PRIMERICA PRACTICE EXAM TEST A 75
COMPREHENSIVE FINANCIAL SERVICES STUDY
GUIDE 2026
◉ 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.
Answer: 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.
Answer: 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.
Answer: 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.
Answer: 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.
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
COMPREHENSIVE FINANCIAL SERVICES STUDY
GUIDE 2026
◉ 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.
Answer: 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.
Answer: 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.
Answer: 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.
Answer: 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.
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
