Primerica Life Insurance License exam 2023 with 100% correct answers

Which law is the foundation of statistical prediction of loss upon which rates for insurance are calculated? A) Law of Group Evaluation B) Law of Large Numbers C) Law of Masses D) Law of Averages B) Law of Large Numbers A producer who fails to segregate premium monies from his own personal funds is guilty of: A) Theft B) Commingling C) Larceny D) Embezzlement B) Commingling In insurance, an offer is usually made when: A) The completed application is submitted. 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. A) The completed application is submitted. An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy? A) Mutual B) Reciprocal C) Nonprofit service organization D) Stock A) Mutual Which of the following insurance options would be considered a risk-sharing arrangement? A) Stock B) Mutual C) Surplus Lines D) Reciprocal D) Reciprocal On a participating insurance policy issued by a mutual insurance company, dividends paid to policy holders are: A) Guaranteed B) Not taxable since the IRS treats them as a return of a portion of the premium paid. C) Paid at a fixed rate every year. D) Taxable as ordinary income. B) Not taxable since the IRS treats them as a return of a portion of the premium paid.