Primerica Practice Exam Test A 75 Questions & Answers 2023

Primerica Practice Exam Test A 75 Questions & Answers 2023 1. An annuity that is purchased with a lump sum premium and whose benefits begin after 12 months is called a: A. Single premium immediate annuity. B. Single premium deferred annuity. C. Level premium variable annuity. D. Flexible premium fixed annuity. - Correct answer-Single premium deferred annuity 2. A technique used to determine the amount of life insurance needed by focusing on the projected earning potential of an insured is called the: A. Needs approach. B. Future income option. C. Human life value approach. D. Life income approach. - Correct answer-Human life value approach 3. When replacing a policy the producer must present the applicant with a Notice Regarding Replacement of Life Insurance: A. At the policy delivery date. B. 7 days after the initial meeting. C. On the date the underwriter approves the policy. D. At the time of taking the application. - Correct answer-At the time of taking the application 4. The possibility of a financial loss incurred by a life insurance company for the premature death of an insured is known as a: A. Peril. B. Risk. C. Hazard. D. Loss. - Correct answer-Risk 5. The Medical Information Bureau (MIB) is a nonprofit trade association that maintains: A. Motorist information on applicants for life and health insurance. B. Medical information on applicants for life and health insurance, C. Maternity information on female applicants for life and health insurance. D. Classifications of risk for previous policies. - Correct answer-medical information on applicants for life and health insurance 6. A person who signs a fraudulent claim form may be found guilty of: A. Rebating. B. Perjury. C. Misdemeanor. D. Misrepresentation. - Correct answer-perjury 7. Which policy is a combination of annual renewable term insurance and interestsensitive cash value? A. Universal life B. Adjustable life C. Renewable term life D. Interest-sensitive whole life - Correct answer-universal life 8. The right to a full refund of premiums for insureds age 60 or older is: A. 10 days. B. 14 days. C. 20 days. D. 30 days. - Correct answer-30 days 9. The premium modes can be best described as the: A. Amount of premium payment. B. Method of premium payment. C. Frequency of premium payment. D. Calculation of premium payment. - Correct answer-Frequency of premium payment 10. Intentionally omitting a history of heart problems on an application is: A. Prudent. B. Misrepresentation. C. Consideration. D. Concealment. - Correct answer-Concealment 11. A tax-sheltered annuity (TSA) is a qualified plan available for: A. Employees of corporations. B. Self-employed persons. C. Nonprofit organizations. D. Group life insurance. - Correct answer-nonprofit organizations 12. The intent of replacement regulations is to protect the: A. Producer. B. Agency. C. Policyowner. D. Insurance company. - Correct answer-Policy owner 13. Which provision allows a lapsed policy to be put back in force? A. Replacement B. Incontestability C. Grace period D. Reinstatement - Correct answer-Reinstatement 14. According to the California Department of Insurance, an insurer whose articles of incorporation are registered in Oslo, Norway is considered a/an: A. Domestic insurer. B. Foreign insurer. C. Alien insurer. D. Admitted insurer. - Correct answer-Alien insurer 15. Mortality is defined as the A. Probability of a disability. B. Rate of death. C. Rate of annuitization. D. Probability of an illness. - Correct answer-Rate of death 16. Which of the following is NOT a characteristic of group life insurance? A. A group may exist for the purpose of purchasing insurance. B. The insurance is written as a master policy. C. Members receive a certificate of insurance. D. Conversion rights without cvidence of insurability must be offered. - Correct answer-A group may exist for the purpose of purchasing insurance 17. When a producer collects the initial premium and issues a conditional receipt, the receipt A. May allow life insurance companies to start coverage before policy delivery. B. Guarantees that a policy will be issued. C. Allows the application to be completed during the initial interview. D. Waives the contestable period if all questions on the application are answered. - Correct answer-may allow life insurance companies to start coverage before policy delivery 18. The law of large numbers allows an insurance company to predict the expected losses among A. The insureds of a particular insurer. B. Members of a group of individuals with similar risks. C. Individual with similar health conditions. D. Members of a fraternal benefit society. - Correct answer-members of a group of individuals with similar risks 19. If an insurer's legal reserve funds are found to be less than the minimum required by law, the insurer is considered A. Insolvent. B. Solvent. C. Unauthorized. D. Fraudulent. - Correct answer-Insolvent 20. Which type of policy would be suitable to protect the balance of a home mortgage? A. Universal life B. Level term C. Whole life D. Decreasing term - Correct answerDecreasing term 21. When must insurable interest exist? A. At the time of application B. When death proceeds become payable C. When policy ownership is transferred D. If cash values are borrowed - Correct answer-At the time of application 22. The rider that provides for partial payment of the death benefit in advance to help with nursing or convalescent home expenses is the A. Disability income. B. Long-term care. C. Guaranteed insurability. D. Cost of living. - Correct answer-long term care 23. Which annuity payout options guarantees the return of all the principal invested in the contract? A. Life annuity with period certain B. Joint and survivorship life annuity C. Straight life annuity D. Refund life annuity - Correct answer-refund life annuity 24. Which of the following statements is NOT true about participating policies? A. They pay dividends to policyowners. B. They have an intentional overcharge of premium. C. They pay dividends to stockholders. D. They are commonly issued by mutual insurers. - Correct answer-they pay dividends to stockholders 25. Insurance contracts are based upon a doctrine which requires all parties to the contract to be honest. This is known as the doctrine of A. Indemnity. B. Utmost good faith. C. Reasonable expectations. D. Legal purpose. - Correct answer-utmost good faith 26. According