Primerica Life Insurance Exam | Primerica Life
Insurance Licensing Study Guide & Exam Prep
2026/2027 | Life Insurance Producer Exam Review,
Insurance Fundamentals, Policy Types, Policy
Provisions, Underwriting, Risk Management,
Beneficiaries, Premiums, Annuities, Taxation,
Agency Law, Ethics, State Insurance Regulations,
Practice Questions, Answers & Detailed Rationales
Question 1: What is the foundational financial philosophy that Primerica
promotes to its clients?
A. Buy Permanent and Retire Early
B. Buy Term and Invest the Difference
C. Buy Whole Life and Borrow Against It
D. Buy Variable Life and Maximize Cash Value
CORRECT ANSWER: B. Buy Term and Invest the Difference
Rationale: Primerica's core philosophy is "Buy Term and Invest the Difference." This
strategy advocates for purchasing affordable term life insurance to cover the family's
protection needs during the working years and investing the savings from lower
premiums into separate investment vehicles to build wealth for retirement .
Question 2: Primerica primarily offers which type of life insurance product to
meet the needs of middle-income families?
A. Whole Life Insurance
B. Variable Universal Life Insurance
C. Term Life Insurance
D. Indexed Universal Life Insurance
CORRECT ANSWER: C. Term Life Insurance
Rationale: Primerica focuses on providing term life insurance, which it considers the
best option for most families. The company believes term life insurance is a way to "buy
time" until a family accumulates sufficient savings, rather than a permanent part of a
financial program .
Question 3: Which organization has affirmed Primerica Life Insurance
Company's Financial Strength Rating as A+ (Superior)?
A. Standard & Poor's (S&P)
B. Moody's Investors Service
C. A.M. Best
D. Fitch Ratings
CORRECT ANSWER: C. A.M. Best
,Rationale: A.M. Best has affirmed the Financial Strength Rating of A+ (Superior) for
Primerica Life Insurance Company and its affiliates. This rating indicates a superior
ability to meet its ongoing insurance obligations .
Question 4: What is the maximum level premium term period available on
some Primerica life insurance policies?
A. 20 years
B. 25 years
C. 30 years
D. 35 years
CORRECT ANSWER: D. 35 years
Rationale: Primerica distinguishes itself in the market by offering term life insurance
policies with level premiums for up to 35 years. This is longer than the 30-year
maximum offered by most other life insurance companies .
Question 5: In the context of risk classification, which class is considered
representative of the majority of applicants and is considered average risk?
A. Preferred
B. Standard
C. Substandard
D. Select
CORRECT ANSWER: B. Standard
Rationale: The standard risk classification is representative of the majority of people in
the same age group with similar lifestyles. It is considered an average risk and does not
require an extra rating .
Question 6: For a Primerica TermNow policy, what is the minimum coverage
amount for an applicant who may qualify for the 'Select' insurance class?
A. $15,000
B. $50,000
C. $100,000
D. $150,000
CORRECT ANSWER: D. $150,000
Rationale: The eligibility guidelines for the TermNow product specify that the minimum
coverage amount for the 'Select' insurance class is $150,000 .
Question 7: What type of underwriting process is primarily used for
Primerica's TermNow product?
A. Full paramedical examination
B. Automated and streamlined underwriting
,C. Attending Physician Statement (APS)
D. In-person nurse visit
CORRECT ANSWER: B. Automated and streamlined underwriting
Rationale: The TermNow product uses a "Rapid Issue" process that involves an
automated and streamlined underwriting system. This process utilizes electronic data
reports like MIB, MVR, and prescription history instead of traditional oral fluid testing
for many applicants .
Question 8: What is the purpose of the waiver of premium rider offered by
Primerica?
A. To increase the death benefit by 10% annually.
B. To waive future premium payments if the insured becomes totally disabled.
C. To provide a living benefit for chronic illness.
D. To convert the term policy to a permanent policy.
CORRECT ANSWER: B. To waive future premium payments if the insured
becomes totally disabled.
Rationale: A waiver of premium rider typically allows the insured to pause premium
payments if they become totally disabled and unable to work, ensuring the policy
remains in force without further premium payments during the disability period .
Question 9: Under a Primerica term life insurance policy, what happens to the
coverage if the insured dies after the level premium term period has ended?
A. The beneficiaries receive a reduced death benefit.
B. The beneficiaries receive the full death benefit.
C. The beneficiaries would not receive a payout.
D. The beneficiaries receive a payout equal to the premiums paid.
CORRECT ANSWER: C. The beneficiaries would not receive a payout.
Rationale: Term life insurance provides coverage for a specific period of time. If the
insured dies after the term has expired and the policy has not been renewed, the
coverage ceases, and no death benefit is paid to the beneficiaries .
