PRIMERICA PRACTICE TEST PART 1 UPDATED
EXAM SCRIPT WITH COMPLETE ANSWERS
◉ According to the CA Insurance Code, in which if the following
classes of insurance can a binder NOT be issued?
Answer: Life Insurance or Auto Insurance
◉ An organization will cease to exist as an entity eligible to hold a
license for all of the following reasons, except:
Answer: Termination of key employee
◉ What does it mean if an agent's license is inactive?
Answer: The agent cannot transact any insurance business for which
a license is required
◉ If the Commissioner issues a Notice of Seizure for documents and
the individual fails to send those documents what is the penalty?
Answer: 1 year in jail and/or $1000 fine
◉ Which of the following must any person engaged in the business
of acting as an insurance agent or broker who receives
compensation for arranging or directing sales in connection with a
premium financing agreement do?
, Answer: Maintain a list of accounts in connection with
compensation exempted in premium financing payments for three
years.
◉ All of the following would be considered one of the three major
types of loss exposures, except:
Answer: Financial loss exposure
◉ Tony Brown has a CLU certification. Which of the following names
would be automatically approved for his agency's use?
Answer: None of these would be automatically approved
◉ A person has paid $50,000 into a fixed annuity over 20 years.
When he decides to begin income payments the insurer calculates
that he will receive $4,000 per year for life, which means that he will
receive a total of $100,000. In the first 10 years of payments how
much is taxable each year?
Answer: $2,000
◉ According to the code, all insurers must maintain a department to
investigate:
Answer: Possible fraudulent claims from insureds
EXAM SCRIPT WITH COMPLETE ANSWERS
◉ According to the CA Insurance Code, in which if the following
classes of insurance can a binder NOT be issued?
Answer: Life Insurance or Auto Insurance
◉ An organization will cease to exist as an entity eligible to hold a
license for all of the following reasons, except:
Answer: Termination of key employee
◉ What does it mean if an agent's license is inactive?
Answer: The agent cannot transact any insurance business for which
a license is required
◉ If the Commissioner issues a Notice of Seizure for documents and
the individual fails to send those documents what is the penalty?
Answer: 1 year in jail and/or $1000 fine
◉ Which of the following must any person engaged in the business
of acting as an insurance agent or broker who receives
compensation for arranging or directing sales in connection with a
premium financing agreement do?
, Answer: Maintain a list of accounts in connection with
compensation exempted in premium financing payments for three
years.
◉ All of the following would be considered one of the three major
types of loss exposures, except:
Answer: Financial loss exposure
◉ Tony Brown has a CLU certification. Which of the following names
would be automatically approved for his agency's use?
Answer: None of these would be automatically approved
◉ A person has paid $50,000 into a fixed annuity over 20 years.
When he decides to begin income payments the insurer calculates
that he will receive $4,000 per year for life, which means that he will
receive a total of $100,000. In the first 10 years of payments how
much is taxable each year?
Answer: $2,000
◉ According to the code, all insurers must maintain a department to
investigate:
Answer: Possible fraudulent claims from insureds
