PRIMERICA LIFE INSURANCE EXAM
PRACTICE 2025 QUESTIONS AND
ANSWERS
A producer who fails to separate premium monies from his own personal funds is guilty of ___ -
ANS commingling
explanation: it is illegal for insurance producers to commingle premiums collected from the
applicants with their own personal funds.
What is a material misrepresentation? - ANS a statement that, if discovered, would alter the
underwriting decision of the insurance company
which insurance principle states that if a policy allows for greater compensation then the
financial loss incurred, the insured may only receive benefits for the amount lost? -
ANS indemnity
explanation: the principle of indemnity stipulates that the insured can only collect for the
amount of the loss even if the policy is written with greater benefit limits.
For the reported losses of an insured group to become more likely to equal the statistical
probability of loss for their particular class, the insured group must become - ANS larger
explanation: according to the law of large numbers, the larger a group becomes, the easier it is
to predict losses. Insurers use this law in order to predict certain types of losses and set
appropriate premiums.
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@COPYRIGHT FYNDLAY 2025/2026
, If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to
the applicant no later than - ANS With the policy.
explanation: If a life insurance policy contains a free-look period of at least 10 days, the buyer's
guide can be delivered with the policy. If it doesn't, the buyer's guide must be delivered prior to
accepting the initial premium.
Who makes up the Medical Information Bureau? - ANS Insurers
explanation: The Medical Information Bureau is made up of insurers so the companies can
compare the information they have collected on a potential insured with information other
insurers may have discovered.
Whose responsibility is it to make certain that an application for insurance is filled out
completely and correctly? - ANS The producer
explanation: It is the responsibility of the producer (agent) to make sure an application for
insurance is filled out completely and correctly.
Which of the following methods of calculating the amount of life insurance needed takes into
account the insured's wages, years until retirement, and inflation? - ANS Human life value
approach (HLVA)
explanation: Human life value approach is determined by the loss of income that would result
with the death of the insured, after making adjustments for expenses, inflation, etc.
Which of the following is correct concerning the taxation of premiums in a key-person life
insurance policy? - ANS Premiums are not tax deductible as a business expense.
explanation: The business cannot take a tax deduction for the expense of the premium.
However, if the key employee dies, the benefits paid to the business are usually received tax
free.
Which of the following is a generic consumer publication that explains life insurance in general
terms in order to assist the applicant in the decision-making process? - ANS Buyer's Guide
explanation: The Buyer's Guide is a consumer publication that explains life insurance in general
terms in order to assist the applicant in the decision-making process. It is a generic guide that
2
does not address the specific policy of the insurer, instead explaining life insurance in a way
Page
that the average consumer can understand.
@COPYRIGHT FYNDLAY 2025/2026
, Why should the producer personally deliver the policy when the first premium has already been
paid? - ANS To help the insured understand all aspects of the contract
explanation: It is the producer's responsibility to make sure that the policy is understood by the
insured and all of their questions are satisfied, and the delivery receipt is signed.
Mortality - Interest + Expense = - ANS Gross premium
explanation: If "mortality" represents the cost of insured mortality, "interest" represents the
interest earned by an insurer, and "expense" (or "loading") represents company operating
costs, then the interest is subtracted from the cost of mortality, yielding the net premium, and
the loading is added to the net premium to yield the gross premium.
An underwriter is reviewing the medical questions in the application and needs further
information due to a medical situation the applicant had in the past. What will the underwriter
require? - ANS Attending Physician Statement
explanation: The APS is used to obtain medical DETAILS about a specific condition which has
shown up in the application; the insurance company orders the information directly from the
physician, using a signed authorization which was part of the application.
Based on Human Life Value Approach, which of the following is NOT used to calculate an
individual's life value? - ANS Predicted needs of the family after the insured's death.
explanation: The Human Life Value Approach to determining the value of an individual's life
requires the calculation of probable future earnings of the insured, which involves wages,
expenses, inflation, amount of time until retirement, and the time value of money. Predicted
needs of the family after the insured's death are used in the needs approach.
An individual applied for an insurance policy and paid the initial premium. The insurer issued a
conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy
is issued, what would be the policy's effective date? - ANS The date of medical exam
explanation: If the company acknowledges receipt of the premium with a conditional receipt,
the policy is in effect on the date of the application or the date of the medical exam (whichever
is later), provided that the applicant is found insurable at the rate applied for.
