Primerica - Exam test Questions And
Answers 2025
An insurer has made all of the decisions regarding the provisions included in the
insured's policy. The insured finds an objectionable provision and wants to negotiate it
with the insurer but is not allowed to do so. Her only options are to reject the policy or
accept it as is. Which contract feature does this describe?
a) Unilateral
b) Conditional
c) Personal
d) Adhesion - Correct Answer-Adhesion
An insurance policy that only requires a payment of premium at its inception, provides
insurance protection for the life of the insured, and matures at the insured's age 100 is
called
a) Modified Endowment Contract (MEC).
b) Level term life.
c) Graded premium whole life.
d) Single premium whole life. - Correct Answer-Single Premium Whole Life
All of the following are true regarding a decreasing term policy EXCEPT
a) The payable premium amount steadily declines throughout the duration of the
contract.
b) It has a lower premium than level term.
c) The contract pays only in the event of death during the term and there is no cash
value.
d) The face amount steadily declines throughout the duration of the contract. - Correct
Answer-The payable premium amount steadily declines throughout the duration of the
contract
The type of policy that can be changed from one that does not accumulate cash value
to the one that does, is a
a) Decreasing Term Policy.
b) Whole Life Policy.
c) Convertible Term Policy.
d) Renewable Term Policy. - Correct Answer-Convertible Term Policy
The policyowner of an adjustable life policy wants to increase the death benefit. Which
of the following statements is correct regarding this change?
a) The death benefit can be increased by providing evidence of insurability.
,b) The death benefit cannot be increased.
c) The death benefit can be increased only when the policy has developed a cash
value.
d) The death benefit can be increased only by exchanging the existing policy for a new
one. - Correct Answer-The death benefit can be increased by providing evidence of
insurability
When would a 20-pay whole life policy endow?
a) After 20 payments
b) In 20 years
c) When the insured reaches age 100
d) At the insured's age 65 - Correct Answer-When the insured reaches age 100
An insured had a $10,000 term life policy. The annual premium of $200 was due on
February 1; however, the insured failed to pay the premium. He died on February 28.
How much would the beneficiary receive from the policy?
a) $0
b) $200
c) $9,800
d) $10,000 - Correct Answer-$9,800
What is the term for how frequently a policyowner is required to pay the policy
premium?
a) Consideration
b) Mode
c) Schedule
d) Grace period - Correct Answer-Mode
Which of the following types of insurance policies would perform the function of cash
accumulation?
a) Increasing term
b) Whole life
c) Term life
d) Credit life - Correct Answer-Whole Life
Which of the following is called a "second-to-die" policy?
a) Juvenile life
b) Joint life
c) Survivorship life
d) Family income - Correct Answer-Survivorship Life
When a life insurance policy is cancelled and the insured has selected the extended
term nonforfeiture option, the cash value will be used to purchase term insurance that
has a face amount
a) In lesser amounts for the remaining policy term of age 100.
b) Equal to the cash value surrendered from the policy.
, c) The same as the original policy minus the cash value.
d) Equal to the original policy for as long a period of time that the cash values will
purchase. - Correct Answer-Equal to the original policy for as long a period of time that
the cash values will purchase.
Which of the following is the best reason to purchase life insurance rather than
annuities?
a) To liquidate a sum of money over a lifetime
b) To create an estate
c) To liquidate a sum of money over a period of years
d) To create regular income payments - Correct Answer-To create an estate
Which of the following is NOT the consideration in a policy?
a) The application given to a prospective insured
b) Something of value exchanged between parties
c) The premium amount paid at the time of application
d) The promise to pay covered losses - Correct Answer-The application given to a
prospective insured
If an insurer issued a policy based on the application that had unanswered questions,
which of the following will be TRUE?
a) The insurer may deny coverage later, because of the information missing on the
application.
b) The policy will be interpreted as if the insurer waived its right to have an answer on
the application.
c) The policy will be interpreted as if the insured did not have an answer to the question.
d) The policy will be void. - Correct Answer-The policy will be interpreted as if the
insurer waived its right to have an answer on the application
Who is a third-party owner?
a) An insurer who issues a policy for two people
b) An employee in a group policy
c) An irrevocable beneficiary
d) A policyowner who is not the insured - Correct Answer-A policy owner who is not the
insured
Which is TRUE about the cash surrender nonforfeiture option?
a) Funds exceeding the premium paid are taxable as ordinary income.
b) After the cash surrender, the insured is covered for a grace period of 1 month.
c) The policy remains active for some time after the policyholder opts for cash
surrender.
d) The policyholder receives the original cash value of the policy. - Correct Answer-
Funds exceeding the premium paid are taxable as ordinary income
According to the Entire Contract provision, a policy must contain
a) A declarations page with a summary of insureds.