Question 10: What is the main distinction between Primerica's Custom
Advantage policy and its TermNow policy?
A. Custom Advantage requires no medical exam.
B. Custom Advantage uses a traditional underwriting process with a paramedical exam.
C. Custom Advantage has lower maximum face amounts.
D. Custom Advantage is only available in New York.
CORRECT ANSWER: B. Custom Advantage uses a traditional underwriting
process with a paramedical exam.
, Rationale: The Custom Advantage product is designed for applicants who go through
traditional underwriting, which typically includes a paramedical exam and blood/urine
testing. In contrast, the TermNow product often uses a simplified underwriting process .
Question 11: Which of the following best describes the 'Terminal Illness Rider'
offered by Primerica?
A. It provides a loan from the policy's cash value.
B. It provides an advance of a portion of the death benefit if the insured is diagnosed
with a terminal illness.
C. It doubles the death benefit if death is caused by an accident.
D. It allows the policyowner to change the beneficiary.
CORRECT ANSWER: B. It provides an advance of a portion of the death benefit
if the insured is diagnosed with a terminal illness.
Rationale: The terminal illness rider is a living benefits rider that provides an advance on
the death benefit while the insured is still living. This benefit is triggered upon diagnosis
of a terminal illness .
Question 12: Primerica's term life insurance policies are generally designed to
be:
A. Complex and difficult to understand.
B. Easily understood and meet the needs of the client.
C. Investment vehicles with high cash value.
D. Only available to high-net-worth individuals.
CORRECT ANSWER: B. Easily understood and meet the needs of the client.
Rationale: The company's 10-K filing states that they design their term life insurance
products to be "easily understood by, and meet the needs of, their clients." The policies
are also written in plain language to ensure the terms are clear .
Question 13: What is the primary method Primerica uses to manage mortality
risk on its term life insurance policies?
A. Increasing premiums for all policyholders.
B. Holding large cash reserves.
C. Reinsurance.
D. Diversifying its investment portfolio.
CORRECT ANSWER: C. Reinsurance.
Rationale: Primerica uses reinsurance primarily to reduce the volatility risk associated
with mortality. The company reinsures a significant portion (between 80% and 90%) of
the mortality risk for its term life insurance policies .
Question 14: What is the total average daily amount paid in life insurance
benefits by Primerica's life insurance companies?
Insurance Licensing Study Guide & Exam Prep
2026/2027 | Life Insurance Producer Exam Review,
Insurance Fundamentals, Policy Types, Policy
Provisions, Underwriting, Risk Management,
Beneficiaries, Premiums, Annuities, Taxation,
Agency Law, Ethics, State Insurance Regulations,
Practice Questions, Answers & Detailed Rationales
Question 1: What is the foundational financial philosophy that Primerica
promotes to its clients?
A. Buy Permanent and Retire Early
B. Buy Term and Invest the Difference
C. Buy Whole Life and Borrow Against It
D. Buy Variable Life and Maximize Cash Value
CORRECT ANSWER: B. Buy Term and Invest the Difference
Rationale: Primerica's core philosophy is "Buy Term and Invest the Difference." This
strategy advocates for purchasing affordable term life insurance to cover the family's
protection needs during the working years and investing the savings from lower
premiums into separate investment vehicles to build wealth for retirement .
Question 2: Primerica primarily offers which type of life insurance product to
meet the needs of middle-income families?
A. Whole Life Insurance
B. Variable Universal Life Insurance
C. Term Life Insurance
D. Indexed Universal Life Insurance
CORRECT ANSWER: C. Term Life Insurance
Rationale: Primerica focuses on providing term life insurance, which it considers the
best option for most families. The company believes term life insurance is a way to "buy
time" until a family accumulates sufficient savings, rather than a permanent part of a
financial program .
Question 3: Which organization has affirmed Primerica Life Insurance
Company's Financial Strength Rating as A+ (Superior)?
A. Standard & Poor's (S&P)
B. Moody's Investors Service
C. A.M. Best
D. Fitch Ratings
CORRECT ANSWER: C. A.M. Best
,Rationale: A.M. Best has affirmed the Financial Strength Rating of A+ (Superior) for
Primerica Life Insurance Company and its affiliates. This rating indicates a superior
ability to meet its ongoing insurance obligations .
Question 4: What is the maximum level premium term period available on
some Primerica life insurance policies?
A. 20 years
B. 25 years
C. 30 years
D. 35 years
CORRECT ANSWER: D. 35 years
Rationale: Primerica distinguishes itself in the market by offering term life insurance
policies with level premiums for up to 35 years. This is longer than the 30-year
maximum offered by most other life insurance companies .
