PRIMERICA LIFE INSURANCE EXAM QUESTIONS AND ANSWERS () (VERIFIED ANSWERS).pdf

PRIMERICA LIFE INSURANCE EXAM m m m




1. An insured purchased an insurance policy 5 years ago. Last year, she re
m m m m m m m m m m m m




ceived a dividend check from the insurance company that was not taxable.T
m m m m m m m m m m m m




his year, she did not receive a check from the insurer. From what type of in
m m m m m m m m m m m m m m m




surer did the insured purchase the policy?
m m m m m m




a. mutual
b. reciprocal
c. nonprofit service organizationm m




d. stock ANS A. mutual m m m




funds not paid out after paying claims and other operating costs are returned to t
m m m m m m m m m m m m m m




he policy owners in the form of a dividend. if all funds are paid out, no dividends ar
m m m m m m m m m m m m m m m m m




e paid
m




2. Following a career change, an insured is no longer required to perform
m m m m m m m m m m m m




many physical activities, so he has implemented a program where he walks
m m m m m m m m m m m m




and jogs for 45 minutes each morning. The insured has also eliminated mo
m m m m m m m m m m m m




st fatty foods from his diet. Which method of dealing with risk does this sc
m m m m m m m m m m m m m m




enario describe? m




a. retention
1m/m48

,b. reduction
c. transfer
d. avoidance ANS B. reduction m m m




the insured's change in lifestyle and habits would likely reduce the chances of
m m m m m m m m m m m m m




health problems m




3. In insurance, an offer is usually made when
m m m m m m m




a. an applicant submits an application to the insurer
m m m m m m m




b. the insurer approves the application and receives the initial premium
m m m m m m m m m




c. the agent hands the policy to the policyholder
m m m m m m m




d. an agent explains a policy to a potential applicant ANS A. an applicant su
m m m m m m m m m m m m m




bmitsan application to the insurer
m m m m m




in insurance, the offer is usually made by the applicant in the form of an application.
m m m m m m m m m m m m m m m m




acceptance takes place when an insurer's underwriter approves the application a
m m m m m m m m m m




nd issues a policy
m m m




2m/m48

,4. the causes of loss insured against in an insurance policy are known as
m m m m m m m m m m m m




a. perils
b. losses
c. risks
d. hazards ANS A. perils
m m m




perils are the causes of loss insured against in an insurance policy
m m m m m m m m m m m




5. what documentation grants express authority to an agent?
m m m m m m m




a. agents contract with the principal
m m m m




b. agents insurance license
m m




c. fiduciary contract m




d. state provisions ANS A. agents contract with the principal
m m m m m m m m




the principal grants authority to an agent through the agent's contract
m m m m m m m m m m




6. which of the following best describes an insurance company that has been
m m m m m m m m m m m m




formed under the laws of this state?
m m m m m m




a. domestic
b. sovereign
c. alien
d. foreign ANS A. domestic
m m m




3m/m48

, a company is domestic when doing business within the state in which it is incor-
m m m m m m m m m m m m m m




porated
m




7. which of the following factors is NOT considered by an underwriter when
m m m m m m m m m m m m




determining the premium rates for an individual seeking insurance?
m m m m m m m m




a. medical history m




b. sex
c. age
d. race ANS D. race
m m m




age, medical history, and sex provide sound statistical date for determining the pr
m m m m m m m m m m m m




obability of loss. Race, religion, sexual orientation, etc. are the factors that cannotbe
m m m m m m m m m m m m m




m used because there is not sound statistical data to show that they effect the prob
m m m m m m m m m m m m m m




ability of loss; therefore, they are considered to be discriminatory
m m m m m m m m m




4m/m48