PRIMERICA LIFE INSURANCE EXAM QUESTIONS AND
CORRECT ANSWERS|ACCURATE ACTUAL EXAM WITH
FREQUENTLY TESTED QUESTIONS AND STUDY GUIDE|500+
QUESTIONS|LATEST UPDATE 2025.
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
c. stock
d. mutual - CORRECT ANSWER C. stock
only stock insurance companies are owned and controlled by stockholders
which of the following best describes the concept that the insured pays a small amount of
premium for a large amount of risk on the part of the insurance company?
a. subrogation
b. warranty
c. aleatory
d. adhesion - CORRECT ANSWER C. aleatory
an insurance contract is an aleatory contract in that it requires a relatively small amount of
premium for a large risk
When an insured makes truthful statements on the application for insurance and pays the
required premium, it is known as which of the following?
a. legal purpose
b. contract of adhesion
c. acceptance
d. consideration - CORRECT ANSWER D. consideration
consideration is something of value that each party gives to the other. The consideration on the
part of the insured is the payment of premium and the representations made in the application
which of the following would qualify as a competent party in an insurance contract?
a. the applicant is intoxicated at the time of application
b. the applicant is 12 year old student
c. the applicant is under the influence of a mind-impairing medication at the time of application
d. the applicant has a prior felony conviction - CORRECT ANSWER D. the applicant has a
prior felony conviction
,when an insurer and insured enter into a contract, both parties must be legal of age and mentally
competent. It is legal for a person convicted of a felony to buy an insurance contract. An
intoxicated person, however, may not be mentally competent, a 12 year old student is considered
to be underage in most states and a person under mind-impairing medication most likely would
not be mentally competent
an insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which
of the following insurance principles has the insurer violated?
a. representation
b. adhesion
c. consideration
d. good health - CORRECT ANSWER C. consideration
the binding force in any contract is consideration. consideration on the part of the insureds the
payment of premiums and the health representations made in the application. Consideration on
the part of the insurer is the promise to pay in the even of loss
which of the following is a primary source of information used for insurance underwriting?
a. application
b. applicant interviews
c. medical records.
d. private investigations - CORRECT ANSWER A. application
the application contains most of the information used for underwriting purposes. this is why its
completeness and accurarcy are so critical
which of the following is the best reason to purchase life insurance rather than annuities?
a. to liquidate a sum of money over a period of year
b. to create regular income payments
c. to liquidate a sum money over a lifetime
d. to create an estate - CORRECT ANSWER D. to create an estate
with insurance, the death creates an immediate estate should the insured die
a producer is helping a married couple determine the financial needs of their children in the event
of one or both should die prematurely. This is a personal use of life insurance known as
a. survivorship insurance
b. juvenile protection provision
c. survivorship protection
d. life planning - CORRECT ANSWER C. survivorship protection
,life insurance can provide the funds necessary for the survivors of the insured to be able to
maintain their lifestyle in the event of the insured's death. This is known as survivor protection
a producer agent must do all of the following when delivering a new policy to the insured
EXCEPT
a. disclose commissions earned from the sale of the policy
b. explain the policy provisions, riders, and exclusions
c. collect any premium due
d. explain the rating procedures if the policy is rated differently than applied for - CORRECT
ANSWER A. disclose commissions earned fro the sale of the policy
a producer must explain policy provisions, exclusions, and riders at the time of the delivery, as
well as the rating procedures especially if the policy is rated differently than applied for. The
producer must also collect any due premium and have the insured sign the statement go
continued good health
if an applicant for a life insurance policy and person to be insured by the policy are two different
people, the underwriter would be concerned about
a. which individual will pay the premium
b. whether an insurable interest exists between the individuals
c. the gender of applicant
d. the type of policy requested - CORRECT ANSWER B. whether an insurable interest exists
between the individuals
an insurable interest must exist at the time of the policy is issued. Some relationships are
automatically presumed to qualify as an insurable interest. ex: spouses, parents, children, and
certain business relationships
When J. applied for a life insurance policy, the agent informed him that a medical exam would
be required. The exam may be completed by
a. a physician of the applicant's choice and at his expense
b. a home office underwriter
c. a paramedic or examining physician at the insurer's expense
d. the agent - CORRECT ANSWER C. a paramedic or examining physician at the insurer's
expense
the applicant may be allowed to select the physician or paramedic facility to perform the
examination. The insurer pays the cost of such an examination
The factor added to the net premium to cover the costs of the insurer in obtaining and
maintaining the business is called
a. expenses
, b. legal reserve
c. dividend accumulation
d. premium tax - CORRECT ANSWER A. expenses
loading is another term for expenses. Net premium (mortality minus interest earned) plus
expenses (or loading) equal the gross premium
which of the following methods of calculating the amount of life insurance needed takes into
account the insured's wages, years until retirement, and inflation?
