Primerica-General Insurance Exam
What law protects consumers from the circulation of inaccurate or
obsolete information? - ✔ ✔ The Fair Credit Reporting Act
What is the name of the process that insurance companies use to
determine whether or not an applicant is insurable? - ✔ ✔
Underwriting
When risks with higher probability of loss are seeking insurance more
often than other risks, this is known as what? - ✔ ✔ Adverse
selection
A state-issued document empowering an insurance company to
become an admitted insurer is called what? - ✔ ✔ Certificate of
authority
the type of insurance company organized to return any surplus money
to its policyholders is known as what? - ✔ ✔ Mutual Company
which type of insurance is based on mutual agreements among
subscribers? - ✔ ✔ reciprocal insurance
which of the folloing 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. warrenty
b. aleatory
c. adhesion
,d. subrogation - ✔ ✔ b. aleatory
under which type of receipts will the coverage begin immediately even
if the applicant is later found uninsurable? - ✔ ✔ Unconditional-
with the binding receipt (or temporary insurance agreement), coverage
begins immediately and continues for a specific length of time or until
the policy is issued or declined.
When a replacement is involved, a replacing insurance company is
responsible for all of the following EXCEPT:
a. obtain from the producer a list of the applicant's life insurance or
annuity contracts to be replaced
b. provide a copy of the Important Notice Regarding Replacement of
Life Insurance to the applicant.
c. send the existing insurance company a written notice of replacement
d. include a policy summary on the proposed life insurance in the
communication with the existing company - ✔ ✔ b. provide a copy
of the Important Notice Regarding Replacement of Life Insurance
Which of the following statements would best describe the difference
between viatical settlements and accelerated death benefits?
a. viaticals are determined by morbidity, but Accelerated Death
benefits use mortality tables
b. viaticals use mortality tables, but Accelerated Death benefits are
determined by morbidity
c. viaticals are funded by a third party, and Accelerated Death benefits
are provided by the insurer that issued the original policy
, d. viaticals are provided by the insurer that the issued the original
policy, and Accelerated Death benefits are funded by a third party. - ✔
✔ c. viaticals are funded by a third party, and Accelerated Death
benefits are provided by the insurer that issued the original policy-
viatical settlements allow someone living with a life threatening
condition to sell their existing life insurance policy and use the proceeds
when they are most needed, before their death. Viatical settlements
are separate contracts in which the insured sells the death benefit to a
third party at a discounted rate.
Which of the following would describe a legal document which would
dictate who can buy a deceased partner's share of a business and for
what amount?
a. key person agreements
b. split dollar agreement
c. buy-sell agreement
d. profit and loss agreement - ✔ ✔ c. buy-sell agreement
What kind of policy issues certificates of insurance to insureds? - ✔ ✔
Group insurance-individuals covered by group life insurance do not
receive a policy, but receive a certificate of insurance from the master
policy
the authority granted to an agent through the agent's contract is
referred to as: - ✔ ✔ Express authority: express powers are written
into the contract between the insurer and the agent
What law protects consumers from the circulation of inaccurate or
obsolete information? - ✔ ✔ The Fair Credit Reporting Act
What is the name of the process that insurance companies use to
determine whether or not an applicant is insurable? - ✔ ✔
Underwriting
When risks with higher probability of loss are seeking insurance more
often than other risks, this is known as what? - ✔ ✔ Adverse
selection
A state-issued document empowering an insurance company to
become an admitted insurer is called what? - ✔ ✔ Certificate of
authority
the type of insurance company organized to return any surplus money
to its policyholders is known as what? - ✔ ✔ Mutual Company
which type of insurance is based on mutual agreements among
subscribers? - ✔ ✔ reciprocal insurance
which of the folloing 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. warrenty
b. aleatory
c. adhesion
,d. subrogation - ✔ ✔ b. aleatory
under which type of receipts will the coverage begin immediately even
if the applicant is later found uninsurable? - ✔ ✔ Unconditional-
with the binding receipt (or temporary insurance agreement), coverage
begins immediately and continues for a specific length of time or until
the policy is issued or declined.
When a replacement is involved, a replacing insurance company is
responsible for all of the following EXCEPT:
a. obtain from the producer a list of the applicant's life insurance or
annuity contracts to be replaced
b. provide a copy of the Important Notice Regarding Replacement of
Life Insurance to the applicant.
c. send the existing insurance company a written notice of replacement
d. include a policy summary on the proposed life insurance in the
communication with the existing company - ✔ ✔ b. provide a copy
of the Important Notice Regarding Replacement of Life Insurance
Which of the following statements would best describe the difference
between viatical settlements and accelerated death benefits?
a. viaticals are determined by morbidity, but Accelerated Death
benefits use mortality tables
b. viaticals use mortality tables, but Accelerated Death benefits are
determined by morbidity
c. viaticals are funded by a third party, and Accelerated Death benefits
are provided by the insurer that issued the original policy
, d. viaticals are provided by the insurer that the issued the original
policy, and Accelerated Death benefits are funded by a third party. - ✔
✔ c. viaticals are funded by a third party, and Accelerated Death
benefits are provided by the insurer that issued the original policy-
viatical settlements allow someone living with a life threatening
condition to sell their existing life insurance policy and use the proceeds
when they are most needed, before their death. Viatical settlements
are separate contracts in which the insured sells the death benefit to a
third party at a discounted rate.
Which of the following would describe a legal document which would
dictate who can buy a deceased partner's share of a business and for
what amount?
a. key person agreements
b. split dollar agreement
c. buy-sell agreement
d. profit and loss agreement - ✔ ✔ c. buy-sell agreement
What kind of policy issues certificates of insurance to insureds? - ✔ ✔
Group insurance-individuals covered by group life insurance do not
receive a policy, but receive a certificate of insurance from the master
policy
the authority granted to an agent through the agent's contract is
referred to as: - ✔ ✔ Express authority: express powers are written
into the contract between the insurer and the agent
