Primerica Life Insurance Exam
Latest Testbank
Actual Exam Questions With Detailed
Answers Included / A+ Grade Assured
2025/2026
,An insured purchased an insurance policy 5 years ago. Last year,
she received a dividend check f rom the insurance company that
was not taxable. This year, she did not receive a check f rom the
insurer. From what type of insurer did the insured purchase the A. mutual
policy?
f unds not paid out af ter paying claims and other operating costs
a. mutual are returned to the policy owners in the f orm of a dividend. if all
b. reciprocal f unds are paid out, no dividends are paid
c. nonprof it service organization
d. stock
Following a career change, an insured is no longer required to
perf orm many physical activities, so he has implemented a pro -
gram where he walks and jogs f or 45 minutes each morning. The
insured has also eliminated most f atty f oods from his diet. Which
B. reduction
method of dealing with risk does this scenario describe?
the insured's change in lif estyle and habits would likely reduce the
a. retention
chances of health problems
b. reduction
c. transf er
d. avoidance
In insurance, an of f er is usually made when
A. an applicant submits an application to the insurer
a. an applicant submits an application to the insurer
b. the insurer approves the application and receives the initial
in insurance, the of f er is usually made by the applicant in the
premium
f orm of an application. acceptance takes place when an insurer's
c. the agent hands the policy to the policyholder
underwriter approves the application and issues a policy
d. an agent explains a policy to a potential applicant
the causes of loss insured against in an insurance policy are
known as
A. perils
a. perils
b. losses
perils are the causes of loss insured against in an insurance policy
c. risks
d. hazards
what documentation grants express authority to an agent?
A. agents contract with the principal
a. agents contract with the principal
b. agents insurance license
the principal grants authority to an agent through the agent's
c. f iduciary contract
contract
d. state provisions
which of the f ollowing best describes an insurance company that
has been f ormed under the laws of this state?
A. domestic
a. domestic
b. sovereign a company is domestic when doing business within the state in
c. alien which it is incorporated
d. f oreign
which of the f ollowing factors is NOT considered by an underwriter
D. race
when determining the premium rates f or an individual seeking
insurance?
age, medical history, and sex provide sound statistical date f or
determining the probability of loss. Race, religion, sexual orien-
a. medical history
tation, etc. are the f actors that cannot be used because there is
b. sex
not sound statistical data to show that they ef f ect the probability o
c. age
loss; theref ore, they are considered to be discriminatory
d. race
in insurance transactions, f iduciary responsibility means A. handling insurer f unds in a trust capacity
a. handling insurer f unds in a trust capacity an agents f iduciary responsibility includes handling insurer f unds
b. maintaining good credit record in a trust capacity
, c. being liable with respect to payment of claims
d. commingling premiums with agents personal f unds
the authority granted to an agent through the agent's contract is
ref erred to as
B. express authority
a. absolute authority
express powers are written into the contract between the insurer
b. express authority
and the agent
c. apparent authority
d. implied authority
insurance policies are not drawn up though negotiations, and
an insured has little to say about its provisions. what contract
characteristic does this describe? D. adhesion
a. unilateral a contract of adhesion is prepared by only the insurer; the in-
b. conditional sured's only option is to accept or reject the policy as its written
c. personal
d. adhesion
which of the f ollowing insurers are owned by stockholders who
have the usual rights of ownership, including the right of voting?
C. stock
a. reciprocal
only stock insurance companies are owned and controlled by
b. f raternal
stockholders
c. stock
d. mutual
which of the f ollowing best describes the concept that the insured
pays a small amount of premium f or a large amount of risk on the
part of the insurance company? C. aleatory
a. subrogation an insurance contract is an aleatory contract in that it requires a
b. warranty relatively small amount of premium f or a large risk
c. aleatory
d. adhesion
When an insured makes truthf ul statements on the application for
insurance and pays the required premium, it is known as which of
D. consideration
the f ollowing?
consideration is something of value that each party gives to the
a. legal purpose
other. The consideration on the part of the insured is the payment
b. contract of adhesion
of premium and the representations made in the application
c. acceptance
d. consideration
D. the applicant has a prior f elony conviction
which of the f ollowing would qualif y as a competent party in an
insurance contract?
