an index such as
the Standard and Poor's 500 is called a(n) - ANS-equity indexed annuity
An annuity is considered fixed when it does all of the following EXCEPT - ANS-provides the
annuitant with an interest rate that is the lesser of the guaranteed or current rate
An annuity that is purchased with a lump-sum payment, and that begins income payments
within one year is a - ANS-single premium immediate annuity
An insurance agent represents the - ANS-insurer
An insurer mails an insurance policy to a new policyowner. When the insurer relinquishes
control of the policy, the policy is considered - ANS-delivered
Any insurer who is NOT approved to do business in this state is considered -
ANS-nonadmitted
At what age can a participant receive distributions from a qualified plan without incurring a
10% penalty? - ANS-59.5
Betty is the only beneficiary named on her husband Bob's policy which has a Common
Disaster provision. They are in a car wreck, and Bob dies instantly. Betty lives for 29 days.
Who will receive the death benefit? - ANS-Bob's estate
Each of the following is a typical characteristic of group life insurance EXCEPT -
ANS-evidence of insurability is usually required
For an insurance contract, the principle of utmost good faith means - ANS-each party relies
upon the truthfulness of the other
How long does an employee have to convert group policy coverage to an individual policy
without evidence of insurability? - ANS-31 days
If a licensed life insurance agent wants to sell variable life policies, what additional license
must the agent obtain? - ANS-securities
If a misstatement of age is discovered during the processing of a life insurance claim, what
will the insurer do? - ANS-adjusts the death benefit based on the premiums that were paid
If an annuitant dies during the accumulation period, what will the beneficiary receive? -
ANS-either the cash value or the premiums paid, whichever is greater
If the cash value exceeds the premiums paid in a whole life policy, what are the tax
consequences if the policy is surrendered - ANS-the portion that exceeds the premiums paid
is taxable
Money borrowed from the policy's cash value is - ANS-not taxable
Statements in the application for insurance that are believed to be true to the best of the
applicant's knowledge are called - ANS-representations
A life insurance death benefit paid in a lump sum to a beneficiary is - ANS-not subject to any
taxes
A life settlement opinion that pays out the death benefit incrementally, in a specified amount
until all of the proceeds are exhausted, is called - ANS-fixed-amount installments
All other factors being equal, which of the following types of policies will accumulate cash
value at the fastest rate? - ANS-20-pay life
An agent delivers a policy to an insured, and 9 days later the insured returns the policy and
wants a complete refund. What provision covers this circumstance? - ANS-free look
An annuity in which investment growth is dependent on the performance of an index such as
the Standard and Poor's 500 is called a(n) - ANS-equity indexed annuity
An annuity is considered fixed when it does all of the following EXCEPT - ANS-provides the
annuitant with an interest rate that is the lesser of the guaranteed or current rate
An annuity that is purchased with a lump-sum payment, and that begins income payments
within one year is a - ANS-single premium immediate annuity
An insurance agent represents the - ANS-insurer
An insurer mails an insurance policy to a new policyowner. When the insurer relinquishes
control of the policy, the policy is considered - ANS-delivered
Any insurer who is NOT approved to do business in this state is considered -
ANS-nonadmitted
At what age can a participant receive distributions from a qualified plan without incurring a
10% penalty? - ANS-59.5
Betty is the only beneficiary named on her husband Bob's policy which has a Common
Disaster provision. They are in a car wreck, and Bob dies instantly. Betty lives for 29 days.
Who will receive the death benefit? - ANS-Bob's estate
Each of the following is a typical characteristic of group life insurance EXCEPT -
ANS-evidence of insurability is usually required
For an insurance contract, the principle of utmost good faith means - ANS-each party relies
upon the truthfulness of the other
How long does an employee have to convert group policy coverage to an individual policy
without evidence of insurability? - ANS-31 days
If a licensed life insurance agent wants to sell variable life policies, what additional license
must the agent obtain? - ANS-securities
If a misstatement of age is discovered during the processing of a life insurance claim, what
will the insurer do? - ANS-adjusts the death benefit based on the premiums that were paid
If an annuitant dies during the accumulation period, what will the beneficiary receive? -
ANS-either the cash value or the premiums paid, whichever is greater
If the cash value exceeds the premiums paid in a whole life policy, what are the tax
consequences if the policy is surrendered - ANS-the portion that exceeds the premiums paid
is taxable
Money borrowed from the policy's cash value is - ANS-not taxable
Statements in the application for insurance that are believed to be true to the best of the
applicant's knowledge are called - ANS-representations
