Primerica - Exam test Questions with complete Answers 2023

Primerica - Exam test Questions with complete Answers 2023 An insurer has made all of the decisions regarding the provisions included in the insured's policy. The insured finds an objectionable provision and wants to negotiate it with the insurer but is not allowed to do so. Her only options are to reject the policy or accept it as is. Which contract feature does this describe? a) Unilateral b) Conditional c) Personal d) Adhesion Adhesion An insurance policy that only requires a payment of premium at its inception, provides insurance protection for the life of the insured, and matures at the insured's age 100 is called a) Modified Endowment Contract (MEC). b) Level term life. c) Graded premium whole life. d) Single premium whole life. Single Premium Whole Life All of the following are true regarding a decreasing term policy EXCEPT a) The payable premium amount steadily declines throughout the duration of the contract. b) It has a lower premium than level term. c) The contract pays only in the event of death during the term and there is no cash value. d) The face amount steadily declines throughout the duration of the contract. The payable premium amount steadily declines throughout the duration of the contract The type of policy that can be changed from one that does not accumulate cash value to the one that does, is a a) Decreasing Term Policy. b) Whole Life Policy. c) Convertible Term Policy. d) Renewable Term Policy. Convertible Term Policy The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change? a) The death benefit can be increased by providing evidence of insurability. b) The death benefit cannot be increased. c) The death benefit can be increased only when the policy has developed a cash value. d) The death benefit can be increased only by exchanging the existing policy for a new one. The death benefit can be increased by providing evidence of insurability When would a 20-pay whole life policy endow? a) After 20 payments b) In 20 years c) When the insured reaches age 100 d) At the insured's age 65 When the insured reaches age 100 An insured had a $10,000 term life policy. The annual premium of $200 was due on February 1; however, the insured failed to pay the premium. He died on February 28. How much would the beneficiary receive from the policy? a) $0 b) $200 c) $9,800 d) $10,000 $9,800 What is the term for how frequently a policyowner is required to pay the policy premium? a) Consideration b) Mode c) Schedule d) Grace period Mode Which of the following types of insurance policies would perform the function of cash accumulation? a) Increasing term b) Whole life c) Term life d) Credit life Whole Life Which of the following is called a "second-to-die" policy? a) Juvenile life b) Joint life c) Survivorship life d) Family income Survivorship Life When a life insurance policy is cancelled and the insured has selected the extended term nonforfeiture option, the cash value will be used to purchase term insurance that has a face amount a) In lesser amounts for the remaining policy term of age 100. b) Equal to the cash value surrendered from the policy. c) The same as the original policy minus the cash value. d) Equal to the original policy for as long a period of time that the cash values will purchase. Equal to the original policy for as long a period of time that the cash values will purchase. Which of the following is the best reason to purchase life insurance rather than annuities? a) To liquidate a sum of money over a lifetime b) To create an estate c) To liquidate a sum of money over a period of years d) To create regular income payments To create an estate Which of the following is NOT the consideration in a policy? a) The application given to a prospective insured b) Something of value exchanged between parties c) The premium amount paid at the time of application d) The promise to pay covered losses The application given to a prospective insured 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. 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 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. 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 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. 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. 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 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 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. The insured may renew the policy for another 10 years, but at a higher premium rate. Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid a) Until the policyowner's age 65. b) For 20 years. c) Until the policyowner's age 100, when the policy matures. d) For 20 years or until death, whichever occurs first. For 20 years or until death, whichever occurs first. All of the following statements concerning an employer sponsored nonqualified retirement plan are true EXCEPT a) The employer can receive a current tax deduction for any contributions made to the plan. b) The plan is a legal method of accumulating money for retirement needs. c) The plan can discriminate as to who may participate. d) The plan is not approved for favorable tax treatment by the IRS. The employer can receive a current tax deduction for any contributions made to the plan All other factors being equal, what would the premium be like in a survivorship life policy as compared to the premium in a joint life policy? a) As high b) Half the amount c) Lower d) Higher Lower