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Page
@COPYRIGHT FYNDLAY 2025/2026
PRACTICE 2025 QUESTIONS AND
ANSWERS
A producer who fails to separate premium monies from his own personal funds is guilty of ___ -
ANS commingling
explanation: it is illegal for insurance producers to commingle premiums collected from the
applicants with their own personal funds.
What is a material misrepresentation? - ANS a statement that, if discovered, would alter the
underwriting decision of the insurance company
which insurance principle states that if a policy allows for greater compensation then the
financial loss incurred, the insured may only receive benefits for the amount lost? -
ANS indemnity
explanation: the principle of indemnity stipulates that the insured can only collect for the
amount of the loss even if the policy is written with greater benefit limits.
For the reported losses of an insured group to become more likely to equal the statistical
probability of loss for their particular class, the insured group must become - ANS larger
explanation: according to the law of large numbers, the larger a group becomes, the easier it is
to predict losses. Insurers use this law in order to predict certain types of losses and set
appropriate premiums.
1Page
@COPYRIGHT FYNDLAY 2025/2026
, If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to
the applicant no later than - ANS With the policy.
explanation: If a life insurance policy contains a free-look period of at least 10 days, the buyer's
guide can be delivered with the policy. If it doesn't, the buyer's guide must be delivered prior to
accepting the initial premium.
Who makes up the Medical Information Bureau? - ANS Insurers
explanation: The Medical Information Bureau is made up of insurers so the companies can
compare the information they have collected on a potential insured with information other
insurers may have discovered.
Whose responsibility is it to make certain that an application for insurance is filled out
completely and correctly? - ANS The producer
explanation: It is the responsibility of the producer (agent) to make sure an application for
insurance is filled out completely and correctly.
Which of the following methods of calculating the amount of life insurance needed takes into
account the insured's wages, years until retirement, and inflation? - ANS Human life value
approach (HLVA)
explanation: Human life value approach is determined by the loss of income that would result
with the death of the insured, after making adjustments for expenses, inflation, etc.
Which of the following is correct concerning the taxation of premiums in a key-person life
insurance policy? - ANS Premiums are not tax deductible as a business expense.
explanation: The business cannot take a tax deduction for the expense of the premium.
However, if the key employee dies, the benefits paid to the business are usually received tax
free.
Which of the following is a generic consumer publication that explains life insurance in general
terms in order to assist the applicant in the decision-making process? - ANS Buyer's Guide
explanation: The Buyer's Guide is a consumer publication that explains life insurance in general
terms in order to assist the applicant in the decision-making process. It is a generic guide that
2
does not address the specific policy of the insurer, instead explaining life insurance in a way
Page
that the average consumer can understand.
@COPYRIGHT FYNDLAY 2025/2026
, Why should the producer personally deliver the policy when the first premium has already been
paid? - ANS To help the insured understand all aspects of the contract
explanation: It is the producer's responsibility to make sure that the policy is understood by the
insured and all of their questions are satisfied, and the delivery receipt is signed.
Mortality - Interest + Expense = - ANS Gross premium
explanation: If "mortality" represents the cost of insured mortality, "interest" represents the
interest earned by an insurer, and "expense" (or "loading") represents company operating
costs, then the interest is subtracted from the cost of mortality, yielding the net premium, and
the loading is added to the net premium to yield the gross premium.
An underwriter is reviewing the medical questions in the application and needs further
information due to a medical situation the applicant had in the past. What will the underwriter
require? - ANS Attending Physician Statement
explanation: The APS is used to obtain medical DETAILS about a specific condition which has
shown up in the application; the insurance company orders the information directly from the
physician, using a signed authorization which was part of the application.
Based on Human Life Value Approach, which of the following is NOT used to calculate an
individual's life value? - ANS Predicted needs of the family after the insured's death.
explanation: The Human Life Value Approach to determining the value of an individual's life
requires the calculation of probable future earnings of the insured, which involves wages,
expenses, inflation, amount of time until retirement, and the time value of money. Predicted
needs of the family after the insured's death are used in the needs approach.
An individual applied for an insurance policy and paid the initial premium. The insurer issued a
conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy
is issued, what would be the policy's effective date? - ANS The date of medical exam
explanation: If the company acknowledges receipt of the premium with a conditional receipt,
the policy is in effect on the date of the application or the date of the medical exam (whichever
is later), provided that the applicant is found insurable at the rate applied for.
3
Page
@COPYRIGHT FYNDLAY 2025/2026