when an insurer and insured enter into a contract, both parties
must be legal of age and mentally competent. It is legal f or a
a. the applicant is intoxicated at the time of application
person convicted of a f elony to buy an insurance contract. An
b. the applicant is 12 year old student
intoxicated person, however, may not be mentally competent, a
c. the applicant is under the inf luence of a mind-impairing med-
12 year old student is considered to be underage in most states
ication at the time of application
and a person under mind-impairing medication most likely would
d. the applicant has a prior f elony conviction
not be mentally competent
an insurer neglects to pay a legitimate claim that is covered under
the terms of the policy. Which of the f ollowing insurance principles C. consideration
has the insurer violated?
the binding force in any contract is consideration. consideration on
a. representation the part of the insureds the payment of premiums and the health
b. adhesion representations made in the application. Consideration on the part
c. consideration of the insurer is the promise to pay in the even of loss
d. good health
which of the f ollowing is a primary source of inf ormation used f or
insurance underwriting?
, A. application
a. application
b. applicant interviews the application contains most of the inf ormation used f or under-
c. medical records. writing purposes. this is why its completeness and accurarcy are
d. private investigations so critical
which of the f ollowing is the best reason to purchase lif e insurance
rather than annuities?
D. to create an estate
a. to liquidate a sum of money over a period of year
with insurance, the death creates an immediate estate should the
b. to create regular income payments
insured die
c. to liquidate a sum money over a lif etime
d. to create an estate
a producer is helping a married couple determine the f inancial
needs of their children in the event of one or both should die
C. survivorship protection
prematurely. This is a personal use of lif e insurance known as
lif e insurance can provide the f unds necessary for the survivors of
a. survivorship insurance
the insured to be able to maintain their lif estyle in the event of the
b. juvenile protection provision
insured's death. This is known as survivor protection
c. survivorship protection
d. lif e planning
a producer agent must do all of the f ollowing when delivering a
A. disclose commissions earned f ro the sale of the policy
new policy to the insured EXCEPT
a producer must explain policy provisions, exclusions, and riders
a. disclose commissions earned f rom the sale of the policy
at the time of the delivery, as well as the rating procedures espe-
b. explain the policy provisions, riders, and exclusions
cially if the policy is rated differently than applied f or. The producer
c. collect any premium due
must also collect any due premium and have the insured sign the
d. explain the rating procedures if the policy is rated dif ferently
statement go continued good health
than applied f or
if an applicant f or a lif e insurance policy and person to be insured
by the policy are two dif f erent people, the underwriter would be B. whether an insurable interest exists between the individuals
concerned about
an insurable interest must exist at the time of the policy is issued.
a. which individual will pay the premium Some relationships are automatically presumed to qualif y as an
b. whether an insurable interest exists between the individuals insurable interest. ex: spouses, parents, children, and certain busi-
c. the gender of applicant ness relationships
d. the type of policy requested
When J. applied f or a lif e insurance policy, the agent inf ormed
him that a medical exam would be required. The exam may be
C. a paramedic or examining physician at the insurer's expense
completed by
the applicant may be allowed to select the physician or paramedic
a. a physician of the applicant's choice and at his expense
f acility to perf orm the examination. The insurer pays the cost of
b. a home of f ice underwriter
such an examination
c. a paramedic or examining physician at the insurer's expense
d. the agent
The f actor added to the net premium to cover the costs of the
insurer in obtaining and maintaining the business is called A. expenses
a. expenses loading is another term f or expenses. Net premium (mortality
b. legal reserve minus interest earned) plus expenses (or loading) equal the gross
c. dividend accumulation premium
d. premium tax
which of the f ollowing methods of calculating the amount of lif e
insurance needed takes into account the insured's wages, years
D. human lif e value approach
until retirement, and inf lation?
human lif e value approach is determined by the loss of the income
a. needs approach
that would result with the death of the insured, af ter making
b. blackout approach
adjustments f or expenses, inf lation, etc.