a. needs approach
b. blackout approach
c. lump-sum approach
d. human life value approach - CORRECT ANSWER D. human life value approach
human life value approach is determined by the loss of the income that would result with the
death of the insured, after making adjustments for expenses, inflation, etc.
which of the following is NOT required for a producer to tell a prospect?
a. how the insurer would use any outside information regarding the applicant
b. an explanation of products that the insurer is selling
c. what requirements the producer needed to meet to obtain the insurance license
d. from what outside sources the insurer would seek information, regarding the insured -
CORRECT ANSWER C. what requirements the producer needed to meet to obtain the insurance
license
agents are required to inform prospects of the products they are selling, as well as their
information collecting practices
which of the following statements concerning buy-sell agreements is true?
a. premium paid are deductible as a business expense
b. benefits received are considered income taxable
c. buy-sell agreements pay in the event of a medical emergency
d. buy-sell agreements are normally funded with a life insurance expectancy - CORRECT
ANSWER D. buy-sell agreements are normally funded with life insurance expectancy
a buy-sell agreements is simply a contract that establishes what willl be done with a business in
the event that an owner dies. Buy-sell agreements are normally funded with a life insurance
policy
Who may complete a paramedical report?
a. an underwriter
b. a nursing assistant
CORRECT ANSWERS|ACCURATE ACTUAL EXAM WITH
FREQUENTLY TESTED QUESTIONS AND STUDY GUIDE|500+
QUESTIONS|LATEST UPDATE 2025.
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
c. stock
d. mutual - CORRECT ANSWER C. stock
only stock insurance companies are owned and controlled by stockholders
which of the following best describes the concept that the insured pays a small amount of
premium for a large amount of risk on the part of the insurance company?
a. subrogation
b. warranty
c. aleatory
d. adhesion - CORRECT ANSWER C. aleatory
an insurance contract is an aleatory contract in that it requires a relatively small amount of
premium for a large risk
When an insured makes truthful statements on the application for insurance and pays the
required premium, it is known as which of the following?
a. legal purpose
b. contract of adhesion
c. acceptance
d. consideration - CORRECT ANSWER D. consideration
consideration is something of value that each party gives to the other. The consideration on the
part of the insured is the payment of premium and the representations made in the application
which of the following would qualify as a competent party in an insurance contract?
a. the applicant is intoxicated at the time of application
b. the applicant is 12 year old student
c. the applicant is under the influence of a mind-impairing medication at the time of application
d. the applicant has a prior felony conviction - CORRECT ANSWER D. the applicant has a
prior felony conviction
,when an insurer and insured enter into a contract, both parties must be legal of age and mentally
competent. It is legal for a person convicted of a felony to buy an insurance contract. An
intoxicated person, however, may not be mentally competent, a 12 year old student is considered
to be underage in most states and a person under mind-impairing medication most likely would
not be mentally competent
an insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which
of the following insurance principles has the insurer violated?
a. representation
b. adhesion
c. consideration
d. good health - CORRECT ANSWER C. consideration
the binding force in any contract is consideration. consideration on the part of the insureds the
payment of premiums and the health representations made in the application. Consideration on
the part of the insurer is the promise to pay in the even of loss
which of the following is a primary source of information used for insurance underwriting?