Answers 2025
An insurer has made all of the decisions regarding the provisions included in the
insured's policy. The insured finds an objectionable provision and wants to negotiate it
with the insurer but is not allowed to do so. Her only options are to reject the policy or
accept it as is. Which contract feature does this describe?
a) Unilateral
b) Conditional
c) Personal
d) Adhesion - Correct Answer-Adhesion
An insurance policy that only requires a payment of premium at its inception, provides
insurance protection for the life of the insured, and matures at the insured's age 100 is
called
a) Modified Endowment Contract (MEC).
b) Level term life.
c) Graded premium whole life.
d) Single premium whole life. - Correct Answer-Single Premium Whole Life
All of the following are true regarding a decreasing term policy EXCEPT
a) The payable premium amount steadily declines throughout the duration of the
contract.
b) It has a lower premium than level term.
c) The contract pays only in the event of death during the term and there is no cash
value.
d) The face amount steadily declines throughout the duration of the contract. - Correct
Answer-The payable premium amount steadily declines throughout the duration of the
contract
The type of policy that can be changed from one that does not accumulate cash value
to the one that does, is a
a) Decreasing Term Policy.
b) Whole Life Policy.
c) Convertible Term Policy.
d) Renewable Term Policy. - Correct Answer-Convertible Term Policy
The policyowner of an adjustable life policy wants to increase the death benefit. Which
of the following statements is correct regarding this change?
a) The death benefit can be increased by providing evidence of insurability.
,b) The death benefit cannot be increased.
c) The death benefit can be increased only when the policy has developed a cash
value.
d) The death benefit can be increased only by exchanging the existing policy for a new
one. - Correct Answer-The death benefit can be increased by providing evidence of
insurability
When would a 20-pay whole life policy endow?
a) After 20 payments
b) In 20 years
c) When the insured reaches age 100
d) At the insured's age 65 - Correct Answer-When the insured reaches age 100
An insured had a $10,000 term life policy. The annual premium of $200 was due on
February 1; however, the insured failed to pay the premium. He died on February 28.
How much would the beneficiary receive from the policy?
a) $0
b) $200
c) $9,800
d) $10,000 - Correct Answer-$9,800
What is the term for how frequently a policyowner is required to pay the policy
premium?
a) Consideration
b) Mode
c) Schedule
d) Grace period - Correct Answer-Mode
Which of the following types of insurance policies would perform the function of cash
accumulation?
a) Increasing term
b) Whole life
c) Term life
d) Credit life - Correct Answer-Whole Life
Which of the following is called a "second-to-die" policy?
a) Juvenile life
b) Joint life
c) Survivorship life
d) Family income - Correct Answer-Survivorship Life
When a life insurance policy is cancelled and the insured has selected the extended
term nonforfeiture option, the cash value will be used to purchase term insurance that
has a face amount
a) In lesser amounts for the remaining policy term of age 100.
b) Equal to the cash value surrendered from the policy.
, c) The same as the original policy minus the cash value.
d) Equal to the original policy for as long a period of time that the cash values will
purchase. - Correct Answer-Equal to the original policy for as long a period of time that
the cash values will purchase.
Which of the following is the best reason to purchase life insurance rather than
annuities?
a) To liquidate a sum of money over a lifetime
b) To create an estate
c) To liquidate a sum of money over a period of years
d) To create regular income payments - Correct Answer-To create an estate
Which of the following is NOT the consideration in a policy?
a) The application given to a prospective insured
b) Something of value exchanged between parties
c) The premium amount paid at the time of application
d) The promise to pay covered losses - Correct Answer-The application given to a
prospective insured
If an insurer issued a policy based on the application that had unanswered questions,
which of the following will be TRUE?
a) The insurer may deny coverage later, because of the information missing on the
application.
b) The policy will be interpreted as if the insurer waived its right to have an answer on
the application.
c) The policy will be interpreted as if the insured did not have an answer to the question.
d) The policy will be void. - Correct Answer-The policy will be interpreted as if the
insurer waived its right to have an answer on the application
Who is a third-party owner?
a) An insurer who issues a policy for two people
b) An employee in a group policy
c) An irrevocable beneficiary
d) A policyowner who is not the insured - Correct Answer-A policy owner who is not the
insured
Which is TRUE about the cash surrender nonforfeiture option?
a) Funds exceeding the premium paid are taxable as ordinary income.
b) After the cash surrender, the insured is covered for a grace period of 1 month.
c) The policy remains active for some time after the policyholder opts for cash
surrender.
d) The policyholder receives the original cash value of the policy. - Correct Answer-
Funds exceeding the premium paid are taxable as ordinary income
According to the Entire Contract provision, a policy must contain
a) A declarations page with a summary of insureds.