c. lump-sum approach
d. human lif e value approach
Latest Testbank
Actual Exam Questions With Detailed
Answers Included / A+ Grade Assured
2025/2026
,An insured purchased an insurance policy 5 years ago. Last year,
she received a dividend check f rom the insurance company that
was not taxable. This year, she did not receive a check f rom the
insurer. From what type of insurer did the insured purchase the A. mutual
policy?
f unds not paid out af ter paying claims and other operating costs
a. mutual are returned to the policy owners in the f orm of a dividend. if all
b. reciprocal f unds are paid out, no dividends are paid
c. nonprof it service organization
d. stock
Following a career change, an insured is no longer required to
perf orm many physical activities, so he has implemented a pro -
gram where he walks and jogs f or 45 minutes each morning. The
insured has also eliminated most f atty f oods from his diet. Which
B. reduction
method of dealing with risk does this scenario describe?
the insured's change in lif estyle and habits would likely reduce the
a. retention
chances of health problems
b. reduction
c. transf er
d. avoidance
In insurance, an of f er is usually made when
A. an applicant submits an application to the insurer
a. an applicant submits an application to the insurer
b. the insurer approves the application and receives the initial
in insurance, the of f er is usually made by the applicant in the
premium
f orm of an application. acceptance takes place when an insurer's
c. the agent hands the policy to the policyholder
underwriter approves the application and issues a policy
d. an agent explains a policy to a potential applicant
the causes of loss insured against in an insurance policy are
known as
A. perils
a. perils
b. losses
perils are the causes of loss insured against in an insurance policy
c. risks
d. hazards
what documentation grants express authority to an agent?
A. agents contract with the principal
a. agents contract with the principal
b. agents insurance license
the principal grants authority to an agent through the agent's
c. f iduciary contract
contract
d. state provisions
which of the f ollowing best describes an insurance company that
has been f ormed under the laws of this state?
A. domestic
a. domestic
b. sovereign a company is domestic when doing business within the state in
c. alien which it is incorporated
d. f oreign
which of the f ollowing factors is NOT considered by an underwriter
D. race
when determining the premium rates f or an individual seeking
insurance?
age, medical history, and sex provide sound statistical date f or
determining the probability of loss. Race, religion, sexual orien-
a. medical history
tation, etc. are the f actors that cannot be used because there is
b. sex
not sound statistical data to show that they ef f ect the probability o
c. age
loss; theref ore, they are considered to be discriminatory
d. race
in insurance transactions, f iduciary responsibility means A. handling insurer f unds in a trust capacity
a. handling insurer f unds in a trust capacity an agents f iduciary responsibility includes handling insurer f unds
b. maintaining good credit record in a trust capacity
, c. being liable with respect to payment of claims
d. commingling premiums with agents personal f unds
the authority granted to an agent through the agent's contract is
ref erred to as
B. express authority
a. absolute authority
express powers are written into the contract between the insurer
b. express authority
and the agent
c. apparent authority
d. implied authority
insurance policies are not drawn up though negotiations, and
an insured has little to say about its provisions. what contract
characteristic does this describe? D. adhesion
a. unilateral a contract of adhesion is prepared by only the insurer; the in-
b. conditional sured's only option is to accept or reject the policy as its written
c. personal
d. adhesion
which of the f ollowing insurers are owned by stockholders who
have the usual rights of ownership, including the right of voting?
C. stock
a. reciprocal
only stock insurance companies are owned and controlled by
b. f raternal
stockholders
c. stock
d. mutual
which of the f ollowing best describes the concept that the insured
pays a small amount of premium f or a large amount of risk on the
part of the insurance company? C. aleatory
a. subrogation an insurance contract is an aleatory contract in that it requires a
b. warranty relatively small amount of premium f or a large risk
c. aleatory
d. adhesion
When an insured makes truthf ul statements on the application for
insurance and pays the required premium, it is known as which of
D. consideration
the f ollowing?
consideration is something of value that each party gives to the
a. legal purpose
other. The consideration on the part of the insured is the payment
b. contract of adhesion
of premium and the representations made in the application
c. acceptance
d. consideration
D. the applicant has a prior f elony conviction
which of the f ollowing would qualif y as a competent party in an
insurance contract?