a. application
b. applicant interviews
c. medical records.
d. private investigations - CORRECT ANSWER A. application
the application contains most of the information used for underwriting purposes. this is why its
completeness and accurarcy are so critical
which of the following is the best reason to purchase life insurance rather than annuities?
a. to liquidate a sum of money over a period of year
b. to create regular income payments
c. to liquidate a sum money over a lifetime
d. to create an estate - CORRECT ANSWER D. to create an estate
with insurance, the death creates an immediate estate should the insured die
a producer is helping a married couple determine the financial needs of their children in the event
of one or both should die prematurely. This is a personal use of life insurance known as
a. survivorship insurance
b. juvenile protection provision
c. survivorship protection
d. life planning - CORRECT ANSWER C. survivorship protection
,life insurance can provide the funds necessary for the survivors of the insured to be able to
maintain their lifestyle in the event of the insured's death. This is known as survivor protection
a producer agent must do all of the following when delivering a new policy to the insured
EXCEPT
a. disclose commissions earned from the sale of the policy
b. explain the policy provisions, riders, and exclusions
c. collect any premium due
d. explain the rating procedures if the policy is rated differently than applied for - CORRECT
ANSWER A. disclose commissions earned fro the sale of the policy
a producer must explain policy provisions, exclusions, and riders at the time of the delivery, as
well as the rating procedures especially if the policy is rated differently than applied for. The
producer must also collect any due premium and have the insured sign the statement go
continued good health
if an applicant for a life insurance policy and person to be insured by the policy are two different
people, the underwriter would be concerned about
a. which individual will pay the premium
b. whether an insurable interest exists between the individuals
c. the gender of applicant
d. the type of policy requested - CORRECT ANSWER B. whether an insurable interest exists
between the individuals
an insurable interest must exist at the time of the policy is issued. Some relationships are
automatically presumed to qualify as an insurable interest. ex: spouses, parents, children, and
certain business relationships
When J. applied for a life insurance policy, the agent informed him that a medical exam would
be required. The exam may be completed by
a. a physician of the applicant's choice and at his expense
b. a home office underwriter
c. a paramedic or examining physician at the insurer's expense
d. the agent - CORRECT ANSWER C. a paramedic or examining physician at the insurer's
expense
the applicant may be allowed to select the physician or paramedic facility to perform the
examination. The insurer pays the cost of such an examination
The factor added to the net premium to cover the costs of the insurer in obtaining and
maintaining the business is called
a. expenses
, b. legal reserve
c. dividend accumulation
d. premium tax - CORRECT ANSWER A. expenses
loading is another term for expenses. Net premium (mortality minus interest earned) plus
expenses (or loading) equal the gross premium
which of the following methods of calculating the amount of life insurance needed takes into
account the insured's wages, years until retirement, and inflation?
a. needs approach
b. blackout approach
c. lump-sum approach
d. human life value approach - CORRECT ANSWER D. human life value approach
human life value approach is determined by the loss of the income that would result with the
death of the insured, after making adjustments for expenses, inflation, etc.
which of the following is NOT required for a producer to tell a prospect?
a. how the insurer would use any outside information regarding the applicant
b. an explanation of products that the insurer is selling
c. what requirements the producer needed to meet to obtain the insurance license
d. from what outside sources the insurer would seek information, regarding the insured -
CORRECT ANSWER C. what requirements the producer needed to meet to obtain the insurance
license
agents are required to inform prospects of the products they are selling, as well as their
information collecting practices
which of the following statements concerning buy-sell agreements is true?
a. premium paid are deductible as a business expense
b. benefits received are considered income taxable
c. buy-sell agreements pay in the event of a medical emergency
d. buy-sell agreements are normally funded with a life insurance expectancy - CORRECT
ANSWER D. buy-sell agreements are normally funded with life insurance expectancy
a buy-sell agreements is simply a contract that establishes what willl be done with a business in
the event that an owner dies. Buy-sell agreements are normally funded with a life insurance
policy
Who may complete a paramedical report?
a. an underwriter
b. a nursing assistant
