PRIMERICA PRACTICE EXAM TEST A 75 HIGH-
YIELD LIFE INSURANCE, MUTUAL FUNDS, AND
CLIENT NEEDS ANALYSIS SUMMARY 2026
◉ If an insurer issued a policy based on the application that had
unanswered questions, which of the following will be TRUE?
a) The insurer may deny coverage later, because of the information
missing on the application.
b) The policy will be interpreted as if the insurer waived its right to
have an answer on the application.
c) The policy will be interpreted as if the insured did not have an
answer to the question.
d) The policy will be void.
Answer: The policy will be interpreted as if the insurer waived its
right to have an answer on the application
◉ Who is a third-party owner?
a) An insurer who issues a policy for two people
b) An employee in a group policy
c) An irrevocable beneficiary
d) A policyowner who is not the insured.
Answer: A policy owner who is not the insured
,◉ Which is TRUE about the cash surrender nonforfeiture option?
a) Funds exceeding the premium paid are taxable as ordinary
income.
b) After the cash surrender, the insured is covered for a grace period
of 1 month.
c) The policy remains active for some time after the policyholder
opts for cash surrender.
d) The policyholder receives the original cash value of the policy..
Answer: Funds exceeding the premium paid are taxable as ordinary
income
◉ According to the Entire Contract provision, a policy must contain
a) A declarations page with a summary of insureds.
b) Buyer's guide to life insurance.
c) Listing of the insured's former insurer(s) for incontestability
provisions.
d) A copy of the original application for insurance.
Answer: A copy of the original application for insurance
◉ All of the following are general requirements of a qualified plan
EXCEPT
a) The plan must be communicated to all employees.
,b) The plan must be for the exclusive benefits of the employees and
their beneficiaries.
c) The plan must be permanent, written and legally binding.
d) The plan must provide an offset for social security benefits..
Answer: The plan must provide an offset for social security benefits
◉ An insured purchased a Life Insurance policy. The agent told him
that depending upon the company's investments and expense
factors, the cash values could change from those shown in the policy
at issue time. The policy is a/an
a) Credit Life.
b) Annual Renewable Term.
c) Adjustable Life.
d) Interest-sensitive Whole Life..
Answer: Interest-sensitive Whole Life
◉ Which of the following best describes what the annuity period is?
a) The period of time from the accumulation period to the
annuitization period
b) The period of time during which money is accumulated in an
annuity
c) The period of time from the effective date of the contract to the
date of its termination
, d) The period of time during which accumulated money is converted
into income payments.
Answer: The period of time during which accumulated money is
converted into income payments
◉ What is the purpose of a fixed-period settlement option?
a) To provide a guaranteed income for life
b) To provide a guaranteed amount of money each month
c) To provide a guaranteed income for a certain amount of time
d) To settle the insurance company's liability.
Answer: To provide a guaranteed income for a certain amount of
time.
◉ An insured purchased a 10-year level term life policy that is
guaranteed renewable and convertible. What happens at the end of
the 10-year term?
a) The insured must provide evidence of insurability to renew the
policy.
b) The insured may only convert the policy to another term policy.
c) The insured may renew the policy for another 10 years at the
same premium rate.
d) The insured may renew the policy for another 10 years, but at a
higher premium rate..
YIELD LIFE INSURANCE, MUTUAL FUNDS, AND
CLIENT NEEDS ANALYSIS SUMMARY 2026
◉ If an insurer issued a policy based on the application that had
unanswered questions, which of the following will be TRUE?
a) The insurer may deny coverage later, because of the information
missing on the application.
b) The policy will be interpreted as if the insurer waived its right to
have an answer on the application.
c) The policy will be interpreted as if the insured did not have an
answer to the question.
d) The policy will be void.
Answer: The policy will be interpreted as if the insurer waived its
right to have an answer on the application
◉ Who is a third-party owner?
a) An insurer who issues a policy for two people
b) An employee in a group policy
c) An irrevocable beneficiary
d) A policyowner who is not the insured.
Answer: A policy owner who is not the insured
,◉ Which is TRUE about the cash surrender nonforfeiture option?
a) Funds exceeding the premium paid are taxable as ordinary
income.
b) After the cash surrender, the insured is covered for a grace period
of 1 month.
c) The policy remains active for some time after the policyholder
opts for cash surrender.
d) The policyholder receives the original cash value of the policy..
Answer: Funds exceeding the premium paid are taxable as ordinary
income
◉ According to the Entire Contract provision, a policy must contain
a) A declarations page with a summary of insureds.
b) Buyer's guide to life insurance.
c) Listing of the insured's former insurer(s) for incontestability
provisions.
d) A copy of the original application for insurance.
Answer: A copy of the original application for insurance
◉ All of the following are general requirements of a qualified plan
EXCEPT
a) The plan must be communicated to all employees.
,b) The plan must be for the exclusive benefits of the employees and
their beneficiaries.
c) The plan must be permanent, written and legally binding.
d) The plan must provide an offset for social security benefits..
Answer: The plan must provide an offset for social security benefits
◉ An insured purchased a Life Insurance policy. The agent told him
that depending upon the company's investments and expense
factors, the cash values could change from those shown in the policy
at issue time. The policy is a/an
a) Credit Life.
b) Annual Renewable Term.
c) Adjustable Life.
d) Interest-sensitive Whole Life..
Answer: Interest-sensitive Whole Life
◉ Which of the following best describes what the annuity period is?
a) The period of time from the accumulation period to the
annuitization period
b) The period of time during which money is accumulated in an
annuity
c) The period of time from the effective date of the contract to the
date of its termination
, d) The period of time during which accumulated money is converted
into income payments.
Answer: The period of time during which accumulated money is
converted into income payments
◉ What is the purpose of a fixed-period settlement option?
a) To provide a guaranteed income for life
b) To provide a guaranteed amount of money each month
c) To provide a guaranteed income for a certain amount of time
d) To settle the insurance company's liability.
Answer: To provide a guaranteed income for a certain amount of
time.
◉ An insured purchased a 10-year level term life policy that is
guaranteed renewable and convertible. What happens at the end of
the 10-year term?
a) The insured must provide evidence of insurability to renew the
policy.
b) The insured may only convert the policy to another term policy.
c) The insured may renew the policy for another 10 years at the
same premium rate.
d) The insured may renew the policy for another 10 years, but at a
higher premium rate..