when an insurer and insured enter into a contract, both parties
must be legal of age and mentally competent. It is legal f or a
a. the applicant is intoxicated at the time of application
person convicted of a f elony to buy an insurance contract. An
b. the applicant is 12 year old student
intoxicated person, however, may not be mentally competent, a
c. the applicant is under the inf luence of a mind-impairing med-
12 year old student is considered to be underage in most states
ication at the time of application
and a person under mind-impairing medication most likely would
d. the applicant has a prior f elony conviction
not be mentally competent
an insurer neglects to pay a legitimate claim that is covered under
the terms of the policy. Which of the f ollowing insurance principles C. consideration
has the insurer violated?
the binding force in any contract is consideration. consideration on
a. representation the part of the insureds the payment of premiums and the health
b. adhesion representations made in the application. Consideration on the part
c. consideration of the insurer is the promise to pay in the even of loss
d. good health
which of the f ollowing is a primary source of inf ormation used f or
insurance underwriting?
, A. application
a. application
b. applicant interviews the application contains most of the inf ormation used f or under-
c. medical records. writing purposes. this is why its completeness and accurarcy are
d. private investigations so critical
which of the f ollowing is the best reason to purchase lif e insurance
rather than annuities?
D. to create an estate
a. to liquidate a sum of money over a period of year
with insurance, the death creates an immediate estate should the
b. to create regular income payments
insured die
c. to liquidate a sum money over a lif etime
d. to create an estate
a producer is helping a married couple determine the f inancial
needs of their children in the event of one or both should die
C. survivorship protection
prematurely. This is a personal use of lif e insurance known as
lif e insurance can provide the f unds necessary for the survivors of
a. survivorship insurance
the insured to be able to maintain their lif estyle in the event of the
b. juvenile protection provision
insured's death. This is known as survivor protection
c. survivorship protection
d. lif e planning
a producer agent must do all of the f ollowing when delivering a
A. disclose commissions earned f ro the sale of the policy
new policy to the insured EXCEPT
a producer must explain policy provisions, exclusions, and riders
a. disclose commissions earned f rom the sale of the policy
at the time of the delivery, as well as the rating procedures espe-
b. explain the policy provisions, riders, and exclusions
cially if the policy is rated differently than applied f or. The producer
c. collect any premium due
must also collect any due premium and have the insured sign the
d. explain the rating procedures if the policy is rated dif ferently
statement go continued good health
than applied f or
if an applicant f or a lif e insurance policy and person to be insured
by the policy are two dif f erent people, the underwriter would be B. whether an insurable interest exists between the individuals
concerned about
an insurable interest must exist at the time of the policy is issued.
a. which individual will pay the premium Some relationships are automatically presumed to qualif y as an
b. whether an insurable interest exists between the individuals insurable interest. ex: spouses, parents, children, and certain busi-
c. the gender of applicant ness relationships
d. the type of policy requested
When J. applied f or a lif e insurance policy, the agent inf ormed
him that a medical exam would be required. The exam may be
C. a paramedic or examining physician at the insurer's expense
completed by
the applicant may be allowed to select the physician or paramedic
a. a physician of the applicant's choice and at his expense
f acility to perf orm the examination. The insurer pays the cost of
b. a home of f ice underwriter
such an examination
c. a paramedic or examining physician at the insurer's expense
d. the agent
The f actor added to the net premium to cover the costs of the
insurer in obtaining and maintaining the business is called A. expenses
a. expenses loading is another term f or expenses. Net premium (mortality
b. legal reserve minus interest earned) plus expenses (or loading) equal the gross
c. dividend accumulation premium
d. premium tax
which of the f ollowing methods of calculating the amount of lif e
insurance needed takes into account the insured's wages, years
D. human lif e value approach
until retirement, and inf lation?
human lif e value approach is determined by the loss of the income
a. needs approach
that would result with the death of the insured, af ter making
b. blackout approach
adjustments f or expenses, inf lation, etc.
c. lump-sum approach
d. human lif e value approach
