PRIMERICA LIFE INSURANCE
CERTIFICATION REVIEW 2026
QUESTIONS WITH SOLUTIONS TESTED
QUESTIONS.
■ 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. Answer- 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. Answer- 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. Answer- A.
handling insurer funds in a trust capacity
an agents fiduciary responsibility includes handling insurer funds in a
trust capacity
■ the authority granted to an agent through the agent's contract is
referred to as
a. absolute authority
b. express authority
c. apparent authority
d. implied authority. Answer- B. express authority
,express powers are written into the contract between the insurer and
the agent
■ insurance policies are not drawn up though negotiations, and an
insured has little to say about its provisions. what contract
characteristic does this describe?
a. unilateral
b. conditional
c. personal
d. adhesion. Answer- D. adhesion
a contract of adhesion is prepared by only the insurer; the insured's
only option is to accept or reject the policy as its written
■ which of the following insurers are owned by stockholders who
have the usual rights of ownership, including the right of voting?
a. reciprocal
b. fraternal
c. stock
d. mutual. Answer- C. stock
only stock insurance companies are owned and controlled by
stockholders
, ■ which of the following best describes the concept that the insured
pays a small amount of premium for a large amount of risk on the part
of the insurance company?
a. subrogation
b. warranty
c. aleatory
d. adhesion. Answer- C. aleatory
an insurance contract is an aleatory contract in that it requires a
relatively small amount of premium for a large risk
■ When an insured makes truthful statements on the application for
insurance and pays the required premium, it is known as which of the
following?
a. legal purpose
b. contract of adhesion
c. acceptance
d. consideration. Answer- D. consideration
consideration is something of value that each party gives to the other.
The consideration on the part of the insured is the payment of
premium and the representations made in the application
■ which of the following would qualify as a competent party in an
insurance contract?
CERTIFICATION REVIEW 2026
QUESTIONS WITH SOLUTIONS TESTED
QUESTIONS.
■ 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. Answer- 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. Answer- 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. Answer- A.
handling insurer funds in a trust capacity
an agents fiduciary responsibility includes handling insurer funds in a
trust capacity
■ the authority granted to an agent through the agent's contract is
referred to as
a. absolute authority
b. express authority
c. apparent authority
d. implied authority. Answer- B. express authority
,express powers are written into the contract between the insurer and
the agent
■ insurance policies are not drawn up though negotiations, and an
insured has little to say about its provisions. what contract
characteristic does this describe?
a. unilateral
b. conditional
c. personal
d. adhesion. Answer- D. adhesion
a contract of adhesion is prepared by only the insurer; the insured's
only option is to accept or reject the policy as its written
■ which of the following insurers are owned by stockholders who
have the usual rights of ownership, including the right of voting?
a. reciprocal
b. fraternal
c. stock
d. mutual. Answer- C. stock
only stock insurance companies are owned and controlled by
stockholders
, ■ which of the following best describes the concept that the insured
pays a small amount of premium for a large amount of risk on the part
of the insurance company?
a. subrogation
b. warranty
c. aleatory
d. adhesion. Answer- C. aleatory
an insurance contract is an aleatory contract in that it requires a
relatively small amount of premium for a large risk
■ When an insured makes truthful statements on the application for
insurance and pays the required premium, it is known as which of the
following?
a. legal purpose
b. contract of adhesion
c. acceptance
d. consideration. Answer- D. consideration
consideration is something of value that each party gives to the other.
The consideration on the part of the insured is the payment of
premium and the representations made in the application
■ which of the following would qualify as a competent party in an
insurance contract?