to the California Insurance Code, life-only producers must keep records of their transactions for at least A. 12 months. B. 3 years. C. 5 years. D. 7 years. - Correct answer-5 years 27. Which of these is NOT an element of a legal contract? A. Offer and Acceptance B. Consideration C. Competent Parties D. Unilateral - Correct answer-Unilateral 28. Which statement is INCORRECT about a fixed annuity? A. Premiums are invested in the general account. B. Interest rates are guaranteed. C. Income payments vary from month to month. D. Insurer assumes the investment risk. - Correct answer-income payments vary month to month 29. In a group policy, the employer receives A. Entire contract. B. Executive contract. C. Master contract. D. Explanation of benefits. - Correct answer-master contract 30. The risk of a loss to an insurance company is also referred to as a/an A. Exposure. B. Hazard. C. Peril. D. Adverse selection. - Correct answer-exposure 31. With a modified premium whole life contract, premium payments are A. The same for the life of the contract. B. Higher in the early years of the contract. C. Lower in the early years of the contract. D. Variable during the life of the contract - Correct answerlower in the early years of the contract 32. If a misstatement of age is discovered during the processing of a life insurance claim, the insurer will A. Rescind the policy. B. Adjust the death benefit. C. Automatically pay the death benefit. D. Return all premiums paid. - Correct answer-adjust the death benefit 33. The pay-in time for deferred annuities is known as the A. Annuity period. B. Accumulation period. C. Installment period. D. Payment period. - Correct answeraccumulation period 34. Statements made by an applicant on an application for insurance are considered to be A. Absolute. B. Representations. C. Warranties. D. Implied. - Correct answerrepresentations 35. The cause of a loss is known as a/an A. Peril. B. Exposure. C. Hazard. D. Indemnity. - Correct answer-peril 36. When a producer, broker, or solicitor handles premiums for an insurer, they are acting in which of the following capacities? A. Managing General Agent (MGA) B. Legal representative with power of attorney C. Natural person under the code D. Fiduciary - Correct answer-fiduciary 37. What is the risk classification for those who are insurable but have a higher than average risk? A. Standard B. Preferred C. Substandard D. Declined - Correct answersubstandard 38. The option that pays a specified amount to the annuitant with no remaining value payable to a beneficiary is A. Fixed period. B. Fixed amount. C. Life only. D. Period certain. - Correct answer-life only 39. Money borrowed from a life insurance policy's cash value is A. Taxed on a last-in first-out basis. B. Taxed if the insured is terminally ill. C. Fully taxable. D. Not taxable. - Correct answer-not taxable 40. An insured who submits a fraudulent claim to an insurer is an example of a/an A. Moral hazard. B. Morale hazard. C. Peril. D. Adverse selection. - Correct answer-moral hazard 41. Selling which of the following polices would require a license issued by FINRA? A. Variable universal life B. Convertible term C. Universal life D. Interest sensitive whole life - Correct answer-variable universal life 42. The transfer of a possible financial loss to another party refers to A. Insurance. B. Peril. C. Indemnity. D. Risk. - Correct answer-insurance 43. The type of whole life insurance where premiums are payable over the whole life of the A. Limited pay whole life. B. Convertible life. C. Ordinary (straight) life. D. Single premium whole life. - Correct answer-Ordinary straight life 44. Which of the following is NOT a risk management technique? A. Avoidance B. Retention C. Exposure D. Transfer - Correct answer-exposure 45. Social Security benefits do NOT include A. Survivor. B. Retirement. C. Disability Income. D. Workers Compensation. - Correct answer-workers compensation 46. To be insurable, a risk must NOT be A. Due to chance. B. Definite and measurable. C. Catastrophic. D. Predictable. - Correct answer-catastrophic 47. A life insurance death benefit paid in a lump sum to a beneficiary is A. Not subject to any taxes. B. Not subject to estate taxes. C. Subject to federal taxes only. D. Subject to federal, state, and estate taxes. - Correct answer-not subject to any taxes 48. Two business partners own life insurance on each other. If one partner dies which contract will allow the surviving partner to use the death benefit to purchase the deceased's business interests? A. Buy-sell agreement B. Key employee life insurance C. Survivorship life insurance D. Joint and survivorship annuity - Correct answer-buysell agreement 49. The type of policy that can be changed from one that does not have cash value to one that does is a A. Convertible term policy. B. Variable annuity. C. Whole life policy. D. Renewable term policy. - Correct answer-convertible term policy 50. Which document describes the specific features and elements of a policy? A. Policy summary B. Illustrations C. Personal contract D. Conditional receipt - Correct answerpolicy summary 51. The attempt that an insurer makes to keep its existing insurance policy in force after receipt of a notice of replacement from another company is called A. Conservation. B. Estoppel. C. Controlled business. D. Twisting. - Correct answer-conservation 52. A private and civil wrong for which a remedy may be sought through legal action is known as a A. Legal purpose. B. Tort. C. Warranty. D. Contract. - Correct answer-tort 53. If an annuitant dies before the annuitization period, what proceeds will the beneficiary receive? A. Accumulation value minus the surrender charge B. Premiums paid into the annuity account C. Accumulation value or the premiums paid, whichever is greater D. The surrender value of the annuity transact - Correct answer-accumulation value or the premiums paid, whichever is greater 54. Life-only agents may transact all of the following types of insurance EXCEPT A. 24- hour care coverage. B. Disability income. C. Annuities. D. Endowments. - Correct answer-24/hour care coverage 55. Which of the following is NOT a characteristic of the Accelerated Benefit (living needs) A. Provides carly payment of a portion B. Insured must be diagnosed C. Reduces the amount of the policy proceeds of the death benefit with a terminal illness D. Charged for living needs - Correct answer-Charged for living needs