PRIMERICA LIFE INSURANCE EXAM questions and answers well illustrated.

PRIMERICA LIFE INSURANCE EXAM questions and answers well illustrated. 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 - correct answers.A. mutual funds not paid out after paying claims and other operating costs are returned to the policy owners in the form of a dividend. if all funds are paid out, no dividends are paid Following a career change, an insured is no longer required to perform many physical activities, so he has implemented a program where he walks and jogs for 45 minutes each morning. The insured has also eliminated most fatty foods from his diet. Which method of dealing with risk does this scenario describe? a. retention b. reduction c. transfer d. avoidance - correct answers.B. reduction the insured's change in lifestyle and habits would likely reduce the chances of health problems In insurance, an offer is usually made when a. an applicant submits an application to the insurer 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 - correct answers.A. an applicant submits an application to the insurer in insurance, the offer is usually made by the applicant in the form of an application. acceptance takes place when an insurer's underwriter approves the application and issues a policy the causes of loss insured against in an insurance policy are known as a. perils b. losses c. risks d. hazards - correct answers.A. perils perils are the causes of loss insured against in an insurance policy what documentation grants express authority to an agent? a. agents contract with the principal b. agents insurance license c. fiduciary contract d. state provisions - correct answers.A. agents contract with the principal the principal grants authority to an agent through the agent's contract which of the following best describes an insurance company that has been formed under the laws of this state? a. domestic b. sovereign c. alien d. foreign - correct answers.A. domestic a company is domestic when doing business within the state in which it is incorporated which of the following factors is NOT considered by an underwriter when determining the premium rates for an individual seeking insurance? a. medical history b. sex c. age d. race - correct answers.D. race age, medical history, and sex provide sound statistical date for determining the probability of loss. Race, religion, sexual orientation, etc. are the factors that cannot be used because there is not sound statistical data to show that they effect the probability of loss; therefore, they are considered to be discriminatory in insurance transactions, fiduciary responsibility means a. handling insurer funds in a trust capacity b. maintaining good credit record c. being liable with respect to payment of claims d. commingling premiums with agents personal funds - correct answers.A. handling insurer funds in a trust capacity an agents fiduciary responsibility includes handling insurer funds in a trust capacity the authority granted to an agent through the agent's contract is referred to as a. absolute authority b. express authority c. apparent authority d. implied authority - correct answers.B. express authority express powers are written into the contract between the insurer and the agent insurance policies are not drawn up though negotiations, and an insured has little to say about its provisions. what contract characteristic does this describe? a. unilateral b. conditional c. personal d. adhesion - correct answers.D. adhesion a contract of adhesion is prepared by only the insurer; the insured's only option is to accept or reject the policy as its written which of the following insurers are owned by stockholders who have the usual rights of ownership, including the right of voting? a. reciprocal b. fraternal