Question 5: In the context of risk classification, which class is considered
representative of the majority of applicants and is considered average risk?
A. Preferred
B. Standard
C. Substandard
D. Select
CORRECT ANSWER: B. Standard
Rationale: The standard risk classification is representative of the majority of people in
the same age group with similar lifestyles. It is considered an average risk and does not
require an extra rating .
Question 6: For a Primerica TermNow policy, what is the minimum coverage
amount for an applicant who may qualify for the 'Select' insurance class?
A. $15,000
B. $50,000
C. $100,000
D. $150,000
CORRECT ANSWER: D. $150,000
Rationale: The eligibility guidelines for the TermNow product specify that the minimum
coverage amount for the 'Select' insurance class is $150,000 .
Question 7: What type of underwriting process is primarily used for
Primerica's TermNow product?
A. Full paramedical examination
B. Automated and streamlined underwriting
,C. Attending Physician Statement (APS)
D. In-person nurse visit
CORRECT ANSWER: B. Automated and streamlined underwriting
Rationale: The TermNow product uses a "Rapid Issue" process that involves an
automated and streamlined underwriting system. This process utilizes electronic data
reports like MIB, MVR, and prescription history instead of traditional oral fluid testing
for many applicants .
Question 8: What is the purpose of the waiver of premium rider offered by
Primerica?
A. To increase the death benefit by 10% annually.
B. To waive future premium payments if the insured becomes totally disabled.
C. To provide a living benefit for chronic illness.
D. To convert the term policy to a permanent policy.
CORRECT ANSWER: B. To waive future premium payments if the insured
becomes totally disabled.
Rationale: A waiver of premium rider typically allows the insured to pause premium
payments if they become totally disabled and unable to work, ensuring the policy
remains in force without further premium payments during the disability period .
Question 9: Under a Primerica term life insurance policy, what happens to the
coverage if the insured dies after the level premium term period has ended?
A. The beneficiaries receive a reduced death benefit.
B. The beneficiaries receive the full death benefit.
C. The beneficiaries would not receive a payout.
D. The beneficiaries receive a payout equal to the premiums paid.
CORRECT ANSWER: C. The beneficiaries would not receive a payout.
Rationale: Term life insurance provides coverage for a specific period of time. If the
insured dies after the term has expired and the policy has not been renewed, the
coverage ceases, and no death benefit is paid to the beneficiaries .
Question 10: What is the main distinction between Primerica's Custom
Advantage policy and its TermNow policy?
A. Custom Advantage requires no medical exam.
B. Custom Advantage uses a traditional underwriting process with a paramedical exam.
C. Custom Advantage has lower maximum face amounts.
D. Custom Advantage is only available in New York.
CORRECT ANSWER: B. Custom Advantage uses a traditional underwriting
process with a paramedical exam.
, Rationale: The Custom Advantage product is designed for applicants who go through
traditional underwriting, which typically includes a paramedical exam and blood/urine
testing. In contrast, the TermNow product often uses a simplified underwriting process .
Question 11: Which of the following best describes the 'Terminal Illness Rider'
offered by Primerica?
A. It provides a loan from the policy's cash value.
B. It provides an advance of a portion of the death benefit if the insured is diagnosed
with a terminal illness.
C. It doubles the death benefit if death is caused by an accident.
D. It allows the policyowner to change the beneficiary.
CORRECT ANSWER: B. It provides an advance of a portion of the death benefit
if the insured is diagnosed with a terminal illness.
Rationale: The terminal illness rider is a living benefits rider that provides an advance on
the death benefit while the insured is still living. This benefit is triggered upon diagnosis
of a terminal illness .
Question 12: Primerica's term life insurance policies are generally designed to
be:
A. Complex and difficult to understand.
B. Easily understood and meet the needs of the client.
C. Investment vehicles with high cash value.
D. Only available to high-net-worth individuals.
CORRECT ANSWER: B. Easily understood and meet the needs of the client.
Rationale: The company's 10-K filing states that they design their term life insurance
products to be "easily understood by, and meet the needs of, their clients." The policies
are also written in plain language to ensure the terms are clear .
Question 13: What is the primary method Primerica uses to manage mortality
risk on its term life insurance policies?
A. Increasing premiums for all policyholders.
B. Holding large cash reserves.
C. Reinsurance.
D. Diversifying its investment portfolio.
CORRECT ANSWER: C. Reinsurance.
Rationale: Primerica uses reinsurance primarily to reduce the volatility risk associated
with mortality. The company reinsures a significant portion (between 80% and 90%) of
the mortality risk for its term life insurance policies .
Question 14: What is the total average daily amount paid in life insurance
benefits by Primerica's life insurance companies?
