PRIMERICA LIFE INSURANCE
EXAM Multiple Choices Questions
Latest 2025/2026 with Correct
Answers
An insured purchased an insurance policy 5 years ago. Last year, she
received a dividend check from the insurance company that was not
taxable. This year, she did not receive a check from the insurer. From
what type of insurer did the insured purchase the policy?
a. mutual
b. reciprocal
c. nonprofit service organization
d. stock - ANS - A. mutual
funds not paid out after paying claims and other operating costs are
returned to the policy owners in the form of a dividend. if all funds are
paid out, no dividends are paid
Following a career change, an insured is no longer required to perform
many physical activities, so he has implemented a program where he
walks and jogs for 45 minutes each morning. The insured has also
eliminated most fatty foods from his diet. Which method of dealing with
risk does this scenario describe?
,a. retention
b. reduction
c. transfer
d. avoidance - ANS - B. reduction
the insured's change in lifestyle and habits would likely reduce the
chances of health problems
In insurance, an offer is usually made when
a. an applicant submits an application to the insurer
b. the insurer approves the application and receives the initial premium
c. the agent hands the policy to the policyholder
d. an agent explains a policy to a potential applicant - ANS - A. an
applicant submits an application to the insurer
in insurance, the offer is usually made by the applicant in the form of an
application. acceptance takes place when an insurer's underwriter
approves the application and issues a policy
the causes of loss insured against in an insurance policy are known as
a. perils
b. losses
c. risks
,d. hazards - ANS - A. perils
perils are the causes of loss insured against in an insurance policy
what documentation grants express authority to an agent?
a. agents contract with the principal
b. agents insurance license
c. fiduciary contract
d. state provisions - ANS - A. agents contract with the principal
the principal grants authority to an agent through the agent's contract
which of the following best describes an insurance company that has
been formed under the laws of this state?
a. domestic
b. sovereign
c. alien
d. foreign - ANS - A. domestic
a company is domestic when doing business within the state in which it
is incorporated
, which of the following factors is NOT considered by an underwriter when
determining the premium rates for an individual seeking insurance?
a. medical history
b. sex
c. age
d. race - ANS - D. race
age, medical history, and sex provide sound statistical date for
determining the probability of loss. Race, religion, sexual orientation, etc.
are the factors that cannot be used because there is not sound statistical
data to show that they effect the probability of loss; therefore, they are
considered to be discriminatory
in insurance transactions, fiduciary responsibility means
a. handling insurer funds in a trust capacity
b. maintaining good credit record
c. being liable with respect to payment of claims
d. commingling premiums with agents personal funds - ANS - A. handling
insurer funds in a trust capacity
an agents fiduciary responsibility includes handling insurer funds in a
trust capacity
EXAM Multiple Choices Questions
Latest 2025/2026 with Correct
Answers
An insured purchased an insurance policy 5 years ago. Last year, she
received a dividend check from the insurance company that was not
taxable. This year, she did not receive a check from the insurer. From
what type of insurer did the insured purchase the policy?
a. mutual
b. reciprocal
c. nonprofit service organization
d. stock - ANS - A. mutual
funds not paid out after paying claims and other operating costs are
returned to the policy owners in the form of a dividend. if all funds are
paid out, no dividends are paid
Following a career change, an insured is no longer required to perform
many physical activities, so he has implemented a program where he
walks and jogs for 45 minutes each morning. The insured has also
eliminated most fatty foods from his diet. Which method of dealing with
risk does this scenario describe?
,a. retention
b. reduction
c. transfer
d. avoidance - ANS - B. reduction
the insured's change in lifestyle and habits would likely reduce the
chances of health problems
In insurance, an offer is usually made when
a. an applicant submits an application to the insurer
b. the insurer approves the application and receives the initial premium
c. the agent hands the policy to the policyholder
d. an agent explains a policy to a potential applicant - ANS - A. an
applicant submits an application to the insurer
in insurance, the offer is usually made by the applicant in the form of an
application. acceptance takes place when an insurer's underwriter
approves the application and issues a policy
the causes of loss insured against in an insurance policy are known as
a. perils
b. losses
c. risks
,d. hazards - ANS - A. perils
perils are the causes of loss insured against in an insurance policy
what documentation grants express authority to an agent?
a. agents contract with the principal
b. agents insurance license
c. fiduciary contract
d. state provisions - ANS - A. agents contract with the principal
the principal grants authority to an agent through the agent's contract
which of the following best describes an insurance company that has
been formed under the laws of this state?
a. domestic
b. sovereign
c. alien
d. foreign - ANS - A. domestic
a company is domestic when doing business within the state in which it
is incorporated
, which of the following factors is NOT considered by an underwriter when
determining the premium rates for an individual seeking insurance?
a. medical history
b. sex
c. age
d. race - ANS - D. race
age, medical history, and sex provide sound statistical date for
determining the probability of loss. Race, religion, sexual orientation, etc.
are the factors that cannot be used because there is not sound statistical
data to show that they effect the probability of loss; therefore, they are
considered to be discriminatory
in insurance transactions, fiduciary responsibility means
a. handling insurer funds in a trust capacity
b. maintaining good credit record
c. being liable with respect to payment of claims
d. commingling premiums with agents personal funds - ANS - A. handling
insurer funds in a trust capacity
an agents fiduciary responsibility includes handling insurer funds in a
trust capacity
